Short-term credentials are here to stay — but how do employers view them?

InsideTrack + UPCEA whitepaper explores the impact of short-term credentials

As the economy continues its pandemic recovery, the national unemployment rate hovers around 4% — yet the number of job openings is nearing a record high. More than 4 million U.S. workers have quit their jobs as part of the Great Resignation. With a tight labor market and growing talent shortages in various industries, some employers are reconsidering the value of a college degree as a stand-in for skill and job readiness.

Even before the pandemic hit, companies like Google, IBM and others announced that they would loosen or eliminate degree requirements for some job paths. It remains to be seen whether or not employers will embrace this shift to hiring based on skills instead of degrees. But the growing demand for non-degree alternatives is undeniable.

That’s where short-term credentials come in.

According to the latest reporting by nonprofit Credential Engine, there are 920,000 unique postsecondary credentials available in the United States, of which approximately 560,000 are short-term credentials from MOOC (massive open online course) providers and non-academic organizations. According to a recent Strada Public Viewpoint survey, more than 40 percent of working adults report having completed some type of non-degree credential.

Yet despite a growing landscape for these new educational credentials, questions emerge for higher education leaders to consider.

  • Do employers view these new credentials as a viable alternative to traditional degrees in the hiring process?
  • Do managers believe that short-term credentials effectively demonstrate the skills and knowledge potential workers bring to the table?
  • Are students and workers reaping the benefits of these new credentials?
  • Do businesses see colleges and universities as long-term partners for meeting their credentialing and upskilling needs?

InsideTrack and the University Professional and Continuing Education Association (UPCEA) joined forces to find out. With support from the Non-degree Credentials Research Network (NCRC) and Strada Education Network, more than 1,600 individuals participated in the study. Of those, 1,023 professionals met all criteria and completed the survey. The results help us to better understand how employers view short-term credentials and their value as a stand-in for skill, competency and fit.

Do employers view these new credentials as a viable alternative to traditional degrees in the hiring process? 

The short answer is “not really.” Most employers still see college degrees as the gold standard. But (and here’s the caveat), if their company doesn’t require a bachelor’s degree, managers seem very willing to hire people without them.

  • Nearly two-thirds (65%) of respondents say their organization still relies on a four-year degree as the primary measure of an individual’s ability to perform. What’s more, 40% of managers surveyed said their organization has policies in place that require new hires to have a degree.
  • Trust in associate, bachelor’s and advanced degrees was generally higher at companies that have policies requiring them as a condition of hiring. 
  • Managers rate master’s degrees (52%) and professional certifications (41%) as the most likely to signal that an employee can be trusted to work independently and immediately.
  • When given the option, managers seem eager to hire applicants without degrees. At companies where there is no degree requirement, 46% of respondents said they hire people without a college degree extremely often (14%) or very often (32%).

FOUR-YEAR DEGREE POLICIES, PROHIBITIONS, AND HIRING 

Does your organization have any policies or practices in place that prohibit hiring professionals that lack a four-year degree? (n=1,023)

How often does your organization hire someone without an associate or bachelor’s degree, but with other qualifications that meet the knowledge and skill requirements of open positions? (n=613)


Do managers value short-term credentials?

Yes, with an asterisk. Employers seem to feel more strongly that short-term credentials are a great way to convey skills — but not necessarily as a way to land the job in the first place.

  • In total, 80% of respondents agreed that short-term credentials are an acceptable way to convey skills or areas of knowledge in the workplace.
  • Respondents agree or strongly agree that soft skills can be learned through an educational program (83%) and that higher education offers programs that can help develop them (79%).

EFFECTS OF SHORT-TERM CREDENTIALS

Alternative and short-term credentials are an acceptable way to convey someone’s skills or knowledge areas. (n=1,023)

What effect does earning a short-term credential in an industry-relevant subject area have on an employee’s likelihood of receiving a promotion? (n=1,023)

Please rate how likely your organization is to rely on four-year degrees as the primary measure of competency, skills, and knowledge for new hires. (n=1,023)


Are students and workers reaping the benefits of these new credentials?

Workers who already have a job will likely enjoy benefits related to the addition of short-term credentials to their resume and skill set. But on the flip side, people looking for work will still struggle to enter with just a short-term credential.

  • Just over two-thirds (71%) of managers agreed that earning a short-term credential would increase the likelihood of an employee receiving a promotion 
  • Yet more than a quarter (28%) of managers believe a short-term credential will have no effect on advancement opportunities in the workforce.

Do businesses see colleges and universities as long-term partners for meeting their credentialing and upskilling needs?

Absolutely. But employers would like more say in the programs institutions are offering to students.

  • Employers rate their confidence in higher ed fairly high. Most managers (88%) said their organization already collaborates with institutions of higher education to create relevant programs for their employees and other professionals in the field, and managers generally give those partnerships high marks.
  • Nearly two-thirds of respondents (63%) said they were partnering with colleges to provide professional development programs.
  • That said, employers want more of a seat at the table. The vast majority of respondents (84%) believe that business and industry should be extremely (39%) or very involved (45%) in shaping education and training programs offered by higher ed in the future. Managers not only believe that they should be more involved working with higher education, they also believe their involvement will have an impact.

EMPLOYER INVOLVEMENT WITH HIGHER EDUCATION

Currently, how involved do you think business and industry are in shaping education and training offered by higher education providers? (n=1,023)

In the future, how involved do you think business and industry should be in shaping education and training offered by higher education providers? (n=1,023)


Where do things stand today with would-be employers and short-term credentials?

We found that managers overwhelmingly see the value of investing in education and upskilling as a tool for recruitment and retention—and in fact, most want to see their companies take a more aggressive approach to partnering with colleges and universities to meet their talent needs. Executives, in particular, are very optimistic about their ability to influence institutions to develop new offerings to meet their talent needs.

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