Human Capital: Spotlight on Hire Train Deploy
Over the course of the last five years the Hire Train Deploy (HTD) sector has attracted significant interest from the investor community. A constant stream of success stories, heady public market valuations for the industry bellwether FDM, and assets comfortably delivering double or even triple digit growth piqued the interest. Combine this with a robust market outlook for the technology sector and a revenue model that, if executed well, exhibits multi-year revenue visibility, then what is not to like.
Up until now hype around the sector has been in the context of the combination of the greatest demand for digital and data skills in decades and the inability of the educational institutions to adapt quickly enough to deliver young individuals with these skills to corporate employers. The HTD sector modus operandi has been ‘build it and they will come’ and the focus has been on securing quality graduates and successfully passing them through the training programmes in the knowledge that the demand will exist at the other end. Even the impact of the pandemic during 2020 saw the industry only miss half a beat as it transitioned to new training delivery methods before continuing on its rapid growth trajectory.
But now the relatively young sector is entering unchartered territory having existed blissfully through three years of a fierce war for tech talent. An economic slowdown is never helpful and high profile headcount cuts at the world’s most recognisable technology brands – Meta, Twitter, Google, IBM, Salesforce, the list goes on – as well as the refocusing on AI-led delivery, has meant that suddenly it is not quite as easy to deploy young talent as it has been, with corporates finding it easier to source, hire and train graduate talent directly. The success in the HTD sector has also seen a raft of newcomers and increased competition, with larger recruitment and consulting firms setting up academy operations to enter the fray, albeit with varying levels of success, and an increasingly sophisticated procurement landscape as employers get to grips with the HTD proposition.
But it is far from all doom and gloom and there are many reasons to think this is just a pause for breath. Every emerging sector goes through its ‘shakeout’ at some stage, leaving its winners sitting pretty, and the digital transformation agenda is going nowhere in the medium term. It is also highly unlikely that the institutional tertiary education system is going to revamp overnight to deliver ready made talent to corporates. The HTD proposition is built on solid fundamental benefits to the comfortable triumvirate of provider, consultant and corporate and that will see the model sustain into the long term.
The winners in the next 12 to 24 months will be those who evolve their training propositions to address high growth niches within the broader technology ecosystem rather than allowing their content to age and lose relevance. Providers with the foresight to have invested in a slick business development process will also see a more resilient core of demand. Those that retain their focus on gold standard outcomes for both graduates and employers and differentiate themselves from the ‘me too’ providers that outsource their training capabilities may well emerge in better shape than ever.
It may be the first bump in the road for the HTD sector as we know it today – and as an industry it is not alone - but there is no reason to suggest that any providers in the sector should be looking forward with anything but optimism.
Contact the team
