The growing importance of non-degree credentials

As the pace of technological change accelerates, companies need employees possessing the most current skillsets, the most aptitude and appetite for continual learning, and an ability to adjust quickly as market conditions shift. The result is a global trend of employers considering alternative credentials in addition to – or even instead of – four-year-bachelor’s degrees for certain positions. A recent Northeastern University whitepaper entitled Educational Credentials Come of Age is one of several high-profile studies finding that companies are increasingly employing skills- or competency-based hiring. The report explains that, “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.” The Northeastern University survey was conducted among 750 human resource officers at leading US employers and found that “a majority of HR leaders reported having either a formal effort to de-emphasise degrees and prioritise skills underway (23%) or actively exploring and considering this direction (39%).” In addition, the survey found that “61% of HR leaders believed that online credentials are of generally equal quality to those completed in-person,” a finding that indicates a massive shift in the perception of the value of online learning in just a few short years. The steady growth of enrolments in MOOCs, as well as the increasing number of fee-based MOOCs and MOOC-delivered degrees, offers one illustration of the growing acceptance of online learning. Last year, total enrolments in MOOCs passed the 100 million mark to reach 101 million learners worldwide.

Largest multinationals drop degree requirement

It isn’t only employers in the US that are looking past degree requirements. Global companies such as accountancy firm Ernst & Young, PriceWaterhouseCoopers (PwC), and Penguin Random House Publishers have abandoned policies of requiring certain academic scores or degrees from candidates applying for positions with them. When announcing the decision to base hiring on a wider set of factors in 2015, Maggie Stilwell, Ernst & Young’s managing partner for talent at the time, explained:

"Our own internal research of over 400 graduates found that screening students based on academic performance alone was too blunt an approach to recruitment. It found no evidence to conclude that previous success in higher education correlated with future success in subsequent professional qualifications undertaken."

Other massive companies that no longer require candidates to have a four-year degree include Google, Apple, Starbucks, and IBM. IBM’s vice president of talent Joanna Daley told CNBC in 2017 that roughly 15% of IBM’s US employees did not have a four-year degree. She said IBM is as interested in candidates who had “hands-on experience via a coding boot camp or an industry-related vocational class” as in degree-holders.

Higher education shifting

The practice of “embedding” industry credentials into degrees has been happening at US community colleges – which have historically defined themselves by offering specific and vocationally oriented skills, in contrast to four-year universities ¬– for some time. “Embedding” refers to a college’s acceptance of a student’s short-term industry certificates as a building block towards a degree. But four-year colleges have been slower to consider the practice. A 2017 study among 149 US colleges and four-year institutions by the Lumina Foundation found that,

“More than two-thirds of respondents from four-year colleges said embedding wasn't ‘relevant’ to their work, and half said they were too narrow or skills-based to be useful to students.”

In contrast, she said, “None of the respondents from community colleges said embedding was irrelevant.” But as we know, the needle is moving quickly when it comes to higher education delivery models and programming, and in the two years since the Lumina study, universities have begun to experiment with competency-based credentials and short courses (increasingly known as “micro-credentials”), which often result in certificates or badges. Some are further along in weaving in new credentials to their operations. For example, there is the University Learning Store, where students can “learn new skills and earn credentials from top universities.” The University Learning Store was developed and is delivered by Georgia Institute of Technology, UCLA Extension, University of Wisconsin Extended Campus, UC Davis Continuing Education, University of Wisconsin Continuum College, and UCI Extension. Note the sub-brands now attached to these major universities; in and of themselves, these illustrate the institutions’ recognition of how crucial it is to offer alternative credentials and shorter courses to encourage a wider range of students to enrol with them. The project was developed in close consultation with industry. This is how the “store” works:

“To earn a credential, you will demonstrate your knowledge by passing assessments. Many of these will be hands-on, skills-based projects that resemble real-world business scenarios. All credentials have been verified by employers to ensure they are representative of the competencies (skills and knowledge) required in today’s workplaces.”

Students can buy courses and take an assessment to earn a badge for US$25-US$150 with a three- to 30-hour investment. Further widening its market, the University Learning School also allows employers to buy employees or even whole teams courses that allow them to keep learning and earning skills badges.

Micro-internships

In recognition of the increasing priority that employers place on hiring candidates with proven work experience, platforms such as Parker Dewey provide micro-internships to companies, college students, and employers. Employers using the platform can access on-demand help for specific projects, students can gain skills and work experience while getting paid, and universities can tell prospective students they have the ability to connect education to real-world work. Micro-internships can range from five hours of students’ time to 40 hours. It takes five minutes to set up an account. Riipen is a similar platform, and this is a market space where an increasing array of options is bound to develop.

The future is now

As employers become less rigid in terms of evaluating graduates’ credentials and more interested in up-to-the-minute skills and work experience, the baseline of a bachelor’s (or a bachelor’s plus master’s or MBA) serving to demonstrate job-readiness is no longer a given. Degree qualifications remain relevant, but they are increasingly less likely to be enough in and of themselves. The aforementioned Lumina research found that “a majority of HR leaders (64%) believe that in the future, the need for continuous lifelong learning will demand higher levels of education and more credentials.” That was two years ago. The two-thirds of respondents who agreed that lifelong learning is the new necessity for employees would almost certainly be higher still now. As Northeastern University’s Sean Gallagher writes,

“Thinking about microcredential offerings only as shorter online educational programmes would miss the broader, more significant trends that they exemplify. First, the growth of microcredentials is evidence of the emergence of more continuous and less episodic post-secondary learning. Second, microcredentials highlight an educational curriculum that is much more industry-aligned and competency-focused. Finally, they demonstrate that we are entering an era with much greater overlap and integration between education and experience.”

For more information, please see:

• “Study tracks the increasing popularity of alternate credentials”
• “The year in MOOCs: Increased revenues and more degrees”
• “New university rankings put the focus on employability”