Beyond Bootcamps: Three Trends Shaping the Future of Skills and Training

In early January, the New York Times ran an article about a Silicon Valley startup called Lambda School that had just raised $30 million in financing. The startup is attempting a new type of coding bootcamps, which are typically short-term programs that teach people with little coding experience the critical skills needed for employment in the field.

In early January, the New York Times ran an article about a Silicon Valley startup called Lambda School that had just raised $30 million in financing. The startup is attempting a new type of coding bootcamps, which are typically short-term programs that teach people with little coding experience the critical skills needed for employment in the field.

Instead of charging an upfront fee, Lambda uses an Income Share Agreement (ISA) where students only pay after graduating and earning over $50,000 per year. At that point, they pay 17% of their salary over two years, capped at a maximum of $30,000. This model aims to reduce the need for student debt while incentivizing Lambda to deliver the best employment outcomes possible for their students.

With 800 million people expected to be displaced by automation globally by 2030, accelerated short-term programs like coding bootcamps will be critical to how we reskill and upskill displaced workers. Traditional bootcamps, however, are expensive and limited in their accessibility and impact.

Lambda School represents a growing movement to make the bootcamp model better. Over the past few months, I have reviewed over 600 similar initiatives for the Royal Society of Arts’ inaugural Future Work Awards across a range of categories.

The skills and training initiatives clearly demonstrated three trends that are making bootcamps more accessible and more sustainable: outcomes-based revenue models, demand-led design, and work-integrated approaches.

Traditional Bootcamps — An Incremental Solution

Coding bootcamps have grown incredibly rapidly. Since 2013, the number of bootcamps in the US has increased nine times to 108, and with over 20,000 graduates in 2018. To put that in context, all US colleges combined only graduated 35,000 computer science students in 2016. For aspiring software developers, these bootcamps are a quicker and cheaper way to build in-demand skills than a four-year degree. The model has quickly spread to other career paths such as digital marketing, data science, and graphic design.

Source: Course Report

Traditional bootcamps, however, are at best an incremental solution to our workforce development model. Although not as expensive as a degree, they still cost an average of $11,000 per program with little guarantee of employment, making them inaccessible to the majority of the population. After a period of rapid growth, some of these bootcamps are now finding it increasingly difficult to prove their value. In 2017, two large bootcamps Dev Bootcamp and The Iron Yard both closed their doors because of their inability to find a sustainable model.

It is clear that there is demand for these bootcamps, but the model also has significant room for improvement. Here are three ways how innovators are doing so around the world:

Trend #1: From Fee-For-Service to Outcomes-Based

Lambda School represents this first trend of moving from a fee-for-service to an outcomes-based revenue model. Traditional bootcamps and colleges typically operate with students paying upfront. The challenge is that these institutions are directly financially incentivized to attract as many students as possible, not to ensure the best employment outcomes for their existing students.

These programs will report employment statistics to attract students, but the statistics can be easily manipulated. In 2017, for example, the Flatiron School was penalized by the New York Attorney General for improperly advertising their job placement rates. The program reported a 98.5% job placement rate but this included apprentices, contract employees, and freelancers. Only 52% of graduates had received a full-time salaried role.

Models like Lambda School, on the other hand, make the financial burden of training less arduous for the student while directly aligning the financial success of the program with the student. With this design, programs can focus on better serving underserved demographics.

Laboratoria, for example, operates a six-month bootcamp for underserved women in Latin America while Pursuit, a non-profit from New York, runs a four-year program for adults making less than $45,000 per year. It combines 10 months of training with 36 months of post-graduation support including career coaching, interview preparation, and financial planning.

By focusing on outcomes-based payments, training that was once expensive and difficult to justify is becoming easier to access.

Trend #2: From Supply-Led to Demand-Led

Too often, training programs are designed based on the needs of the users (i.e. the supply) without consideration or input from employers (i.e. the demand).

For example, the non-profit bootcamp LaunchCode had to close its Seattle and Portland programs in 2018, despite over $8 million in federal funding and previous success in markets like St. Louis. Entry-level technology skills were in high-demand in St. Louis, whereas employers from Seattle and Portland have their choice of the best junior-level developers from across the country. Even though students were eager to enroll, the program failed because companies did not want to hire their graduates.

For training programs and bootcamps to be successful, the needs and wants of employers should be considered throughout the value chain. Per Scholas,a non-profit that offers IT training programs for underprivileged women and people of color, is one program that works closely with employers including IBM, Barclays, and Cognizant. Cognizant agreed to pay Per Scholas to find and train 650 people, of which they would hire up to 400. The remaining graduates will continue to be supported by Per Scholas to find careers with other employers.

By working so closely with corporate partners, organizations like Per Scholas ensure that their services are useful to employers and in turn, to students as well.

Trend #3: From Siloed Bootcamps to Integrated Apprenticeships

However, even the best outcomes-based and demand-led bootcamps can struggle to place their graduates into income-generating employment opportunities. And regardless of financial costs, bootcamps will always require a significant investment of time.

Integrated apprenticeships that provide paid work experience while delivering the training of a bootcamp can further increase the accessibility of re-skilling. Hardly a new concept, apprenticeships have been the common training model for blue-collared work for decades. Over the past few years, we have seen an increasing number of organizations launch apprenticeship programs in traditional white-collared industries.

Catalytein the US uses algorithms to identify high-potential software developers without the traditional educational background. Once selected into the two-year program, Catalyte trains these individuals over 12 to 20 weeks before integrating the graduates into paid work on software development teams with Fortune 500 clients. Techtonic Group, meanwhile, operates a similar program where clients are encouraged to hire apprentices with no additional cost after 1,000 hours (~six months) of work together. AnnieCannonshas adapted the model to train survivors of human trafficking.

By integrating paid work experience into the process, students are better able to proactively justify re-skilling towards a new career without jeopardizing their current income and financial situation.

So, What’s Next?

The nature of work is changing. There are already 44 million people owing $1.5 trillion in student-loan debt in the US alone. Hundreds of millions of people around the world are expected to have their careers further disrupted and displaced by technology and automation. To prepare for this, we need to advocate for models that can quickly and sustainably train workers for new careers — models that are outcomes-based, demand-led, and work-integrated.

The three emerging bootcamp models are encouraging attempts to make training more accessible. We cannot, however, solely rely on these individual solutions built from the ground up. They can only serve so many people in certain industries — often with a highly rigorous selection process ­– and scaling and replicating these models will be challenging. Just as we cannot expect Tesla to solve climate change, we cannot expect these startups to solve education, student debt, and workforce development issues by themselves.

Governments, post-secondary institutions, and employers will have to be involved so that we can apply these ideas on a broader scale. Only then can anyone, regardless of their natural skills and ability, find a way to adapt and thrive in the changing nature of work.