Credentials for skills-based hiring

College degrees have traditionally been seen as a pathway to well-paid work. In 2020, workers with Bachelor’s degrees earned, on average, almost twice that of workers with only a high-school diploma. But participating in such programs requires an investment of time and money that many are not able to make. While access to higher education has expanded, the majority of school leavers do not enroll in college education. And of those that do enroll, students from poorer income families are less likely to complete their studies. Hiring and promotion based on skills rather than degrees can reduce the barriers to reskilling, while helping to level the playing field for workers from disadvantaged backgrounds. 

For skills-based hiring to work, employers and learners need credible ways to signal and validate the acquisition of skills. Alternative credentials target specific skills or knowledge areas, offering low-cost, accessible ways for workers to demonstrate their competencies. Typically acquired through online learning, these bite-size credentials are available free or at significantly lower cost than conventional education, making it easier for learners and companies to invest in skilling. Many are micro- and nano-degrees designed as ‘stackable’ components of larger qualifications.

Although the availability of alternative credentialling programs is increasing, businesses have yet to mainstream these within hiring and promotion processes.

The last 15 years have seen a surge of interest and investment in digital models that make education and training radically more accessible. The edX platform founded by Harvard and MIT offers MicroBachelors linked to college credit.

Other online educational platforms have emerged targeting job-ready skills. Udacity and Coursera offer microcredentials in areas such as data science, machine learning, business analytics and cloud computing. Key to the credibility of such courses have been the close partnership of the platforms with industry to define course content.

A new generation of platforms such as Badgr is helping companies map and communicate skills-based development pathways that stack different qualifications and give employees a portable record of their learning history. As the range of alternative credentials offered in the marketplace grows, governments are being called on to provide clearer standards for quality and transparency (the EU is currently considering legislation). There are also national efforts underway to standardize a skills taxonomy (e.g. NESTA’s data-driven skills taxonomy for the UK).

Accompanying the rise in alternative credentials, increasing numbers of corporates such as Google, Apple and Bank of America, are removing requirements for a Bachelor’s degree to access roles in business analytics, software engineering, hotel management and client account management. New cross-industry collaborations such as OneTen and the NY Jobs CEO Council are helping business to go a step further and actively expand recruitment of people without 4-year degrees.

Within your own organization:

• Update HR systems and processes to enable skills-based hiring and promotion, articulating skills-based requirements rather than specific degrees.
• Clearly communicate alternative hiring pathways into your organization and specify skills-based development pathways to promotion.
• Include alternative credentialing in learning and development programs provided to employees.

With others:

• Work with learning platforms and industry peers to ensure the relevance of alternative credentials to meeting skill demand.
• Work with learning platforms to integrate company training courses within a stackable credentialing system to increase the value of in-house training for workers.
• Build transparency with providers and workers around which credentials are used in hiring and promotion decisions.

• Improve awareness of alternative credentials within industry groups and bodies and work with governments on the development of an internationally recognized skills taxonomy.