Published on 2018/09/18

The Evolving Transactional Nature of Credentialing: The Future of Alternative Credentials

The EvoLLLution | The Evolving Transactional Nature of Credentialing: The Future of Alternative Credentials
As credentialing—and the data embedded within credentials—continues to improve, their use for students and employers will grow exponentially.

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 the conclusion of this two-part interview, Jonathan Finkelstein discusses the future of postsecondary credentialing and how increased granularity is a necessary step for learners, institutions and employers. 

The EvoLLLution (Evo): How do you expect the definition of a valuable credential to evolve over time?  

Jonathan Finkelstein (JF): We are accustomed to thinking of credentials at a very high level. For example, census data asks respondents for the highest level of education they’ve completed. One of the reasons we have traditionally operated at that level is because we haven’t had the tools to record data on a more useful level. Think about what used to be involved in recording grades: individual faculty members had to pencil in grades for each student, then go to central offices to enter them into a student record. There was a lot of administration involved.

Now, we can manage most of our assessments using online tools that can capture more granularity in terms of data, which allows us to represent more outcomes. As a result, we don’t need to rely on the convenient proxies of the past. We can focus on the denomination that is most appropriate at a given time in somebody’s life.

This is enabling employers to take a skills-based approach to hiring. We’re going to look less at individual credentials and more at the interplay between credentials that have more value together: for example, by looking at a prospective employee’s skill set as a combination of the strengths brought by their college degree and their experience at a coding boot-camp.

The advent of skills-based hiring has the potential to clarify what really matters for a given career pathway. This has applications for whole host of issues, from addressing equity and diversity gaps in high growth fields to enabling faster, cheaper alternatives to skills development and training. In other words, if we can get away from only looking at things that we have traditionally measured—completion of programs or degrees—and focus instead on actual skills, doing so in a way that’s agnostic to the size and context of the achievement, we can widen the universe of people who have something to offer in the labor market while still valuing the skills that colleges and universities have been known to cultivate and engender.

Evo: Do you anticipate that these alternative approaches to skills development and verification will complement or replace traditional education?

JF: Over time, we’re going to see the distinction between “traditional” and “alternative” credentials become extinct. Just as we’ve begun to stop talking about the “traditional” college student, we’re going to drop terms like “alternative credentials” or “digital badges” as opposed to degrees. We’re going to think more in terms of the outcomes that students have gathered across different contexts.

Historically, we’ve had boundaries between postsecondary and workforce learning because these institutions have had different missions and systems, but there have always been opportunities for collaboration. Apprenticeship programs are one example. The ability to bring performance-based tools into the workplace to track learning and outcomes is generating a lot of interest with employers who are issuing credentials, both for the completion of training and based on performance—that is, people who have been on project teams, and are evaluated based on their work-specific abilities like marketing or coding. In this sense, employers are becoming more like colleges and universities because they’re issuing credentials, and this is blurring the lines around what’s “alternative” and what’s “traditional.”

At its core, even the venerable college transcript is a bundle of individual credentials. We are used to presenting it as a one-off outcome, but colleges and universities are starting to recognize that a degree is a single denomination of currency, and they need to know how to make change for it. If the degree is a $100 bill, how do we show the nickels, the dimes, and the dollars that make it up? It’s not about a degree versus a credential. It’s about showing all of an individual’s skills and outcomes that comprise the full product.

We traditionally hear colleges and universities ask, “if we issue digital credentials or badges for work on campus, will employers accept them?” Increasingly, I’ve been hearing employers ask the same question: “If we issue digital badges, will colleges accept them?” If we are truly getting to the level of currency—of skills that matter in both of these different settings—then credentials should be able to move in both directions.

We are working with groups like the American Council on Education (ACE) and the Lumina Foundation to design and launch a new type of “transcript” that will act as a human- and machine-readable record of on-the-job skills that can be easily shared back with colleges and universities for academic credit.

Colleges and universities recognize that most of their learners today are adults with work experience that should be recognized and honored. Administrators and faculty would do themselves a service if they didn’t require every piece of knowledge to have been learned on a campus. Institutions that pay closer attention to how they can respect the skills that people already have are going to set themselves up for greater growth and success than those who think only of skills that were taught on campus.

Progressive institutions are tackling this: They’re thinking about their educational offerings as a product, not just a service. Just as any organization that offers products has to think about the next version of their product and how it fits in the market, so too do colleges and universities have to judge their product’s relevancy. To do this, they’re looking at labor market data and the needs of regional employers to figure out what kinds of programs to offer. This includes asking what kind of subject-matter expertise is needed in order to scale up and connect people to employment—and, more broadly, to fulfilling lives.

The other part of this process involves thinking about the format. What should we deliver online, in person, asynchronously, synchronously? What are the product’s outcomes? Is the right format a degree? A certificate program? A subscription model? What are the components of the product and how it is delivered?

Credentialing, since it represents the final point of delivery, is such a critical part of that discussion. It’s the signal that you want the student to walk away with and share with the world, so you have to start thinking creatively about what that signal should be, how granular it should be, and what’s required for it to have maximal value.

It’s an interesting paradox. At its core, higher education believes that the credential is about far more than the end product of the degree, yet it can be incredibly resistant to articulating the standalone value of a degree’s component parts. At its heart, this is a story about having the conviction to know that what provides value in higher education isn’t just the overall bundle but also those constituent parts. If you think about it that way, you can set yourself up as an institution that can have a longer-term relationship with individuals beyond the degree.

We’re already seeing this in places like Brandman University, which doesn’t have a time-based approach to learning. They tell students to take all the time they need to progress, but if they finish earlier they pay less for the same skills that employers are asking for. They aren’t making students work on the institution’s schedule. Rather, they’re providing students with the resources and knowledge they need to demonstrate skills at their own pace.

The biggest roadblock to this is a lack of confidence within institutions about the value of what they provide. That is not entirely represented in a single-format product.

Evo: Is there anything you’d like to add about how valuable credentials are evolving and what it’s going to take for postsecondary institutions to remain part of the conversation?

JF: A credential is a form of currency, and in order to be a currency it needs to have relevance to both the buyer and the seller. Colleges, universities, employers—anyone who’s issuing or consuming credentials—needs to have a level of transparency and understanding when presented with somebody trying to transact with evidence of their skills or their abilities.

Credentials should be a currency on a national and international scale. At Credly, we work with organizations that can issue millions of credentials in any given year. We’re talking about tens of millions of data points, and the reason they’re so popular is because they’re valued in the marketplace.

Large international groups can operate at scale to issue credentials because they know what large segments of the labour market need. At the same time, there are regional stories, like the Colorado Community College System, which asked a couple dozen advanced manufacturers in the state what credentials they needed to fill 15,000 unfilled jobs. When the employers and the college started speaking the same language, they began issuing credentials that had relevancy to both sides of the equation. This allowed them to search for and match people to the jobs they needed in a much more efficient way. Rather than waiting 10 months to fill a position, an employer in Colorado can fill it in two or three days.

As we move forward, these credentials—and by extension this data, that’s portable and owned by the individual—will give industries that haven’t typically worked together smoothly a greater ability to transact, collaborate, and create new kinds of pathways. A lot of boundaries are being blurred in really positive ways. We’re no longer forcing people to make choices about having to learn in one place or another. Now, we’re able to combine experiences in useful ways.

This interview has been edited for length and clarity. Click here to read Part One of this interview.

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Key Takeaways

  • Just as the difference between traditional and non-traditional students are no longer broadly recognized, the distinction between microcredentials, digital badges and degrees will likely erode into a single category: credentials.
  • By taking a skills-based approach to hiring, employers will be looking at the experience and knowledge that a prospective hire brings from all facets of their lives—not just what they learned in the classroom. Credentials that accommodate “life-wide” learning will be most valuable for job-seekers in the years to come.
  • The value of a degree lies in its component parts. Being able to break those individual courses and skills out from a degree format will give them greater relevancy in the skills-based job market.