Market Analysis – 86101802 – Re training or refreshing training services

Market Analysis Brief: Re-training & Refreshing Training Services (UNSPSC 86101802)

Executive Summary

The global corporate re-training market is a large and rapidly expanding segment, driven by persistent skills gaps and the pace of digital transformation. Valued at est. $357.5 billion in 2023, the market is projected to grow at a 7.9% CAGR over the next five years [Source - Grand View Research, Feb 2024]. The primary opportunity lies in leveraging AI-powered learning platforms to deliver personalized, scalable training that directly addresses critical skill shortages in areas like data science and cybersecurity. The most significant threat is the difficulty in measuring the ROI of training investments, which can lead to budget scrutiny and inefficient spend.

Market Size & Growth

The Total Addressable Market (TAM) for corporate training and development is substantial and demonstrates consistent growth. The demand is fueled by the need for continuous workforce upskilling in response to technological disruption. The three largest geographic markets are 1. North America, 2. Europe, and 3. Asia-Pacific, with APAC showing the fastest growth trajectory due to its expanding corporate sector and government-led skill development initiatives.

Key Drivers & Constraints

1. Driver: Pervasive Skills Gaps. The rapid evolution of technology, particularly in AI, cloud computing, and data analytics, creates a constant need to reskill the existing workforce. Over 44% of core worker skills are expected to be disrupted in the next five years [Source - World Economic Forum, May 2023].
2. Driver: Talent Retention & Attraction. Companies increasingly use robust training and development programs as a key differentiator in a competitive labor market to improve employee engagement and reduce attrition.
3. Driver: Digital Transformation Initiatives. Enterprise-wide shifts to new digital platforms and business models necessitate large-scale, structured re-training programs to ensure successful adoption and value realization.
4. Constraint: ROI Measurement Complexity. Quantifying the direct financial return of training programs remains a significant challenge, making it difficult to justify budget allocation against other business priorities.
5. Constraint: Market Fragmentation. The market is highly fragmented with thousands of providers, from large platform players to niche specialists, complicating supplier discovery, quality assurance, and spend consolidation.
6. Constraint: Content Obsolescence. The shelf-life of technical training content is shortening, requiring continuous investment from providers to keep curricula relevant, which in turn impacts pricing.

Competitive Landscape

Barriers to entry are moderate, primarily revolving around brand reputation, scale of content IP, and platform technology. Capital intensity is low for digital-first providers but higher for those offering blended or in-person training.

⮕ Tier 1 Leaders * LinkedIn Learning (Microsoft): Differentiator: Massive content library integrated with the world's largest professional network, providing unique data insights. * Coursera for Business: Differentiator: Premium, certified content from top-tier universities and industry leaders (e.g., Google, IBM). * Skillsoft: Differentiator: Comprehensive enterprise suite combining a learning management system (LMS), broad content library, and compliance training. * Cornerstone OnDemand: Differentiator: Integrated talent management platform that combines learning with performance, recruiting, and skills management.

⮕ Emerging/Niche Players * Udemy Business: Differentiator: Agile marketplace model with a vast, rapidly updated library of real-world, practitioner-taught courses. * Pluralsight: Differentiator: Deep specialization in technology skills training for developers, IT ops, and cybersecurity professionals. * Degreed: Differentiator: A leading Learning Experience Platform (LXP) that aggregates and curates learning content from all sources into a single, personalized interface. * Go1: Differentiator: Content aggregator that provides a single subscription to access courses from dozens of different training providers.

Pricing Mechanics

Pricing is typically structured around three models: 1) Per-User/Per-Month (PU/PM) for SaaS-based platform access, 2) Per-Course Enrollment for specific virtual or instructor-led training, and 3) Enterprise License for unlimited access across the organization. Custom content development and large-scale consulting engagements are priced on a project basis (time and materials or fixed fee).

The price build-up is dominated by content creation/curation and platform technology costs. The most volatile cost elements are tied to specialized human capital and technology. * Subject Matter Expert (SME) Labor: Cost for top-tier instructors and content developers, especially in high-demand fields like Generative AI. Recent Change: +10-15%. * Custom Content Development: Costs for creating bespoke training modules tailored to company-specific processes or technologies. Recent Change: +8-12%. * Platform R&D/Hosting: Investment in AI-driven personalization, analytics, and video streaming infrastructure. Recent Change: +3-5%.

Recent Trends & Innovation

• AI-Powered Personalization (2023-2024): Leading platforms are heavily integrating Generative AI to create dynamic learning paths, generate assessments, and provide chatbot-based coaching, moving beyond static content libraries.
• Skills-Based Talent Management (2023-2024): A strategic shift towards using learning platforms to formally map, assess, and verify employee skills. This data is then used to inform internal mobility, promotions, and project staffing.
• Consolidation of Learning Platforms (2022-2023): Significant M&A activity, such as Cornerstone's acquisition of EdCast, signals a market trend towards integrated platforms that combine the features of a traditional LMS with the user-centric approach of an LXP.
• Immersive Learning (VR/AR): Growing adoption of virtual and augmented reality for hands-on, simulation-based training in sectors like manufacturing, healthcare, and logistics, providing safe and scalable practice environments.

Supplier Landscape

Regional Focus: North Carolina (USA)

Demand outlook in North Carolina is High. The state's booming technology (Research Triangle Park), finance (Charlotte), and advanced manufacturing sectors create intense and continuous demand for reskilling. Major investments from companies like Apple, Toyota, and VinFast will further accelerate the need for a highly skilled technical workforce. Local capacity is strong, with world-class universities (UNC, Duke, NCSU) offering executive education and a robust community college system providing targeted vocational training. State-level programs like NCWorks offer grants and incentives for workforce development, creating a favorable environment for corporate training investment.

Risk Outlook

Actionable Sourcing Recommendations

1. Consolidate Spend & Pursue Enterprise Agreements. Move away from decentralized, ad-hoc purchasing. Bundle volume and consolidate spend across 2-3 preferred global providers (e.g., one for tech skills, one for leadership). Target a 10-15% cost reduction on enterprise-level agreements versus current unit pricing. This will also improve visibility and governance over training quality.

2. Pilot a Skills-Based LXP to Measure ROI. Launch a 6-month pilot with a Learning Experience Platform (LXP) like Degreed for a key business unit. Use it to aggregate existing content, map current skills, and track skill acquisition against specific project goals or performance metrics. This creates a data-driven framework to prove the value of the training investment to leadership.