The Growing Profile of Non-Degree Credentials: Diving Deeper into ‘Education Credentials Come of Age’Sean Gallagher | Executive Director of the Center for the Future of Higher Education and Talent Strategy, Northeastern University
The world of credentialing is changing fast. Employer needs have evolved in concert with improving hiring support technologies. Higher education institutions are now in a difficult position, responding to changing employer and student demands for credentials that signal job readiness. In Educational Credentials Come of Age, Sean Gallagher shares the results of a comprehensive study on the progress and growth of non-degree credentials when it comes to supporting employability. In this interview, he expands on some of those findings.
The EvoLLLution (Evo): In your survey, nearly half (48 percent) of respondents said the value they place in educational credentials for hiring has grown over the past five years, while 29 percent saw no change and only 23 percent saw a decline in their value. What are some trends that you believe are contributing to this spike?
Sean Gallagher (SG): The growth in value for educational credentials is closely tied to the evolution of the job market and knowledge work. We asked employers who had increased the level of education they preferred for the same job roles why they did so. For example, consider a technician job that years ago demanded an associate degree but is today classified as a bachelor’s level role. A strong majority attributed the shift to the fact that the actual skills needed for these jobs evolved upward.
Job market growth has been concentrated in the occupations that are most reliant on higher levels of education and training. In addition, 64 percent of the HR leaders we surveyed said that the need for ongoing lifelong learning will demand higher levels of education and more credentials in the future. Even for entry-level and lower skill jobs, the expectation is increasingly that candidates are pursuing education and training to keep up with developments in the field, and can present specialized credentials.
This does not mean that everyone will need a bachelor’s degree—but that some form of postsecondary education is increasingly the norm, and that it will be less episodic and more continuous across a career.
Evo: How concerned are you about the finding that 44 percent of employers require higher levels of education for jobs than they did five years ago?
SG: Most employers are for-profit businesses. Even in the public sector or non-profit world, they are generally accountable to market forces and seek to make the most of their resources. Employers are rational actors in terms of what they’re demanding. The job market is dynamic, and full of robust feedback mechanisms—so I think it is notable that there is such a solid and continued salary premium that employers pay (and that economists can document) for better-educated workers. Generally, demanding and paying for higher levels of education reflects a shift in the true requirements for doing the job.
That said, employers are not as rigorous or data-driven about their setting of educational qualifications compared to what we might assume, and only 15 to 20 percent are applying advanced analytics to their hiring process and setting job qualifications. So I appreciate critics of higher education who warn about credential inflation, which is a real concern.
This is why the shift toward skills- or competency-based hiring (which is being considered or deployed by a majority of employers, one of the encouraging surprises in our survey results) is so significant. Due to the tight job market and also strategic, equity- and diversity-related reasons, many employers are expanding their talent pipeline and being careful not to blindly rely on degrees in their hiring process. Today’s new technology also facilitates this. Using carefully calibrated pre-hire assessments—tests that are directly related to the job and can be completed online by candidates—is another major trend. Employers and society also need to find ways to document, credential, and recognize informal learning and development—much of which happens on the job—versus relying on the formal credentials issued only by postsecondary institutions.
Evo: With the increased demand for credentials, what advice would you share with postsecondary leaders struggling to maintain their institution’s relevance in a turbulent and competitive market?
SG: Whether you are measuring based on participation rates for individuals, or employers’ expectations and what’s rewarded in the job market, we are at the beginning of what I would call a golden age for lifelong learning and “non-credit” or informal professional learning. However, this market has become substantially more competitive and commoditized, and much of it is happening online. Colleges and universities no longer have a monopoly on being the preferred content creator and distributor and credentialer. For free or at a very low cost, individuals can access MOOCs, YouTube, and various commercial providers, and come away with valuable skills. This is a good thing for learners. Yet, the market still highly values the credentials and courses produced by higher education institutions. The brands, quality assurance, curriculum, faculty and assessment expertise that colleges and universities possess still put them in a great position to compete—but competing effectively today means being much more nimble and market-oriented.
Evo: Given your findings about the enduring value of skills over formal credentials, what are some changes postsecondary institutions can make to ensure students are armed with—and can prove—both?
SG: The hiring process is fundamentally about competency and choosing the ideal candidate to perform the job and deliver results, so education and work experience are intertwined as signals of ability.
One of the first levels of opportunity is simply embedding the skills that are demanded in the job market into educational programs. Education certainly has its own merits independent of professional outcomes. But critics of higher education who suggest graduates aren’t prepared for the workforce have a point in terms of the opportunity for greater job market alignment, and less of an “ivory tower” mentality at many institutions. Importantly, this does not mean that there isn’t value in the liberal arts and in broader ways of thinking—problem solving, leadership, critical thinking, analysis, and writing are among the very top skills demanded by employers across all educational levels. These are foundational and independent of technical skills.
The second opportunity is building an ecosystem for better documentation and sharing of skills—in a sense what investor Ryan Craig has termed a “competency marketplace.” Employers’ reliance on college degrees as relatively blunt signals of skill and ability is partly driven by the fact that there aren’t many strong alternatives. Technology—and the growth of platforms like LinkedIn, ePortfolios and online assessments—is changing the game. One example is digital badges, which were originally often positioned as substitutes to degrees or certificates.
Instead, I believe digital badges are a supplement to degrees and we’re increasingly seeing badges—short microcredentials that discretely and digitally document competency—woven into degree programs, from the community college to the graduate degree level.
A third opportunity is experiential or work-based learning. The educational process, and the earning of a postsecondary credential, does not have to be a trade-off between classroom (or online) education and work experience. Instead, a learner can gain both through a program that integrates theory and practice and includes real-world experience. Examples of this include the cooperative education programs at institutions such as Northeastern and the University of Waterloo, the inclusion of applied capstone projects in earning degrees, internships, and the growing interest in new forms of apprenticeship, among many others. This is an area of great interest that we’re continuing to study and track closely—and it also intersects with the idea that credentials can result from work experiences and skills, which is a central concept in competency-based education.
Evo: Focusing on the postsecondary institutions, what do you think would be some of the roadblocks standing in the way of strategically unbundling programming to increase access to critical knowledge and skills education for lifelong learners?
SG: Higher education institutions and their departments and programs are structured around academic disciplines and large-scale programs. This is also true of the accreditation and regulatory process, and most university governance processes. The system is built around large bodies of work. Thus, fragmenting and atomizing that into smaller products, projects, and activities is a natural challenge, culturally and operationally. However, it is becoming increasingly clear that the market is demanding more “agile” and shorter-form approaches to education. Many institutions are making this a strategic priority, especially as we read the evolution of trends in the global job market and soon enter the 2020s.
Online education—which in all its forms continues to slowly and steadily grow its market share in terms of all higher ed instruction—is certainly an enabler of this vision, given what we know about pedagogy and the ability to digitally document outcomes.