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Six Workforce Investment Trends to Know Now

July 26, 2023

At a Glance

Insights from JFFVentures, the nation’s leading impact investing fund.

Contributors
Sabari Raja Managing Partner
Yigal Kerszenbaum Managing Partner
Practices & Centers

JFFVentures is the nation’s leading impact investing fund specializing exclusively in emerging future of work and workforce development technologies with the potential to improve economic advancement for workers from low-income backgrounds.

In our latest impact report, we identified six key trends that we learned through our work as the first impact investor that specialized in workforce technology. These insights are helping to shape our investment thesis that’s expanding our impact by investing in early-stage companies.

1. There are tremendous investment opportunities amid technological and economic change.

2022 was a year of significant adjustment. Every organization—startups, established corporations, investment firms—had to rebalance their priorities, focus on the essentials, and be prudent. In the investing world, we experienced a major slowdown in activities and a softening in the tone and speed of conversations between founders and investors. However, we also saw that impact investors continue to play a critical role in fueling innovation and impact in the technology market. Alongside JFFVentures, many impact funds are leaning in to support and accelerate companies driving essential innovation. That’s particularly important because we’re seeing the birth of many new companies that are interested in scaling the use of potentially transformative artificial intelligence (AI) applications in education and work. We believe that investors who care deeply about promoting equity, inclusion, and economic advancement opportunities for all learners and workers should be the ones seeding innovation in these early-stage technology companies. We further believe that if we want to drive lasting change, the next generation of education and workforce technology companies must be built on a foundation of high ethical standards, rigor, and user-centered approaches.

Our decision to expand our investments in the development of technology at the intersection of education and workforce development is driven by new market opportunities that have emerged. Economic uncertainty is forcing companies to cut costs and prioritize essential expenditures. This is forcing both established corporations and startups to be lean and focus on what works. They’re now prioritizing products, processes, and services that deliver the highest returns on investment (ROI) and have shown the potential to successfully expand opportunities for worker advancement. Since we invest in technological solutions that respond to workers’ unique needs, realities, and aspirations and ultimately make them better off, we’re optimistic about this trend.

2. The value of partnerships has never been greater.

The increase in collaboration among startups, corporations, nonprofits, workforce boards, and economic development agencies also fills us with optimism. We have countless examples of JFFVentures companies partnering with corporations and helping them tackle their major talent challenges. We’re seeing how by working together, companies can reinvent talent management and learning practices to emphasize equity, put people at the center of business strategy, and spur economic mobility. We’re motivated and excited to provide a platform for this collaboration through the JFFVentures Corporate Innovation Council, a group of forward-thinking corporate leaders who are committed to helping entrepreneurs grow their businesses and deepen their impact.

3. Artificial intelligence is evolving rapidly.

Recent advances in AI—most notably the launch and widespread use of generative AI, including ChatGPT and Bart, among others—have made it clear that this technology could have significant impacts on the employment prospects of people in low-wage jobs. Here are some examples:

  • Job displacement: AI technologies could automate tasks currently performed by entry-level and frontline workers, leading to job displacement and unemployment.
  • Wage suppression: In some cases, deploying AI technologies may be cheaper than paying people to do certain things, and that could lead to wage reductions in some industries.
  • Bias and discrimination: AI systems behave in ways that reflect the data they’re trained on. If AI algorithms are built with biased data, they could perpetuate systemic inequities and discrimination.

Meanwhile, we’re also seeing very positive impacts from AI. Here are some examples:

  • Career navigation: AI algorithms can analyze a student’s interests, strengths, and weaknesses to provide personalized recommendations on career paths or areas of study. This can help students make more informed decisions about their futures and feel more confident about their choices.
  • Virtual mentoring: AI can simulate human mentors by offering feedback and guidance to students in real time. This can be particularly helpful for students who don’t have access to traditional mentoring opportunities or who need additional support outside of the classroom.
  • Enhanced learning experiences: AI can create immersive learning experiences that engage students and help them develop new skills. For example, it can generate interactive simulations or games that teach students about complex concepts or provide practice opportunities for real-world situations.

Overall, the impact of AI on workers in low-wage roles will depend on how these technologies are implemented and used. It’s important for policymakers, employers, and workers to be aware of the potential impacts of AI and to work together to ensure that these technologies are used in ways that are beneficial for all workers. This could involve investing in education and training programs to help low-wage workers build new skills, implementing policies to protect people from job displacement, and ensuring that AI systems are designed and implemented in ways that are fair and unbiased.

4. The deskless workforce is in need of new technologies.

There is a software equality gap affecting 80% of workers worldwide: the members of the deskless workforce. A growing number of large employers now recognize that this is a problem and are expressing interest in investing in tools that help them attract and retain deskless workers. We’ve seen evidence that perks and benefits tailored to address deskless workers’ daily needs are cost-effective and have a positive impact on worker job satisfaction. We feel that it is imperative to invest in startups building innovative solutions for the deskless workforce and supporting companies tackling major challenges.

5. There’s a need to expand and diversify the green talent pool.

Employers in industries tied to efforts to build climate resilience are experiencing labor and skills shortages. Moreover, the current talent pool for green jobs is predominantly white and male. That creates a tremendous opportunity for startups that offer training solutions that can help workers build the skills they need for climate-related jobs. It also means there are opportunities for companies to develop and scale innovative products and services that build pathways to quality green jobs for people who are members of groups that are underrepresented in that sector of the economy, including people of color and women of all backgrounds. And we’re seeing a growing number of entrepreneurs doing just that: promoting equity and opportunity in the green economy. JFFVentures has invested in several of these companies, and we’re looking to add more of them to our investment portfolio to help ensure that the rise of the green economy benefits everyone, especially members of communities most impacted by climate change.

6. Workplace gender inequities persist.

Companies are stepping up to meet the growing need for new technologies and other products and services that support women in the workforce and enable them to advance and thrive in their careers. In particular, we’re seeing increasingly sophisticated approaches to fulfilling the need for child care services, with innovative models that address both employees’ and employers’ needs. Similarly, companies are starting to design and offer benefits tailor-made for women in the workforce, including offerings that address needs for reproductive health care, family or household supports, and financial services. Finally, we’re witnessing the emergence of innovative training and learning solutions that help women get the training they need for career advancement on their own schedules and at their own pace.

As workers face increased uncertainty, at JFFVentures, we believe that as impact investors, it’s our time to lean in and support the funding and acceleration of the ecosystem of startups and founders that are committed to building a more inclusive future of work. We’re excited to continue to meet and partner with exceptional entrepreneurs and remarkable companies.

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