The Career Education Paradox
Career education works–why do so few people and companies take advantage of it?
Companies spend immense sums hiring employees, but despite this immense cost, employers spend very little on professional education. Currently, employees on average only spend $986 on career education/employee/year but it costs employers an average of $4,425 per non-executive hire and $14,936 per executive hire.
Why do companies spend so much money sourcing and hiring employees, but then spend so little developing them once they are hired? We know that career education works. Career education can improve employees’ job performance, financial returns, and employee retention. It can also improve employees' earnings.
So why are companies so reticent to provide career education to their employees? And why do so few people pursue career education? Well, it seems that career education is fundamentally broken, for two reasons: 1) it’s difficult to create courses that actually provide value to learners, and 2) there are few career education options targeting mid-career professionals.
Creating great courses is difficult for several reasons — namely the illegibility of career knowledge, the adverse selection problem for teachers, and the speed at which course content becomes outdated.
1. Career knowledge is often illegible.
The knowledge that is useful to professionals is often very illegible to outsiders. Professionals often have jobs that are difficult for people outside of the field to understand. For example, what does a lawyer actually do all day? It varies immensely depending on the field and specialty. The difference between theory and practice can often be immense. Third parties are not well suited to understand the learning needs and challenges of modern professionals. It’s just too difficult to get up to speed without being immersed in a field full time.
The best knowledge is often local, not global. The real causes of success are often hidden from us. Therefore, trying to explicitly describe the knowledge of how to be successful in a given field can be very difficult. This is the classic green lumber problem Nassim Taleb describes in his book Antifragile:
“In one of the rare non charlatanic books in finance, descriptively called What I Learned Losing A Million Dollars, the protagonist makes a big discovery. He remarks that a fellow called Joe Siegel, the most active trader in a commodity called “green lumber” actually thought that it was lumber painted green (rather than freshly cut lumber, called green because it had not been dried). And he made a living, even a fortune trading the stuff! Meanwhile the narrator was into theories of what caused the price of commodities to move and went bust.
The fact is that predicting the order flow in lumber and the price dynamics narrative had little to do with these details —not the same thing. Floor traders are selected in the most non narrative manner, just by evolution in the sense that nice arguments don’t make much difference.``
2. Course content quickly becomes outdated.
Additionally, the fast pace of innovation in software means that career education learning content quickly becomes outdated. Learning content that is even just 2 years old can quickly become useless, as the fast pace of innovation means that previously useful skills can quickly lose their value.
Take Ruby on Rails for example. Ruby on Rails was an extremely popular application framework. Ruby on Rails launched in 2005. It was quite influential in web development and featured seamless database creation, migration, and scaffolding.
Ruby on Rails powered companies like Airbnb, Crunchbase, and Github. It did not last forever, however, and now Ruby on Rails has been usurped by other platforms, like Node.js. You can see Ruby on Rails peaked in popularity in 2010, and has slowly declined in popularity. The pace of innovation, particularly in software, means that knowledge and skills can quickly become outdated.
(Credit, Serge Koba)
3. Teachers face an adverse selection problem.
Most of the world’s knowledge is trapped inside the heads of key operators. The best and most effective teachers in any given discipline are actively building, and don’t have time to teach. For example, Elon Musk is busy building SpaceX and Tesla, he doesn’t have time to teach you how to be more effective as an operator.
As George Bernard Shaw once said: “Those who can, do; those who can't, teach… Activity is the only road to knowledge”
Teachers can’t directly access world class operators to share their expertise. At best they can get it secondhand from studying their writings or talks. This is true in almost all fields, but it is even more true in career education, where being behind at all on the current state of the art makes your content worthless to learners.
There is little focus on education for mid-career professionals.
So far, we’ve established several key difficulties in implementing career education. Not only is creating great career education hard, but almost none of it focuses on the people who need it most — mid-career professionals.
Currently, career education is largely focused on early career education, which prepares you to start a career, and executive education, which focuses on high-level managers.
Early career education is a saturated market. We have over 2000 colleges and universities in the United States that offer bachelor's degrees, and a wide range of bootcamps and career entry programs.
Executive education has many options, with many business schools offering programs to help upskill management and management consultants who can provide effective management training.
However, there is little education targeting mid-career professionals, who are stuck somewhere in the gulf between individual contributors and senior managers. The path from mid-career professional to the executive level is often illegible. Early career education makes sense — you go to a good college, get a degree, and find your first job. Executive education is similarly easy to understand, you’ve already become an executive, you just need to uplevel your skills. But mid-career professionals are left without a clear direction or a path forward to uplevel their career.
Thus, mid-career education is underserved. Currently, the only option for mid-career professionals is an MBA, which now costs an average of $199,544 for a top-25 program. The explosion in the cost of MBA programs, and the realization that they offer little in the way of substantive learning or applicable skills means that mid-career professionals are left with few options.
We believe that a better way is peer-to-peer learning with people at your level or just one step ahead. Instead of relying on top/down teaching, relying on a cohort of peers to learn and grow with means that you can get to the forefront of professional knowledge and best practices without requiring huge cost.
People learn best by learning in smaller groups, especially 1:1. Educational researcher Benjamin Bloom found that tutoring raised student performance relative to baseline by two standard deviations. The best teachers for professional education in tech are your peers. The knowledge that is useful to mid-career professionals is not knowledge you can find in a textbook. It’s the knowledge that isn’t written down. It is a set of norms that are implicit, and not explicit.
Tech moves too fast for higher education professionals to keep up. Any course they create will by definition be outdated by the time they teach it. Learning from a group of smart peers, who are actively working on the problems you care about right now. For example, the best knowledge about AI is currently held in the minds of engineers at OpenAI, Google, and Facebook, not in Academia.
Providing operators with value (a network of peers) enables them to teach other professionals how to upskill, without wasting their time in formal one-to-many lecture halls.
Fixing career education means that companies will become more profitable, and employees will become more effective in their jobs and make more money. Education has previously been confined to the years between 18 and 22. The rise of inexpensive, cohort-based education means that in the 21st century, you won’t just be learning for 4 years of college, you’ll be learning for the rest of your life.
While we at On Deck have programs across positions, I also want to shout out to other great companies in the space doing great work in different ways: Maven, Reforge, Bloom Tech, SV Academy, Flockjay, Pavilion, Chief, and many more.
Thanks to Will and Sachin for co-writing.