In today’s age of accelerated technology and industry, there is a looming issue in the workforce. New innovations are creating jobs with skillsets never previously required, and there exists a workforce of employees with skills that are slowly becoming outdated. There is a gap between these two developments, and workers are going to need to adapt to the new circumstances to remain up-to-date in these fast-paced fields of growth.
In this interview with EdTech Times from the 2018 LearnLaunch conference, Frank Britt talks about the need for training to fill this skill gap.
Hannah Nyren: Welcome to the EdTech Times podcast.
Hannah Nyren: Hi this is Hannah Nyren with EdTech Times and today I’m speaking with Frank Britt CEO of Penn Foster. Hi Frank.
Frank Britt: Thank you. Thanks for having me.
Hannah Nyren: So Frank can you tell me in a couple of sentences what Penn Foster does?
Frank Britt: Penn Foster’s an education institution and an upskilling platform. So we focus on helping middle skilled adults in high growth occupations up their skills. With the ultimate goal of higher income mobility and better employability.
Hannah Nyren: So how long has Penn Foster been around?
Frank Britt: That’s a good question. The original Penn Foster was known as the International Correspondence School and has a very iconic, storied history. It was the first correspondence school in the history of United States. So the year after Sears sent out the first catalog by mail, the following year this fellow Thomas Foster sent out the first catalog for going to school by mail because there wasn’t adequate training for middle-skilled adults, even back in the 1890s.
Frank Britt: So through its storied history, Penn Foster educated more adults than any other institution in history of the United States. 10 percent of all GIs in World War II. It was one of the first schools in United States for women. It has a very, very storied history. Fast forward to the present. In 2007, we changed the name to Penn Foster. Didn’t feel like correspondence school might be the right way to brand in the 21st century. And so since that time we’ve obviously digitized and contemporized. So now we view ourselves as an up-skilling platform for the middle skill, but we have a very rich heritage of serving that middle-skilled cohort.
Hannah Nyren: Wow that is. You might have invented the industry.
Frank Britt: I think there’s actually some truth to that. I mean, I think, if you trace back that the lineage. The idea of self-paced learning and being able to go to school on remote basis, obviously prior to the technology we all became accustomed to. I think actually Thomas Foster was legitimately making that claim.
Hannah Nyren: Wow, that’s amazing. So tell me about what you’re doing today. I know you have this long history, but what are the most important things that you’re working on today in today’s economy and today’s educational system?
Frank Britt: Yes. So we always say we’re not defined by history we’re defined by what we’re going to do in the future. What we’re ultimately trying to make it a dent in is this middle-skill crisis that employers talk about, that you read about in the paper all the time. We think if you look at the skills gap in United States — there’s always been a skills gap in any modern economy, because the rate of innovation means that there are new capabilities, new skills, and someone needs to be trained up to do that. And correspondingly, there are people who no longer have the right skills, and therefore they need to be up-skilled to remain relevant in the workforce. So we sit at the nexus between education and employment — around that middle skill cohort.
Frank Britt: There’s about 160 million people who are adults that work in the United States, 80 million or so would be considered middle-skilled — either defined by their wage and or by their education attainment up to the community college. So what we’re trying to do is, we’re trying to bring solutions to consumers directly, who are in that middle skill, who need to be up skilled. Sort of part of the populist revolution that happened in the recent election is all around people having anxiety about their futures. We’re trying to help them.
Frank Britt: What more recently we have added to our portfolio is partnering with employers. And so employers now represent about 25 percent of the total enterprise sales. And we are deeply embedding ourselves in some of the leading employers in the country, in occupations and in industries that are relevant to the type of people we serve — which would be hospitality, retail, skilled trades that narrate high-growth middle-skilled occupations and employers that have that need for that workforce. That’s kind of our sweet spot.
Hannah Nyren: Okay that’s good. And those are the people who need the skills the most really so there’s a demand there.
Frank Britt: Yes there is, we think a very large under-served market that historically education institutions have kind of migrated away, because they feel like those are at risk populations, those nontraditional students, they may not be the right ones to serve. They have the hardest challenges in terms of outcomes.
Hannah Nyren: So it’s too complicated and they don’t want to deal—
Frank Britt: It’s too complicated. And we have the opposite view, that says, that is an under-served part of the economy that is in desperate need of options and access and affordability. So we have some principles that guide our choices. One is, we don’t think anyone should have to go into debt to be educated. And so we don’t accept any government money, we don’t accept any student loans, so-called Title IV money. And we’ve created a solution that allows an ordinary middle-skilled worker to be able to afford to go to school and to pay as they go. And it turns out that actually creates a lot of value both financially and intrinsically to the employers. Because when the employer finds an organization that has the ability to both serve consumers directly — as well as serve the needs of them as a client — and then bring those together, that’s a fairly unusual organizational or business model. And we’ve been able to do both. And we think that’s part of the future of how we view the skills economy functioning. There’ll be institutions that are world-class at serving consumers, world-class at serving clients, and then have the ability to fuse the two.
Hannah Nyren: Well, that’s really interesting. So we are here today at the LearnLaunch 2018 Conference. And you spoke on a panel about education in the enterprise. So, can you talk to me a little bit about what is happening within enterprise education-wise?
Frank Britt: I think there’s three things going on. First of all, historically, if you look at corporate training dollars, most of the corporate training dollars have gone to white collar professionals, sort of VP and above. So the corporate training industries 120 to 130 billion. Eighty five percent of that money has gone to that cohort. What we’re starting to see, we’re kind of at the inflection point of companies embracing the idea that you can democratize training down to the frontline worker. That historically has not been the place where they spent their money and their time.
Frank Britt: So the first big trend is how do we up skill the frontline workers, how do we up-skill the operations workers and not just corporate spending on kind of the white collar professionals. That’s one change. The second question is, “Can they make it economically rational to do so?” Because these are not social purpose organizations. They’re ROI-driven, they have shareholders. We have proven time and time again that it makes economic sense to invest in that cohort of worker. They will stay longer. You’ll be able to attract more of them at a lower cost and ultimately we have higher productivity. And I think more companies are awakening to that.
Frank Britt: And then the implication on the edtech community specifically is that the infrastructures inside corporations were never really engineered to serve the rank and file at scale. And so, what you find is a kind of a mishmash of technologies — learning management systems and the like. And companies are really struggling with, how do I bring those together in a way that is appropriate for this type of worker that I now need to train, not instead of the white collar professional, but in addition to. And so the talk we had today was about interoperability, the challenges companies have in disassembling and reassembling their systems. How do you embed the business processes in there? What about the data integration? So there’s a lot of complexity in helping to navigate on behalf of clients — how they should proceed in light of — they believe they can get an ROI, and they believe the time has finally come to really serve that middle-skilled worker.
Hannah Nyren: So what businesses do you think are really preparing their employees and helping to train their employees? I know I’ve worked for three different companies in my life, and I don’t think either one had more than a couple of weeks of training. So, I don’t think that it’s as common as it needs to be.
Frank Britt: Sure.
Hannah Nyren: So, who do you think is a good example of the way that things should be in the workplace today?
Frank Britt: Well, pick an industry that you probably don’t spend that much time reflecting on. But if you look at the industry around animal health and animal hospitals — there are some very large multi-billion dollar animal health, animal hospital companies that you as a consumer may bring your pet. A typical animal hospital has a veterinarian of course, or more than one, and they have vet technicians, and they have vet assistants. It turns out that the rate limiting factor to adding more animal hospitals for most of the animal hospital chains in the United States is not finding enough veterinarians. It’s there are not enough technicians and vet assistants in the United States. Which is a certifiable credential.
Frank Britt: And so if they want to grow their business, they are going to have to embrace, which they have, building a talent pipeline that allows them to support the growth of locations they have. And the constraint they have is there just aren’t enough in the United States. So in our case we’ve made that one of our “verticals” as we call it. And I think today we support about 40 percent of all vet techs in the United States who were going to school now go to our school. And so we do that in cooperation with the employers. So I think the veterinary industry is an example of an industry that is somewhat niche-ey but turns out to be very large market at the end of the day. It’s been very progressive.
Frank Britt: I think when you move from there in retailing there are clearly companies that are awakening and really leaning in. I think Wal-Mart is working hard. There is, of course, the famous Starbucks-ASU partnership that’s been in place for a number of years. That partnership is a very powerful one and I think has strong signaling value. But that was for people who are going to go to college. And what we believe is that college is a viable path for many, but not for all. And there needs to be other opportunities in the career pathways. So while we offer college offerings ourselves, we think that cohort around certifications, and even high school actually, turns out high school is another major challenge that employers have, because as you know, there’s about 30 million adults who don’t have a high school degree.
Frank Britt: There aren’t really any leading companies you can think of that could serve the adult high school learner market. And it turns out that that’s the biggest wage premium you could ever have, going from no high school degree to a high school degree. I don’t mean a GED degree. A high school degree is a 26 percent increase in your wage premium, and it improves your health outcomes. So that the larger narrative is: employers are finally leaning in to high school completion certifications, associate degrees for that middle skill and hospitality, retail, veterinary, and I think skill trades will be the last one, are all industries that are recognizing that they have to do something economically, because that it’s literally constraining their ability to grow.
Hannah Nyren: I think that’s a really interesting thing to focus on, because I think a lot of people who drop out of high school don’t think that they can go back. They think GED is the only option. And you know it’s not like they’re going to re-enroll in their local high school. So it’s good to know that there is an alternative, because there are so many people who don’t have high school degrees and that really does make such a difference.
Frank Britt: Well, I think the good news is that the high school completion rate in the United States for graduation is about 83 percent. It’s the highest it’s ever been. That’s the good news. The bad news is that still leaves 7- or 800,000 people annually who don’t have a high school degree. If you’ve aged out of a traditional system, there’s a very big void in the market in that no one really has accountability for you. The traditional K-12 system is a public good. We all have a responsibility to helping kids in K-12. But no one really owns, in the context of our society, the responsibility for the 22-year-old adults who didn’t finish high school. There are social purpose organizations sort of smattered around the country. So people historically have defaulted to the GED.
Frank Britt: The problem of the GED is, it’s a high stakes exam. Which is not the learning orientation that a person who historically may have been challenged in school is best positioned to take. They are much better positioned to do a self-paced, as-you-go model that they achieved mastery and proficiency at a rate that’s appropriate for them, that acknowledges their needs and learning preferences, whether it be academically or motivational. And so there are a sub-cohort of people for who the GED is a totally fine solution. But as a general statement, you’re not going to solve and help the 30 million adults who don’t have a high school degree through the GED program. Because it’s really not engineered for that type of student population. The good news is that employers are starting to awaken. They have not just a moral responsibility, they actually have an economically sound argument for helping to underwrite investment in high school completion programs for adults, because that gives them a talent pipeline.
Frank Britt: So for example, Church’s Fried Chicken in Atlanta has 1,700 locations. If you want to be a manager at a Church’s Fried Chicken, you have to have a high school degree. Well they have people in the country today who are good-standing people, have demonstrated high proficiency, but they’re not allowed to be a manager. So, Church’s Fried Chicken began underwriting high school completion programs, because that credential has signaling value in the workplace and then allows people to move on. So this is all around building talent management pipelines, and really tapping into historically an under-appreciated part of the labor market. And when you’re in a full labor context, full market context as we are today, companies are being compelled to look at alternatives and leaning in on middle-skilled oriented training and up-skilling, is very much part of their talent management plans.
Hannah Nyren: How do you see this space growing in the future? How do you see the workforce development and professional learning-space growing?
Frank Britt: Well I think you’ve just picked up on a key word, ”professional.” So, I think historically, the workforce development system has contrasted with K12 and it contrasted with higher ed. It hasn’t always been led by folks that came out of professional backgrounds. They were typically social purpose oriented professionals, who are very capable, have good acumen, but they had a different set of experiences. I think what you’re starting to see is both edtech companies and just talent in general being attracted to the workforce development system, and you’re starting to see a rapid increase in innovation. Lots of new models emerging, both commercial models, pedagogy, technologies, there’s a — there’s kind of an awakening to this gigantic market that’s underserved, that has need of different kinds of solutions.
Frank Britt: So I think if you were to press pause, come back in three years, and look at the workforce development system, particularly in the context of edtech, you will see more and more migration to that part of the market. Because K-12 has known challenges and risks, long sales cycles, you know, difficult buying models in terms of school districts and the like. Higher Ed has its own unique set of challenges. But it’s this workforce development system that’s a bit of the Wild Wild West. And there will be leaders emerging in that market who will perhaps emanate from the original K12-higher ed or perhaps will be new to that sector and will kind of be disruptors in their own way. And I think you’ll see a lot more activity there than anywhere else.
Frank Britt: I was on a panel last week in New York at a private equity conference and the title of the panel was “The Future of Blue Collar Education.” In my experience, there’s never been at private equity conference a panel on blue collar education, because it’s never been an investable asset class. Now it’s becoming an investable asset class. In order for it to be investable, there has to be scaled providers and there has to be some notion of what is the market and how it’s defined and how it behaves. That’s all part of this ecosystem that’s evolving and rapidly emerging within the workforce development system. And so we see a lot of — a lot of attention from both investors, technology companies, and the like really going after “how do I take advantage of the workforce development changes to drive commercial outcomes, better worker opportunities, and really social outcomes as a by-product.”
Hannah Nyren: Where do you see these jobs? Like, what do you think the jobs that will need to be filled in the future will be?
Frank Britt: Well, there’s a lot of debate, and there’s always going to be, and there always have been, the sort of people who have very doomsday views on, you know, all these jobs going to go away. But I think the more pragmatic view is, if you look at the jobs that are quote “at risk” from automation, most of the time we always say that the only job that’s really gone away in the last 20 years is that is the elevator operator. All the same jobs still existed. And there’s a whole new set of jobs, right? So what we do is we look at the flow of the work. And we say, “What parts of the workflow of jobs will likely have some sort of automation?” You know, IBM would call cognitive augmentation. So we see, is there still going to be customer service reps? When you walk in the McDonald’s, you’re still going to talk to a human being. There may be different tools and technologies to help them deliver the service to you, but it’s going to be a combination of human factor and technology factor.
Frank Britt: And so what we’re trying to do is prepare workers for a future where technology and digitalization is embedded in the workflow, and therefore it changes what they have to do and how they have to do it. So what that means for us is, we have credentialed programs that demonstrate you have expertise in this industry or this job. But we also are doing soft skills training. We’re doing digital literacy training, we’re doing financial literacy training. So we’re trying to build a whole worker, not just the person who has the domain expertise in that discipline. And we think that’s how education is going to start. We talk about the idea of a skills library. So moving away from traditional credential-based models to tagging skills and training for specific skills, that’s what employers care about.
Hannah Nyren: So someone who has the skills to adapt to any new job that comes up?
Frank Britt: Yeah, any new job. Yes. So if you think of the hierarchy of skills, there’s a set of foundational skills on numeracy and literacy. There’s a set of foundational skills on digital literacy and social sort of soft skills. And then that’s your foundation. And those are transferable, almost irrespective of the employment setting. And then as you move up the pyramid, you start to get more job specific and industry-specific skills. We’re trying to support people across the full continuum of that learning, from the foundation, to the intermediate, all the way up to supervisory jobs in hospitality, retail, skilled trades, and the like.
Hannah Nyren: Thank you so much for speaking with me today. I feel like I’ve learned a lot in these 17 minutes.
Frank Britt: Thank you very much we appreciate the opportunity.