David vs. Goliath: Shifting Dynamics in the Cert. & Licensure Testing Market

The 3Ps – Pearson, Prometric, and PSI – have long dominated the certification & licensure testing market. Corporate and government certifiers (i.e., employers) have historically contracted with providers with extensive in-person testing center networks, offering what were mostly traditional multiple choice exams. Because of poor digital infrastructure, certifiers could not rely on broad and consistent internet access, so it was not possible to offer virtual and dynamic performance-based tests. And because operating testing centers is expensive, only those providers with considerable global reach and reputation could meet the demand.

Shifting Dynamics from Traditional to Performance

As digital infrastructure has improved globally, performance-based tests have become a more realistic and thus attractive alternative to traditional exams. Performance-based tests (also known as ”performance assessments”) flip traditional exam styles on their head. Instead of testing rote memorization of concepts, they test a candidate’s ability to perform and adapt in real-time in  real-world situations. These tests offer certifiers higher reliability and validity of a candidate’s knowledge, skills, and capabilities. In addition, the ability offer these performance-based tests virtually instead of in-person has introduced more optionality and affordability for certifiers and their candidates. This includes performance-based test proctoring segmented into three categories:

• Automated: Technology monitors the test taker to determine whether they are cheating
• Live Remote: Live proctors watch test takers on video in real-time
• Record & Review: Sessions are recorded as the computer monitors the test taker; proctors may then review the video after 

Beyond these core value propositions, performance-based tests have also created new marketing channels for certifiers: hiring processes. Alongside their own marketing efforts, certifiers can leverage their relationships with performance-based testing providers as a means for candidates to more accurately and conveniently distinguish themselves in the applicant pool and selection process.

The Davids

Recent market activity highlights the continued rise of performance-based testing. Below, we have selected three interesting emerging providers as illustrative examples.

First, Skillable.

This skills development platform provider caught our attention with their February announcement of a follow-on growth funding round led by Shamrock Capital. Skillable has established relationships with major certifiers like Microsoft, AWS, and CompTIA, and is well-acquainted with performance-based testing. Skillable’s main claim-to-fame is its scoring system, which allows employers to automatically grade performance-based tests and track candidate progress.

Next, Glider AI.

This provider has also recently received funding, announcing a $10M Series A capital raise led by Primera Capital earlier this month. Glider AI calls itself a skills intelligence platform, and its platform supports performance assessments in hard skills, like coding, as well as softer skills, like customer service. We find the AI proctoring software that Glider offers to companies particularly interesting. This technology captures data before, during, and after an exam, documents instances of potentially suspicious behavior, and allows exam administrators to investigate and decide whether to action on them. It adds easy-to-use human checks and balances to AI that may differentiate Glider from its competitors.

Finally, iMocha.

This skills analytics platform provider recently announced a partnership with Microsoft to develop AI-EnglishPro, a product designed to assess candidates’ proficiency in workplace English communication by placing them into real-world scenarios. iMocha also offers a smart proctoring system, and emphasizes its ability to pinpoint exact moments where cheating may have occurred, as well as the severity of the offense. The smart proctoring system also prevents test-takers from copying exam questions, which may be attractive to certifiers as they try to protect their IP.

The Goliaths

Despite the emergence of Davids, the 3Ps (Pearson, Prometric, and PSI) still have sticky, long-established relationships with certifiers. These providers may be unwilling to sink money into switching providers, especially since the 3Ps aren’t sitting on their hands when it comes to performance-based testing. Prometric, for example, has offered performance-based testing through a partnership with TrueAbility since late 2020. Certifiers are also interested in consolidating relationships, i.e., having one provider manage their entire certification business, which trends toward more market consolidation. Moreover, features beyond performance-based testing functionality may be more important to certifiers, for example, strict data security policies and strong assessment design. The importance of these two criteria also points to the stickiness of established players.

All said, the certification & licensure testing market is sure to be an interesting battleground over the next few years, centered around greater demand for performance-based testing and automated proctoring and balanced against data integrity and security. We at Tyton will be closely watching both established and emerging providers, and we encourage you to do so as well.