Many CEOs are frustrated by the so-called Great Resignation. But Cengage Group’s Michael Hansen sees a big business opportunity in this massive wave of employee job-hopping and career-shifting brought about by the pandemic.
Hansen, chief executive of the Boston-based textbook publisher, is betting on the growth potential of workforce training software. That’s why he has inked a $191 million deal for Cengage to buy Infosec, a Wisconsin-based provider of skills development and certification programs for the cybersecurity industry. He’ll fold it into Cengage’s ed2Go business after the deal closes in March.
Infosec was started by Jack Koziol, its chief executive, in 2004, and now offers more than 1,400 online cybersecurity courses. About 100 people work for the firm, primarily in Wisconsin, and nearly all will join Cengage’s 4,500-person workforce. Koziol will remain with Cengage for a transitional period.
“It’s a growth area,” Hansen said. “We can’t hire people fast enough.”
The acquisition of Infosec, announced on Monday, is the first such transaction that Hansen has made in his expansion of Cengage’s workforce division. This group represented about 5 percent of Cengage’s $1.3 billion in revenue last year, Hansen said, but he envisions growing that number to at least 25 percent eventually. To get there, Hansen expects to develop many certification courses in-house and also make some selective acquisitions, like the Infosec deal.
The Infosec announcement coincided with a similar transaction, also unveiled on Monday, this one involving Cengage rival Pearson. The British publisher said it has acquired Credly, a provider of digital workforce credentialing services, in a transaction valued at about $200 million. (Pearson already had a 20 percent stake in the firm.) Like Cengage, Pearson is investing in its workforce skills business — the Credly deal being the latest example.
“Right now, the demand for workforce skills courses is just exploding, and it’s exploding in very specific job categories,” Hansen said. “There is such a labor shortage, every CEO tells me that. ... The labor shortage is really a skills shortage.”
Cengage estimates that there are 600,000 unfilled cybersecurity jobs in the United States alone today, with more than half requiring at least one kind of certificate. From Hansen’s perspective, the other two most in-demand sectors are health care and building trades, such as plumbers and electricians. Cengage’s workforce skills division focuses on certificate programs that can last six to 18 months, and cost up to a few thousand dollars.
“I think we have a tremendous opportunity now with COVID to really rethink how we look at these jobs,” Hansen said. “It’s a business opportunity, for sure, but I think there’s a social impact that’s really important as well.”