Are employers recognising alternative credentials in hiring decisions?

Despite continuing interest in the idea of alternative qualifications such as microcredentials, digital badges, and industry-recognised certificates, the verdict is still out on how much return on investment these credentials provide to students and how compelling they are for employers with hiring needs.

A refresher

The research article, “A strategic reset: microcredentials for higher education leaders,” published by Rory McGreal and Don Olcott Jr. in February 2022, provides a comprehensive explanation of the current scope of alternative credentials (commonly known as microcredentials):

“Microcredentials are certified documents that provide recognised proofs of the achievement of learning outcomes from shorter, less duration, educational or training activities. They focus on the validation of competency-based skills, outcomes and/or knowledge using transparent standards and reliable assessments, which can enhance graduates’ employability prospects. A microcredential can be accepted for credit by an institution or organization or be an attestation for employers. A microcredential attests to specific knowledge or skills competencies with defined learning outcomes and may or may not be stacked towards larger units of accreditation.

For the most part, microcredentials exist outside the formal qualifications frameworks of traditional universities and colleges, yet these frameworks provide formal guidance, because learners will want microcredentials to be transparent and applicable to formal credentials. They may or may not be stackable or combinable towards higher qualifications, and in some cases may be accepted into formal certificate and/or degree credit programmes.”

It's interesting to note the number of times “may or may not” is used in the description above – there is a huge range in play as to what a microcredential is, how it might be perceived, and how it might be integrated into other programmes.

The concept makes sense

In theory, microcredentials are tailor-made for contemporary economies, employers, and job candidates. They take less time to obtain and are often more affordable than degree programmes, and they are highly specialised and in tune with specific labour market needs. They seem to offer a perfect solution for those employers frustrated when degree-holding job candidates don’t have the up-to-the-minute training or specific skills they urgently require.

Yet there remains a persistent lack of internationally applicable standards and frameworks that would allow the value of particular microcredentials to be easily understood by employers. This absence of a widely accepted foundation for the evaluation of microcredentials appears to be limiting their growth potential and, to some extent at least, confusing students and employers about their worth.

Sean Gallagher, the founder and executive director of Northeastern University’s Center for the Future of Higher Education and Talent Strategy, believes that microcredentials are well-suited for an increasingly digital, rapidly evolving global economy in which “there is a gap between the supply of people in the workforce coming out of university with skills and credentials to fill the gaps employers are looking for.” But at the same time, he has said that for employers to consider microcredentials as a worthy alternative to traditional degrees, they need to see research and proof that employees with microcredentials can be just as, or more, valuable than those with degrees. “That type of data doesn’t exist quite yet,” Gallagher said in an interview with the BBC in 2020 – and we haven’t seen evidence that much has changed.

The OECD concurs, noting (also in 2020) that, “Despite an increasing volume of these new credentials, great uncertainty persists.”

Interest and confusion

In the US, where the number of high school students moving on to pursue tertiary degrees has plummeted over the years of pandemic, there is definitely demand for alternative credentials among both workers and employers.

A 2021 survey by the Society for Human Resource Management (SHRM) among over 500 executives, 1,200 supervisors, 1,129 human resource professionals, and 1,525 workers found that that 45% of US employees said they had an alternative credential; of those who did not, half (49%) had considered the idea.

Even larger proportions agreed that alternative credentials offered return on investment:

“Nearly three-quarters (72%) agree they are an affordable way to gain the skills or experience necessary to enter a new job, and 77% agree that having a job-relevant alternative credential increases or would increase their chances of being hired for a job.”

Enthusiasm was high among employers as well. More than 80% of executives, supervisors, and HR professionals said that “alternative credentials bring value to the workplace.”

However, there was less much less agreement that “workers with alternative credentials are better performers.” A clear majority (70%) of executives agreed with the statement, but agreement dropped to 53% among supervisors and 31% of HR professionals.

SHRM found that “potential barriers to employers' wider recognition of alternative credentials include a lack of systems that can easily identify an individual's skills and talents, standards to recognise non-traditional or untapped talent, as well as employer reluctance to recognise a new way to validate these skills.”

Sean Murphy, director of opportunity at Walmart, said, “SHRM's research clearly shows a demand for credentials, but it also uncovers the need for more transparency in their development and use, as well as a need for setting the standard for quality.”

Of the survey findings, EdSurge concludes,

“The survey and the experiment’s findings show that even though executives say they support alternative credentials, the practices and attitudes of mid-level managers and HR professionals do not always value these upstart certifications.”

The case for microcredentials as a value add

Monique O. Ositelu, a senior policy analyst for New America has told EdSurge that as a stand-alone, microcredentials do not offer the same return on investment as a bachelor’s degree:

“Very short-term programmes of less than a year, they have incremental effects on your earnings. After a while, they actually diminish. Not like a bachelor’s degree, where you keep gaining value.”

However, she points out that the value of obtaining a microcredential rises when it is taken as a supplement, rather than a replacement, for a degree. Someone with both a degree and a microcredential might have a very different experience in a job interview than someone with only a microcredential on their resume.

Looking at microcredential recognition around the world

According to a study by Class Central in 2021, there are currently 1,500 microcredentials on offer on MOOC platforms including Coursera, EdX, Future Learn, and Udacity. More than three-quarters are in business or technology-related fields. There are also microcredentials available from universities, colleges, employers, and private entities.

As for how governments have responded to the emergence of microcredentials, there is considerable variation. The US and Canada do not yet have national qualifications frameworks to accommodate microcredentials, but there is more activity at the national level elsewhere in the world. The “Strategic reset: microcredentials for higher education leaders,” report notes,

“Australia, New Zealand, UK, South Africa, and many other nations have national qualifications frameworks that drive skills and competency credentialing in their respective countries, though it appears these are designed to guide, rather than control microcredential development.”

The report authors consider developments in Europe to be the most ambitious to date in this area. They explain:

“The European MOOC Consortium has developed the Common Microcredential Framework (CMF). It builds on existing systems, and the focus is on formal credential recognition. The CMF adopted a similar set of criteria as that used in the Bologna Process and the European Higher Education Area (EHEA). Microcredentials within the CMF are defined in terms of student learning hours and educational level. The microcredential is based on the results of an included summative evaluation with a reliable method of identification verification at the point of assessment. The transcript must include a statement of the learning outcomes and study hours equivalency.

The European approach to microcredentials is both intriguing and ambitious—to build a common European qualification framework that builds upon many of the EU national qualifications frameworks in one major standard. In many countries, it is a success just to get three universities to work together in the same region. Global university leaders will be watching Europe’s development closely.”

Practical, immediate skills upgrading

For now, perhaps the most valuable application of microcredentials is their ability to provide employers and employees with quick, affordable, “just-in-time” training. Microcredentials might not win an interviewee a position, but they can add to the candidate’s resume and keep workers relevant as their chosen profession/industry evolves. This, in itself, can be viewed as “value” – even if it is not an equivalent value to a degree.

For additional background, please see:

• “New study highlights the expanding landscape of microcredentials”