February 01, 2017 | By Sean Gallagher
NACE Journal, February 2017
The market relevance and future competitiveness of one of higher education’s core products—academic credentials—has become a central topic over the last few years. The increasingly visible term “credential” importantly invokes the job market role of the degrees, certificates, and other academic awards that colleges issue. References to “credentials” can be found topping countless conference programs and board meeting agendas, and in connection with scores of start-up firms that seek to partner with colleges for career-oriented services or, in other cases, “disrupt” the education market and the monopoly-like role of the degree as a hiring qualification. The centrality of higher education credentials in job attainment is at the forefront of the national higher education policy discussion, and features prominently in the mission statements and motivating goals of leading multi-billion-dollar higher education foundations.
Today’s higher education landscape is certainly characterized by an increased focus on career outcomes and employability. Meanwhile, the corporate world finds itself in a war for college-educated talent, due to a very strong professional job market in which job openings are at all-time highs, and the national unemployment rate sits at just 2.3 percent for individuals with a bachelor’s degree or above.1 A recent study from Georgetown University’s Center on Education and the Workforce found that 99 percent of the 12 million net new jobs created since The Great Recession went to college graduates.2 Additionally, within the growing ecosystem of firms that straddle private industry and academia, professional and career-oriented companies—many focused on credentialing technologies and alternatives—are one of the hottest market segments, attracting hundreds of millions in venture capital and private equity investment.3
There is no shortage of prognostications about the future of higher education. Higher education’s future—and the future of talent acquisition strategies that rely on it—arguably hinges on the ways that employers and higher education institutions interact and collaborate to meet their shared interests, particularly with respect to how academic credentials operate in the job market. I have dedicated my academic research over the last three years to the questions at this intersection, based on conversations with hundreds of employers, extensive review of the academic literature, and the analysis of countless datasets. A clear agenda for college-employer collaboration emerges from this study—and these issues are increasingly crucial as they escalate to the corporate C-suite, the center of national and state-level policy debates, and as the crux of hundreds of billions of dollars in annual investment by consumers and employers in college tuition, hiring, and training.
The future of higher education, corporate learning and development, and professional credentialing is shaping up as a battle of speed and relevance in a fast-changing, technically oriented job market. Nimble “non-institutional providers” of education—such as standalone online learning firms, training companies, microlearning upstarts, and even professional associations—represent an emerging threat to educational institutions as they develop targeted offerings to address skills gaps, especially in domains such as computer science, analytics, and business.
Colleges’ engagement with the employer community in curriculum development has historically often been via structures such as advisory boards, which are certainly useful and fairly common. Yet, today’s job market demands more continuous input into curriculum from the employer community—and a willingness among academics to embrace a greater role for employers in program and curriculum design. This requires college leaders to lead a cultural and philosophical shift on their campuses—and to adapt some of their fundamental assumptions and processes related to new program development, degree program approval, and assessment. The future opportunity is for employers to play a more significant role in shaping, tuning, and even certifying college courses and programs.
The growing integration of professional standards and credentials into degree programs is an important example of the convergence of employer needs and university programming in the marketplace. In the fast-growing project management field, for instance, the Project Management Institute (PMI) has long maintained an accreditation process that links the standards for its credentials such as the project management professional (PMP) with college and university programs.4 The financial sector features other examples of this convergence, in areas ranging from financial analysis (CFA) to accounting (CPA). These types of alignments have been natural in occupational domains where professional/industry certifications are well established as complements to the degree. As the boundaries between professional certification and higher education continue to blur, similar alignments can be expected in fields as diverse as healthcare, engineering, and design, among others.
Employers should also begin to consider and prepare for a future in which they may emerge as more central arbiters of higher education quality—active participants in some of the new, more transparent and outcomes-focused means of higher education quality assurance that are now arising. This opportunity is being shaped by government policy, experimental partnerships, and the development of online marketplaces that track skills and competencies. For example, traditional higher education accreditation processes—while still the gold standard in higher education quality—are under fire, with particular scrutiny from Congress. This scrutiny has been amplified by growing student debt levels and the failure of for-profit institutions. The U.S. Department of Education’s new Educational Quality through Innovation Partnerships (EQUIP) initiative is an example of a high-profile national effort to experiment with developing new forms of quality assurance entities in a highly outcomes-oriented and professionally focused way.5 Similarly, it is worth noting that the growing use of graduate salary data in college rankings represents an alignment of employers’ assignment of value to credentials and skills in the job market with the consumer market for higher education. Platforms such as LinkedIn are likewise capturing value and providing new insights and levels of transparency with respect to individuals’ educational and career paths and outcomes.
College-issued credentials’ derive their utility and status as key hiring qualifications due to the skills and competencies that they represent and their utility as signals of ability. Appropriately, much of the dialogue at the intersection of higher education and hiring revolves around what skills and competencies are demanded of college graduates. According to NACE’s Job Outlook 2016 survey, these are attributes such as leadership, teamwork, communication, and problem solving skills.6This is confirmed by other sources such as data-rich real time labor market systems such as Burning Glass and EMSI, which look across millions of job postings and also reveal the specialized and technical skills that are in greatest demand, such as Microsoft Excel, project management, and programming and scripting languages SQL, Java, and Python. In a polarized debate that commonly pits professional and technical education against the broader aims of education, it is interesting to note that the skills at the heart of liberal arts education—such as critical thinking and writing—are among the most valued by employers, and among the hardest to find in combination with technical skills.
A stronger match between the graduates produced by colleges and universities and the skills that employers demand can be realized through the embrace of competency-based approaches on both the education and employment sides of the equation. Over the last few years, “competency-based education” has developed as a significant trend within higher education, with reports that hundreds of institutions are developing competency-based programs and due to a number of catalytic investments and policy shifts from government and other entities.7
However, the “competency-based education” that most in academia may be aware of is the notion of academic progress and credentialing via the demonstration of skill as an alternative to classroom seat time—a particularly useful model for working adults, but not as relevant for traditional undergraduates. However, competency-based education can be thought of more broadly as the explicit alignment of educational outcomes with certain discrete professional competencies—a philosophy that is unquestionably valuable, and where the future of professionally oriented education lies. Clearly articulated learning outcomes and clear mapping to the job market are strangely absent from many colleges’ approaches to curriculum and program design.8
Meanwhile, among HR leaders and hiring managers, competency-based hiring—often taken for granted—is a major direction and area of current emphasis, especially as recruiting processes are aided by technological tools. According to the Society for Human Resource Management (SHRM) and based on my own research, many employers are engaging in more detailed analysis and harmonization of job descriptions, developing new interviewing protocols, deploying pre-hire assessments, and retraining managers to make interviewing and hiring more focused on ascertaining ability versus being based on gut decisions.9
As these two trends converge—one in academia, and one in the job market—it is critical that employers and educators speak the same language and proactively develop some type of Rosetta stone for competencies. This alignment will increasingly be enabled by the proliferation of employee performance and learning outcomes data, and our ability to analyze it at a large scale.
Both higher education institutions and employers have important work ahead in delineating what level and type of educational credential is desired for particular job roles. This is especially true in a marketplace that is seeing an explosion of experimental “alternative credentials” beyond degrees, in the form of certificates, “microdegrees,” and badges. This need is also driven by the fact that self-driven professional development, lifelong learning, and the attainment of graduate education have become much more common. Over the last decade, master’s degree enrollment has grown 35 percent, and 75 percent of entering college freshmen report that they intend to earn an advanced degree.10
When and why is a given level of degree required or preferred for a job role? At many employing organizations, answering this question is difficult, even for hiring specialists, and even with respect to the traditional degree constructs that have existed for decades.11 Working together, employers—armed with performance data and competency-focused analyses—and educators are now in a better position to map job demands to educational requirements. Back in 2011, for example, the Lumina Foundation developed the Degree Qualifications Profile (DQP), an effort to create general standards and consistency with respect to the competencies expected in degrees at various levels, such as the difference in specialized knowledge present in a bachelor’s versus a master’s degree.12Distinctions between educational qualification levels are not only key to job attainment and economic mobility—but they also drive the starting salaries, costs, and premiums associated with a given level of education in the market, an area of crucial and continuous interest to students, universities, and employers.
If 2012 was known as “The Year of the MOOC”—as christened in the title of a widely cited New York Times article—2016 may go down in history as “The Year of the Microcredential.”13 Over just the last two years, various technology vendors and colleges and universities have introduced many new short-form credential programs—often professionally focused and delivered online. Seen as more focused and affordable than degrees, these credentials go by names—a number of them trademarked—such as nanodegrees, micromasters, microdegrees, badges, and verified certificates.14 This growing category of microcredentials has attracted considerable attention from higher education leaders.15 The leading firms behind the microcredentialing movement include well-capitalized start-ups such as Coursera, EdX, and Udacity, which have associated themselves with some of higher education’s and industry’s most elite brands. These microcredentialing suppliers and others have been vocal and active champions of these potentially disruptive professional credentials.
However, on the “demand” side led by employers and consumers, the appetite for and ultimate place of microcredentials is less certain. HR and hiring managers will increasingly be coming across microcredentials on resumes. The microcredentialing trend therefore requires more active discussion, study, and analysis. This is especially important as many vendors and educators are making claims or assumptions about microcredentials’ potential, with little engagement or measurement in the real world of recruiting and hiring. How do we sort through these competing terminologies and constructs in a world where the long-established certifications, certificates, and online degrees held by experienced talent are still being interpreted in novel ways? It is also worth noting that in the years to come, many new college graduates will be completing their studies not only with initial bachelor’s degrees, but also with a host of accompanying certifications, badges, and micro-level markers of competency. For the microcredential market to take off—which would be a boon to both employers and consumers in terms of greater efficiency and better access to jobs—the ecosystem must wrestle with fundamental issues related to semantics, comparability, reputation and brand, quality, and even educational verification and equal opportunity issues.
The momentum for microcredentialing also highlights the need to consider how we assess, document, and value educational or professional “credentials” relative to employees’ and students’ new ability to access and curate learning experiences and skills from multiple, often non-institutional, sources. HR and university leaders should be both excited and cautious about the fact that in today’s online marketplace, the boundaries are rapidly blurring between the attainment of skills and educational credentials from accredited institutions and from a combination of outside organizations and internal training. Talent expert Josh Bersin points out that with the proliferation of online learning content, a new market of “learning experience software” is developing. In today’s landscape, various systems are helping employees and employers to discover content and build individualized learning paths or curated “academies.”16 Companies such as LinkedIn, Degreed, Credly, Parchment, and a number of others are building entire businesses around the curation and documentation of competencies and credentials, which range from MOOCs and workshops to college courses and internal trainings. Career-focused educators and talent professionals will have a major role to play in shaping and defining the technologies, standards, and practices in this landscape—some of which may drive thought-leading employers themselves to emerge as credentials in their own right.
As higher education becomes more tightly interwoven with the world of work, interest in experiential or work-integrated learning is growing. In the annual national tracking polls of employers conducted by my institution, Northeastern University, we have found that more than 95 percent are interested in educational models that integrate work and study.17The model is also certainly increasingly popular among students. According to NACE’s data, in 2015, 65 percent of graduating bachelor’s degree students participated in a co-op or internship, an all-time high.18Indeed, experiential learning has historically been associated with internships and cooperative education programs at institutions such as Northeastern and others around the world, from the University of Waterloo in Canada, to Kyoto Sangyo University in Japan, and RMIT University in Australia. Yet, experiential learning—often associated with the institutions and programs that embrace it in their core structure—represents a broader spectrum of approaches that also includes service learning, applied research, and work-based projects.
In the new age of credentialing, experiential learning is appearing across a much wider range of academic programs and courses—often in the form of applied projects. The highly professional and technical focus of many new credential programs—think analytics, software and mobile development, and so forth—lends itself to and even prefers real-world exercises and capstone-type projects. Increasingly, credentials not only document the completion of an educational process, but also a work product. For example, the new credentials and certificates being offered by upstart providers from Coursera to Udacity often have applied projects as a hallmark. Moreover, in November 2016, Udacity captured attention when it announced “Blitz,” a new business model and service that connects its software development program alumni with employers for short-term online project work. At Northeastern, we have over the last few years built a model called the Experiential Network (“XN”), which has integrated more than 600 short-term online experiential projects from more than 500 sponsors into our educational programs. The growth of the much-heralded online “gig economy” will create new opportunities to align the capacity, talent, and interests of professionally-oriented students with employers who are interested in augmenting their capacity and test-driving talent.
The more experiential and project-based nature of the higher education of tomorrow raises a number of issues and opportunities. At a basic level, for higher education institutions to embrace this approach, they need to draw on significant ongoing involvement and participation of employers in the learning process. Across the millions of experiential opportunities that are provided to students worldwide each year, these are more often managed at the level of individual managers and employees than representing enterprise-wide strategies. As projects and real-world work become more modularly integrated into educational experiences, employers and academics together will need to establish protocols for sourcing, matching, and evaluating projects, and what types of technology systems will enable or document them.
These are truly exciting times for those with an interest in the intersection of higher education and talent strategy. We are still early in an age of digitally fueled innovation in academic programming and optimizing the utility of academic credentials as hiring qualifications. If history is any guide, many of the developments percolating today will take another five to 10 years to achieve critical mass—and the success of these new opportunities will depend on closer cooperation between colleges and employers, as well as innovation not only in a technological sense, but in terms of cultural change.
1 U.S. Bureau of Labor Statistics, November 2016 http://www.bls.gov/news.release/empsit.t04.htm
2 Georgetown Center for Education and the Workforce, America’s Divided Recovery. Washington, D.C.: 2016 https://cew.georgetown.edu/cew-reports/americas-divided-recovery/
3 Chris Mohr and Ryan Craig, “Who’s Playing Matchmaker Between Students and Employers?,” EdSurge, July 29, 2016 https://www.edsurge.com/news/2016-07-29-who-s-playing-matchmaker-between-students-and-employers
4 Global Accreditation Center for Project Management, https://www.pmi.org/global-accreditation-center
5 U.S. Department of Education EQUIP Fact Sheet, https://www.ed.gov/news/press-releases/fact-sheet-ed-launches-initiative-low-income-students-access-new-generation-higher-education-providers
6 NACE, Job Outlook Survey 2016. Bethlehem, PA: November 2015, http://www.naceweb.org/s11182015/employers-look-for-in-new-hires.aspx
7 Robert Kelchen, The Landscape of Competency-Based Education: Enrollments, Demographics, and Affordability. Washington, D.C.: American Enterprise Institute, January 2015 https://www.luminafoundation.org/files/resources/competency-based-education-landscape.pdf
8 Colleen Flaherty, “Who Decides What Must Be on a Syllabus,” Inside Higher Ed, August 8, 2016, https://www.insidehighered.com/news/2016/08/08/should-professor-lose-his-job-over-refusing-put-learning-outcome-his-course-syllabus
9 Lee Michael Katz, “Competencies Hold the Key to Better Hiring,” HR Magazine, January 29, 2015 https://www.shrm.org/hr-today/news/hr-magazine/pages/0315-competencies-hiring.aspx
10 U.S. Department of Education National Center for Education Statistics, “Percentage of persons 25 to 29 years old with selected levels of educational attainment…,” https://nces.ed.gov/programs/digest/d15/tables/dt15_104.20.asp; Kevin Eagan, Ellen Bara Stolzenberg, Abigail Bates, Melissa Aragon, Melissa Ramirez Suchard, & Cecilia Rios-Aguilar (2015). The American freshman: National norms fall 2015. Los Angeles, CA: Higher Education Research Institute, UCLA, http://www.heri.ucla.edu/monographs/TheAmericanFreshman2015.pdf
11 Rynes and Boudreau, “College Recruiting,” 729–757; John Storey and Keith Sisson, Managing Human Resources and Industrial Relations (Buckingham, UK: Open University Press, 1993).
12 The Degree Qualifications Profile, The Lumina Foundation (2011), https://www.luminafoundation.org/files/resources/dqp.pdf
13 Laura Pappano, “The Year of the MOOC,” The New York Times, November 2, 2012, http://www.nytimes.com/2012/11/04/education/edlife/massive-open-online-courses-are-multiplying-at-a-rapid-pace.html
14 Jeffrey R. Young, “Why Udacity and EdX Want to Trademark the Degrees of the Future—and What’s at Stake for Students,” EdSurge, November 3, 2016, https://www.edsurge.com/news/2016-11-03-why-udacity-and-edx-want-to-trademark-the-degrees-of-the-future-and-what-s-at-stake-for-students
15 “The Credentials Craze,” The Chronicle of Higher Education, http://www.chronicle.com/specialreport/Next-The-Credentials-Craze/2
16 Josh Bersin, “Viewpoint: The Corporate Learning Technology Market Takes a Turn,” Society for Human Resource Management, November 21, 2016, https://www.shrm.org/resourcesandtools/hr-topics/technology/pages/viewpoint-the-corporate-learning-technology-market-takes-a-turn.aspx
17 Northeastern University and FTI Consulting, “Innovation Imperative: Enhancing the Talent Pipeline” (Survey Results), http://www.northeastern.edu/innovationimperative/pdfs/Pipeline_toplines.pdf
18 NACE, “Percentage of Students with Internship Experience Climbs,” October 7, 2015, http://www.naceweb.org/s10072015/internship-co-op-student-survey.aspx
Sean Gallagher, Ed. D., is executive director of the Center for the Future of Higher Education and Talent Strategy at Northeastern University and author of The Future of University Credentials: New Developments at the Intersection of Higher Education and Hiring, published in September 2016 by Harvard Education Press.
A frequent presenter at conferences and events, Gallagher’s writing and commentary have been featured in leading media outlets such as The Chronicle of Higher Education, Wall Street Journal, and Forbes. He earned his doctorate in higher education administration as well as his bachelor’s degree from Northeastern University. He holds an M.B.A. from New York Institute of Technology.
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