Demand For Online Education is Growing. Are Providers Ready?

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Online learning is continuing to gain popularity and participation: Universities have started new online programs in response to the high enrollment in 2020.

People are using online learning resources more frequently to learn new things and develop new abilities, from Ph.D. students to lifelong learners. Despite the apparent rise in demand, many providers continue to struggle with developing programs that potential students will find appealing. Demand For Online Education is Growing. Are Providers Ready?

Local and national colleges, as well as burgeoning online education titans and more recent nondegree providers, are just a few of the many competitors vying for a piece of the online education market.

Given the size of these market changes and the escalating rivalry they portend, it is possible that suppliers of online education will need to make more than small adjustments in order to survive, advance, and prosper.

Demand For Online Education is Growing Are Providers Ready

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Major Market Forces

The online education sector is being transformed by four main market drivers, including greater rivalry, consolidation among a few major firms, an infusion of investments, and rising demands for quality.

core market forces

Sources: https://www.mckinsey.com/

The industry has become more competitive as a result of the rising demand for online education, with suppliers fighting for the attention of a wide range of potential students.

Massive open online courses (MOOCs) reached 220 million students by the end of 2021, up from 300,000 in 2011. The number of hybrid and distance-only students at traditional colleges rose by 36% between 2012 and 2019, and the COVID-19 pandemic’s circumstances in 2020 sharply accelerated that rise by an additional 92%.

The market for online education has consolidated around a small number of prominent providers of online degrees against the backdrop of rising student interest.

While the overall market for degree programs decreased by about 3% from 2019 to 2020, according to a recent analysis of IPEDS total enrollment data, four of the largest open-access online education providers—Southern New Hampshire University (SNHU), Liberty University, Western Governors University (WGU), and Grand Canyon University (GCU)—saw an average increase of 11% in total enrollment.

However, there are more recent, digital-native entrants vying for the same student demographics with online degree-granting universities. A growth in venture capital funding is encouraging a large number of start-ups in the field of digital education to disrupt the market.

Between 2017 and 2021, US venture funding for edtech increased from $1 billion to $8 billion. The successful initial public offerings (IPOs) of several edtech businesses, notably Coursera (value of more than $4 billion), in 2021 provided evidence of the public appetite for these investments.

As online services increase and institutions continue to move toward blended learning supported by cutting-edge digital tools, edtech investment may be positioned for further development.

The forces driving demand have been complemented by increased expectations for the caliber of online education. For instance, new options are erasing the distinction between degree-based and nondegree learning, resulting in a brand-new group of educational rivals.

In collaboration with Coursera, Google’s Grow with Google initiative offers classes in in-demand disciplines like user experience design and data analytics and has seen a considerable increase in enrolment.

These programs offer potential students quick, affordable alternatives outside of degree programs. Traditional online education providers that prioritise degrees might want to think about incorporating such services into their growth and competition plans.

More demand and higher expectations for quality also imply that students are becoming more astute about the returns on their educational investments.

The chance to acquire in-demand skills may be more significant to certain prospective students than a program’s or institution’s reputation, particularly those who plan to enter lucrative industries like IT.

In our learner segmentation study, nearly 50% of respondents stated they would only consider paying for education programs that have an anticipated good return on job outcomes, while 21% said they would only consider enrolling in a college to acquire a degree if the college was “top-ranked.”

Three Strategic Moves That Could Unlock Opportunities

Potential development opportunities exist within these market forces for online education providers, but in order to seize these chances, providers may need to take risky actions by adjusting and pivoting their tactics.

Adults of various ages can swiftly acquire the skills necessary to fill these positions and advance their career paths through online education.

Employers in industries ranging from healthcare to cybersecurity are having difficulty finding suitable staff. Workers are reassessing their job options and wanting to enter higher-paying sectors at the same time.

Online education providers could think about three tactical actions to address these objectives, attract the attention of potential students, and set themselves apart from rivals: Transform career planning by integrating skill development and degree completion to meet student and labor market needs.

online education instituition

Sources: https://www.mckinsey.com/

1. Meet student and labor market needs

In the past, educational institutions have prioritized learning and knowledge development over career preparation. However, students, especially those who plan to enroll in online courses, are more concerned with the return on investment (ROI) of their degree, more precisely, the kind of professions for which it will equip them.

The demands on the job market are also evolving quickly. Institutions, which serve as a major source of talent, should adapt to these changes by reevaluating degree requirements and program design to better prepare students for a changing workplace. Institutions should think about these three options:

Programs should be adjusted to meet market demands. Programs are routinely designed at many institutions, including unconventional online universities, using an antiquated and protracted approach that is frequently disconnected from the needs of companies and industries.

This procedure not only causes graduates’ abilities to be out of sync with market demands, but it also infrequently enables the quick creation of new programs to fill market gaps.

By implementing an iterative “learn and design” program creation process that includes understanding current trends across industries, spotting changes in technical and nontechnical skills, and redesigning existing programs or creating new ones to best prepare students, institutions can stay ahead of the curve.

For instance, between 2016 and 2019, a university in Mexico discovered that new programs were responsible for 34% of all new enrollment.

This institution concentrated on developing new programs by identifying shifts in labor market trends and in-demand professions, assessing whether rival institutions were providing appropriate programs to address these workforce shifts, and quickly deciding which new programs to offer based on these considerations.

In order to assure efficiency and quick launch, the development of new programs was then consolidated through an agile content development team (rather than distributed across many “schools”), allowing for the production of new programs to take less than three months.

Combine degree and nondegree programs. Programs leading to certification but not a degree have typically been viewed as completely different things in the education sector.

Each has its advantages and disadvantages. Adult learners have recently begun to accept a wider range of educational opportunities, with certificate providers being viewed as being on par with more established institutions of higher learning.

This implies that universities could best serve the student population by reducing obstacles between degree and nondegree programs and by providing an integrated package that combines credit-bearing certifications and certificates into the overall process of obtaining a degree.

To create such integrated programs, universities don’t always need to reinvent the wheel. Traditional colleges might collaborate with reputable nondegree players like Udacity or Grow with Google to create an end-to-end solution for students.

In contrast, nondegree providers might look to collaborate with degree-granting institutions so that their students can receive credit for their efforts and progress toward a degree if they so choose.

For instance, the City University of New York (CUNY) collaborated with the New York Jobs CEO Council to introduce the EverUp Micro-Credential Program, which provides regular degree programs coupled with 100-hour online intensives.

These credentials, which were developed with cooperation from New York City’s major employers, are meant to better prepare students for jobs or internships by teaching them specialized job-related skills.

2. Transform career planning and coaching services

In McKinsey’s learner survey, 35% of respondents stated that a stagnant career or stagnant job search was their primary reason for considering further education.

Online schools might proactively and consistently interact with students to define clear goals, work toward those goals, and alter programming as necessary in order to give learners stronger and better-aligned career outcomes and enhance the possibility of job placement in high-paying employment.

Transform career planning and coaching services

In the past, students have begun their professional lives by selecting a major in the first or second year of a degree program and looking for a job in a relevant field prior to graduation.

This paradigm offers nothing to actually support learners throughout their travels and makes the assumption that learners are well-informed on which programs or courses to pursue.

In particular in digital environments where networking, information sessions, and other forms of exposure to careers may lack in quality and quantity, merely providing an educational experience with little connection to a learner’s postgraduate context is probably not enough to help students achieve career goals.

More than one-third of adults, according to a Strada survey, would choose a different major if they could start over. People with greater incomes expressed less regret about their choice of major.

3. Revolutionize employer relationships

Online education providers are ideally situated to forge strong B2B alliances with businesses eager to upskill their employee bases and draw in fresh talent.

The capacity of these providers to swiftly modify their courses, along with their track record of working with working adults seeking to enhance their professions, raises the possibility that such alliances could be a significant growth driver.

A recent Udacity poll indicated that while a majority of younger people believe their companies should invest in their future by providing them with skill training, almost 60% of employers said skills gaps are having a large or moderate impact on their organization.

Few educational institutions, though, have successfully used B2B to increase enrolment. Traditional B2B strategies often fail to sufficiently address the talent transformation needs of corporate partners.

The time may be right to reconsider how digital educators approach B2B collaborations given the significant talent issues organizations are facing and the desire of potential students to establish career connections.

While the nature of B2B strategies may vary across institutions, we have identified a few emerging, innovative approaches that could help institutions build strong B2B partnerships.

Put your attention on profession-specific abilities that can easily answer employer pain issues. Instead of concentrating on the skills required for a particular industry or job function, many online universities provide a wide variety of certificate and training programs in an effort to demonstrate the overall value of their education to a prospective partner.

Online education providers could find very specialized and useful abilities that might address the most pressing talent development pain points by examining particular sectors or roles.

Institutions using a skills-based approach frequently need to create new content, bundle it, and arrange it differently while adding project-based learning. Universities may find it challenging to concurrently modularize all of their curriculum due to a lack of resources. They might get started by concentrating on particular professions and businesses.

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