Vocational Training Industry
- Globally, the vocational training market size is projected to reach $80.1 billion by 2026, with an annual estimated CAGR of 10.1%.
- Specifically, there is an increased demand for vocational training for older, experienced students who are seeking to upskill later in their life.
- Demand for multi-modal and multi-channel vocational training have increased, with demand for online and hybrid learning formats increasing rapidly worldwide.
In order to provide an understanding into the competitive landscape for vocational training, we've provided information and insights into the demand for vocational training globally, including a focus on enrollment in vocational trade schools, key players' competitive strategies, and collaborations or acquisitions in the vocational training market. We found the following insights and trends in the space; rapid growth in response to pandemic related business challenges, a shift in age and experience levels of students, industry partnerships driving tailored training alongside increased career opportunities, challenges in student retention, shifts in funding models, and increased demand for multi-channel and online training delivery.
- One of the most notable recent trend in the vocational training space is how rapidly it's currently growing.
- Globally, the vocational training market size is projected to reach $80.1 billion by 2026.
- This represents an annual estimated increase of 10.1% between 2021 to 2026.
- The market size was $40.8 billion in 2019.
- Specifically, growth has come from the impact the pandemic had on business productivity and employability in entry level sectors, whiche increased the demand for skill development through vocational training.
- Trade school enrollment is also experiencing record growth.
Shifting Student Ages
- Another trend in the vocational training space is that students are enrolling at both earlier and older ages than in the past, with an distinctive increase in enrollment amongst students who are later in their life.
- In many global regions, older workers require new skills to keep up in the modern workforce, which has increased vocational training amongst those over 50.
- Similarly, as the value of vocational training as a student pathway to reliable employment becomes more apparent, there has been an increase in enrollment of students between ages 15 to 19 in many regions.
- Specific to the advancements in HVAC technology. HVAC training space, the increase in age of those seeking vocational training has increased alongside experience of those seeking training, as older techs seek to keep up with
- Providing training to older, existing employees helps company owners working on a smaller training budget reduce the higher cost of hiring and training inexperienced or new technicians.
- Another trend in the vocational training space is that industry partners are beginning to provide tailored skill training to fill their existing jobs more effectively.
- Because this skill training is often partnered with specific job opportunities, it offers a significant value to those wishing to enter a new career field with job security.
- The model focuses on "establishing deeper collaborations, and broadening or customizing training".
- Accredited trade schools for electricians for example are more likely to combine certification with a transition into an apprentice program, to secure required employees by lowering overall cost of training.
- In fact, large corporations are some of the key players in the vocational education and training sector, with companies like Adobe Systems, Cisco, and IBM all considered some of the largest vocational education providers, through offering customized trainings specific to their employment needs in order to stay competitive.
- Due to an increasing range skill training options both online and offline, addressing challenges in student retention is a trend in the vocational training space right now.
- One source even calls student retention "the new battleground" in the vocational training space.
- Because the cost of acquiring and training each learner is significant, vocational training providers are highly focused on avoiding losing students mid training program.
- Key factors vocational training providers are focused on to improve student retention include gaining a richer understanding of student risk factors for program dropout, tracking external student circumstances such as financial challenges, and more rapid and attentive response to students at risk for dropping out of a vocational training program.
Shifts to Funding & Cost Models
- Vocational training institutions and organizations have had to rethink their funding models in recent years.
- The need to shift funding approaches for vocational training is related to revenue uncertainty due to challenges forecasting future skills, as well as increased competition in the space cutting into profit margins.
- In order to avoid overinvesting in training programs, institutions have begun to redesign their infrastructure to incorporate more use of low cost technologies to minimize expense.
- For example, online collaboration tools and virtual simulators have allowed vocation training programs to reduce costs of physical instruction.
- Cost-sharing arrangements for instructional services have also been a funding model that has increased for vocational training in recent years.
- New models for profitability by organizations offering vocational training are being created through more scalable programs, and diversified revenue streams.
- Demands have increased diverse formats for vocational training as well.
- Multi-modal and multi-channel training have increased, with a high demand for online and hybrid learning formats increasing globally.
- Specifically, use of online simulation to replicate face to face courses have been in high demand.
- Learning formats that can be accessed via mobile devices have increased as well, as the move towards mobile learning grows globally.
- For example, HVAC learning is being enhanced by virtual reality options which allow students to access HVAC equipment simulations to support increased skills gains in vocational training programs.
For this research on the demand and competitive landscape for vocational training we leveraged the most reputable sources of information that were available in the public domain, including industry reports, business media sources, and market reports, focusing on information that would be the most relevant ofr trade schools offering HVAC, plumbing, and electrician training.