Credentials: Education’s Land Mines or Manna from Heaven?

I follow Ryan Craig’s blog. I have autographed copies of two of his books, and I even have a nice University Ventures jacket, thanks to being a panelist at one of his annual meetings. Generally, I agree with his posts.

“How Digital Credentials Will Diminish Degrees” is the title of this week’s Gap Letter (Volume III, #3) and the subject of a Forbes article by Craig. After a short sidebar conversation about celebrities, Craig writes “in the realm of credentials, degrees are easily the most famous.” And similar to celebrity endorsements, Mr. Craig opines that “degrees are also a lazy shorthand.” The question is a shorthand for what.

Mr. Craig observes that prior to the Great Recession, degrees signaled to employers that candidates could learn the job. Now that many industries have transformed themselves thanks to technology, most employers are looking for employees who have relevant experience.

According to Craig, we now have a price-value mismatch for degrees. Potential applicants to non-selective schools have recognized it, and applications to those schools are down. Diverted students need to earn a postsecondary credential, and it will likely be digital.

Traditional degrees are analog, tracking skills and capabilities in the same way a watch tracks time. The movement of the hands on an analog watch are an analogy for the passage of time.

But digital technology, on the other hand, articulates in discrete digits so that the information is easily assessed and transmitted. Most digital credentials have three key elements: portability, security, and metadata supporting the skill statement.

Craig notes that Credential Engine has tallied 475,000 unique non-degree credentials in the U.S., and Credly documents approximately 50,000 new digital credentials issued each day. The most popular non-degree credentials are all digital.

It’s important to understand how employers utilize credentials in hiring, according to Craig. He describes the hiring funnel for active job seekers and states that there is a slightly different funnel for recruiting.

The problem is that neither of these funnels works well for active or passive candidates. More specifically, the problem is at the top of the funnel, where it is difficult to determine which applicants could do a great job. Digital credentials, like the ones maintained by Credly, can solve the problem if there are apps to make the digital credentials intelligible for employers at the top of the hiring and recruiting funnels.

Even though degrees will remain famous, until they are unbundled and articulated in skills and capabilities, a lack of predictive and skill data will land most degrees on a “Where are they now?” list, per Mr. Craig. He predicts that apps atop digital credentialing systems are on the verge of democratizing paths to good jobs. The economy will transition from pedigree and degree-based hiring to skills-based hiring.

There’s much to like about Craig’s fortunetelling, but I believe the transformation will not occur as soon as apps are available to interpret Credly’s credential data. In fact, I predict that the majority of digital credentials that are evaluated for potential hires will be digital credentials that have been earned by someone who has a degree. Data from the National Student Clearinghouse confirm the increasing popularity of credentials plus a degree earned at Title IV institutions. Just as employers have used the degree designation as a signal to accept or reject an applicant, they’ll continue to use it but add it up with a credential.

Moreover, while there are a few thousand academic institutions with reputations and an alumni base going back as far as a few hundred years (Craig’s alma mater, Yale, was founded in 1701), there are far too many new entities pushing digital credentials that may have less than 24 months of experience doing so. Unless the educational organization issuing the credential has a tightly aligned and respected relationship with a company known for its expertise in certain skillsets, the chance that multiple credentials supersede a degree is very slim.

It’s much more likely that colleges will begin following the advice of Jeff Selingo and Matt Sigelman. In an article published in the Wall Street Journal, Selingo (former editor of The Chronicle of Higher Education) and Sigelman (CEO of Burning Glass) write “colleges that work aggressively now to prepare students for the jobs that remain in demand can ensure that graduates still make a strong start.” Using data from Burning Glass’s massive database, they write that in certain fields, job openings have increased over the course of the pandemic.

Selingo and Sigelman acknowledge that breaking into the post-college job market is less about where graduates went to school or their degree than it is about the skills that they possess. Graduates with problem-solving, communication, and technical skills command a 30 percent salary premium.

Colleges need to identify career pathways and the skills required for students to enter those pathways. Having a career services office is not enough, since nearly 80 percent of students report they rarely used the college’s career services office.

If students were provided with the skills that companies seek, their major is not so important. Selingo and Sigelman note that a psychology major is not normally a hot major for recruiters.

However, psychology majors with data analysis skills acquired through research or internships can unlock additional entry-level jobs paying $60,000 per year. For psychology majors without those skills, the overall rate is $39,000.

Colleges should give up their “once-and-done” model of education and open their course catalogs and career counseling services to alumni. This strategy will not only help recent graduates gain skills not obtained prior to graduation, but it will also help alumni whose positions have been displaced by automation. These initiatives should be part of an overall strategy for colleges to prepare their students for the emerging careers in the economy of the future.

Selingo and Sigelman are aligned with Craig in that they believe that colleges that do not connect with the job market will be imperiled as word will spread that their graduates are unable to obtain great jobs. Unlike Craig, they believe that colleges can provide the skills that employers seek.

Whether your point of view is more aligned with Craig or Selingo and Sigelman is not as important as the recognition that a generic college degree may not be enough to attract employers. Craig argues that because the cost of college has increased so much, students and their families are abandoning colleges and will seek credentials at a much lower price.

However, not all colleges and universities have increased their prices to stratospheric levels. Additionally, it appears that the Biden administration will attempt to provide a tuition-free community college degree. Should his promise become a reality, that will remove some of the affordability issues for those less able to afford college.

The recent dip in college enrollments that Ryan Craig referred to in his piece were all at the community college level. If the National Student Clearinghouse reported those drops by socio-economic level, I believe we would find the greatest impact among those able to least afford all of the basic amenities in life, not just college.

The majority of community college students work in addition to attending college. Many of them hold hourly wage jobs. These were the jobs most impacted by the pandemic. It is likely that the decrease in community college enrollment was triggered by a financial impact to students’ family incomes.

Each of these authors have made good points in their arguments. I believe that a degree will continue to be one of the tools that employers choose to differentiate candidates.

At the same time, colleges do need to be mindful of the skills employers find most attractive and build student acquisition of those skills into their curricula, even liberal arts curricula. Opening career services offices and the course catalog to alumni is not only necessary but will also be part of good business practices.

With the online expertise that many colleges acquired during the pandemic, maybe the digital degree that Craig mentions is on the verge of arriving. At the same time, the proliferation of and lack of standardization of credentials is such a problem (in my opinion) that affordable colleges with a profound understanding of the job market will be in more demand than standalone credentials.

Subjects of Interest


Higher Education

Independent Schools


Student Persistence