More Employers Are Awarding Credentials. Is A Parallel Higher Education System Emerging?

As the acceptance of new types of credentials grows, a number of employers have become learning providers in their own right, in a way that could shake up the broader higher education landscape.

A growing number of companies have moved beyond training their own employees or providing tuition assistance programs to send staff members to higher education. Many of these employers are also developing their own curricula and rapidly expanding their publicly-facing credential offerings.

It’s not hard to find prominent examples:

• Google recently announced an expansion of the company’s popular Google Career Certificates portfolio. This includes 100,000 scholarships and will grow the initiative’s employer hiring network to 130 partners.

• IBM runs a digital badging program, now in its seventh year, that has awarded 3.7 million credentials to date, growing at a 61 percent pace from 2019 to 2020.

• Hubspot, the marketing giant, issues its own certifications and partners with colleges to integrate them into curriculum, and certification issuance was up approximately 70 percent in 2020.

And the evidence that new credentials are here to stay is growing. Strada Education Network’s recent national consumer surveys have found that the most popular option for American adults considering additional education or training is pursuing a “certificate, certification, or license.” Digital credentialing platform Credly reports that the number of organizations issuing industry and workforce credentials is up 83 percent since the pandemic. In publicly traded online education company 2U’s last fiscal year, “alternative credential” revenue surged 83 percent to $288 million. And Coursera’s IPO filing in early March showed booming business in professional certificate offerings from both universities and companies.

The idea of major companies becoming educational providers—both competing with and partnering with colleges and universities—understandably captivates many in the public, as well as those in media and policy circles. Headlines such as “You Don’t Need College Anymore, Says Google,” or bestselling author Scott Galloway’s prediction that leading tech brands will partner with universities to disrupt the traditional higher ed market are signals of the new role employers are playing in the credentialing arena.

These developments did not happen overnight, though many are just noticing them. In the 1990s, a “parallel postsecondary universe” of IT certifications emerged, as companies like Microsoft, Cisco, Novell and others created non-degree pathways to IT jobs during the dot-com boom.

But the current boom in employer-issued credentials is different—and potentially transformational. Unlike the traditional IT certifications of decades past, these new credentials are less focused on proprietary technologies related to a given tech vendor, and are instead more focused on broadly applicable tech skill sets such as IT support, cloud computing and digital marketing.

In effect, many of the new company-issued credentials (whether they’re called certifications, certificates, badges or some other name) reflect competency or content mastery in specialized areas in the same way that traditional educational certificates and degrees do. And, as much as these employer-issued credentials are talked about as substitutes to college degrees, they are increasingly being woven into college curricula through partnerships with postsecondary institutions, stacked into degrees, and integrated into new pathways to jobs for traditional students and adult learners.

For some employers, “talent development through credentialing” is a business. For others, these publicly-facing credentials are a philanthropic effort or brand-builder. These motivations and business model questions are important. Perhaps most significant, this trend represents employers stepping in to fill the skills gap and build learning options to create the digital workforce of the future. It’s clear that these employer-issued credentials are becoming a major part of the broader, significant trend toward skills-based hiring—and alternative, non-degree pathways into careers and professional advancement.

Why now? Because online education is now mainstream, and online platforms make it easier for employers to offer education on their own if they wish, separate from the traditional higher education enterprise. And, many companies can’t wait for higher education institutions to develop the shorter term credential programs employers need.

Need for More Dialogue and Deeper Study

Since employers are already earning respect in the job market for their offerings, and these companies are essentially new types of players in higher education, this trend raises a number of special issues and possibilities.

As researchers in non-degree credentialing, we believe there is a need to understand these employer-issued credentials as more than simply disruptors of traditional degrees.

It is important to explore the promise of these new offerings and types of partnerships as a signature frontier in developing collaboration between industry and academia. And we should ask what the U.S. credentialing landscape will look like if employer-offered credentialing becomes institutionalized as a new and potentially separate educational “system.”

Unfortunately, basic data on how many companies and organizations are issuing credentials to the public is not available—and virtually no research has focused on this topic. It would be helpful for stakeholders to understand more about the range of professional areas, the types of business and partnership models, and the scope of employer motivations. Understanding where this trend is headed is especially important for gauging the potential impacts on worker mobility, equity and the market for degrees and other types of valuable credentials. The emerging employer-issued credentialing ecosystem requires guidance and infrastructure (including checks and balances) in the same way that other segments of the postsecondary education market do. It may take, for example, a network or coalition of employers willing to consider these credentials alongside degrees in their hiring practices, as well as academic institutions willing to weave them into their programming.

Colleges and universities in particular stand to benefit from more research, dialogue and action related to employer-issued credentials. The stacking and weaving of employer-issued credentials to create new pathways into college degree and certificate programs is becoming an increasing trend. For example, partnerships with scores of community colleges are central to Google’s approach. And at Northeastern University, we’ve articulated IBM’s digital badges and Google’s IT certificate for degree program credit. Faculty and academic leaders could benefit from frameworks and best practices to integrate and align employer-issued credentials with their curricula—especially in a world where employers see validation by industry as one of the hallmarks of credential quality. Employers stand to benefit, too. We know from recent conversations that some are exploring doing more credentialing—either on their own or in partnership with higher education or third-party learning vendors.

Since employer-issued credentialing is happening outside some of the lanes that traditional higher education leaders typically travel in, a roadmap for the future is essential to ensure strong outcomes for learners, new opportunities for institutions and the development of a supportive ecosystem and policy environment.

Research is urgently needed to help understand this changing world of credentialing. And we may learn that if this is a sustained trend, it may represent an especially exciting way that employers, higher education institutions, edtech startups and workforce intermediaries can partner to thoughtfully create new options for learners.

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