Published on 2018/09/11

The Evolving Transactional Nature of Credentialing: Alternative Credentials Today

The EvoLLLution | The Evolving Transactional Nature of Credentialing: Alternative Credentials Today
Credentials provide the means of skills verification for educators and employers alike, but traditional methods of credentialing haven’t kept pace with technological advancements or market demand. By shifting towards more granular, skills-based credentialing, higher ed can retain its relevancy in a skills-based workplace.
As the distinction between learning at colleges, universities and workplaces continues to erode, credentials are supplanting the traditional role of the degree in terms of skills verification. Unlike the degree, credentials offer individuals the opportunity to showcase all aspects of “life-wide” learning, providing substantially more detailed insight into a person’s transferable abilities for both the classroom and the workforce. In Part One of this two-part interview, Jonathan Finkelstein discusses traditional postsecondary approaches to credentialing, and argues that the increasingly transactional nature of credentials justifies a more granular approach to skills verification.

The EvoLLLution (Evo): Why is credential innovation such a hot topic today?

Jonathan Finkelstein (JF): Credential innovation is a hot topic because it addresses the three trends which are most impacting higher education today: the skills gap, the communication gap, and the use of technology and data to solve for both.

When I say skills gap, I mean that there are many new ways and places for skills to be learned, assessed and cultivated, but until recently there was very little innovation in how we validated skills learned outside the classroom. That also speaks to the communication gap. Until recently, we didn’t have the language to communicate those proficiencies to higher educators and employers. We had to ask ourselves: How do we assure employers that people have the skills they claim to have?

You can add several other factors to these trends: the student debt crisis; the proliferation in places that one can go to learn, including a new range of programs at colleges and universities and outside them; new ways to learn on the job; and a heightened scrutiny on outcomes. Given all this, educators and employers are turning to credentials because they bring a greater degree of transparency to this flurry of new and different ways to learn.

Evo: What are the more fundamental issues with traditional approaches to credentialing?

JF: You need to consider this question from the perspective of the three groups that constitute the labor market: employers, individuals, and the colleges, universities and associations that provide the ability to learn, upskill, and train.

If we look at it from an employer’s perspective, the confluence of a tight labor market and a shortening “shelf life” for skills makes it challenging for them to find talent that has the specific skills they need. At the same time, employers recognize the need to address the unprecedented churn of employees, in terms of retention and people moving from company to company, and so they need to reduce their costs in finding and training new workers. They’re looking for new tools and strategies to become more efficient in identifying incumbent employees that could be upskilled, and in finding new skilled workers. This points to the need for a competency-based marketplace and a culture of recognition that more consistently identifies the skills that people have within the organization.

For individuals, those very same forces are also encouraging job seekers to translate their capabilities into a language that the labor market can understand. While a bachelor’s degree is increasingly regarded as a requirement on job applications, it basically serves as little more than a first cut in reducing the number of applicants to an individual job. What actually helps a person get a job is their specific skill set. Individual job seekers need to demonstrate that they have the skills they need to perform the job in question.

Finally, colleges and universities are under a lot of pressure to prove their value to students, employers, and policymakers, which means that there has to be a demonstrable ROI for degrees and extended programs. They’re working very hard to translate the educational experience they provide into verifiable, portable data that employers and individuals can understand and use.

This creates a perfect storm of conditions fueling interest and demand for more kinds of transparent credentials.

Evo: You’ve pointed to the idea that the value of a degree as a proxy for competencies and skills is giving way to a more granular recognition of skills. In 2018, what is a valuable credential?

JF: The most valuable credentials are portable, shareable, verified, data-rich, and secure—in short, they’re durable. Regardless of the type of knowledge or skills that a credential recognizes, it has value if the person who earned it can communicate their expertise in a way that an employer or third party can easily understand.

A valuable credential is portable, meaning that it is owned by the individual who has demonstrated the skill in question. There’s a diminishing tolerance for the notion of having to request your transcript from a registrar’s office. As the trend towards life-wide learning, meaning you’re learning from multiple sources concurrently, grows, the notion of having those skills locked up in the systems in which the learning assessments happen does not provide value to the individual. That’s why portability is important. Individuals need to be able to carry the most granular evidence possible of what they know and can do.

Verifiability is also important. Employers are increasingly distrustful of self-reported statements made by applicants. In recent studies, 80 to 85 percent of employers said that they uncovered a misrepresentation in a job application. Verifiable credentials solve that problem. They take away the self-reported nature of achievements and allow the organization that assessed the skill to provide a consistent, official description of the achievement. They also help standardize those achievements so that everyone has an equal way of representing equal capabilities.

I mentioned “durability” as a key feature of valuable credentials. The bottom line is that credentials need to be not only portable, but permanent. We’re willing to store our most personal memories and data with third-party cloud services so that we always have access to our photos and finances, and the same must be true of our credentials. Regardless of where and when we produced something, we should be able to access it. That’s why there’s such interest in things like blockchain, because they help to reduce reliance on any single point of failure when it comes to important data.

This interview has been edited for length and clarity.

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Key Takeaways

  • In today’s job market, the value of a degree lies in being the “first cut” for job applicants. Employers are requesting granularity and proof that a prospective hire has the skills they claim to have.
  • Technological advancements in skills assessment have enabled universities and employers to provide a detailed account of an individual’s skills and abilities, both in terms of formal training and on-the-job evaluation.
  • A valuable credential is portable, verifiable, accessible and durable. The future of credentials lies in blockchain technology, with individuals, rather than institutions, holding the designation.