In the 1950s and 1960s, skilled workers, whether factory workers, white-collar employees, or managers and salaried professionals, tended to work for the same rm for many years—often their entire careers.1 In the words of economist Paul Osterman, “The typical American worker averaged the same number of years at their employer as did the average Japanese employee, who lived under a system dubbed ‘lifetime employment.’” That meant that rms lled many job vacancies from their existing workforce—the “internal labor market”— and promoted existing employees to fill higher-level openings that arose because of turnover, retirements, or business expansion. In doing so, employers did not need credentials to tell them what these workers knew and could do, since they already had years of experience supervising them. Lower-skilled workers labored in the much more volatile “external labor market” but by de nition lacked the kinds of marketable skills to which credentials typically attest. Thus, workforce credentials played a much smaller role in the labor market than they do today.
That stable labor market has long since given way to one characterized by considerable volatility for most skilled as well as unskilled employees. Moreover, the skill needs of firms have increased dramatically, as evidenced by both the large expansion in the ranks of technical and managerial employees and the “upskilling” of many occupations. One result is that employers need many more skilled and highly skilled workers than in the past, yet rely far more on the external labor market for them.
In addition, much occupational knowledge has been codified, and educational institutions have emerged to transmit it to those who aspire to enter knowledge-based occupations. These schools and programs award credentials that presumably strengthen their holders’ position in the labor market, which in turn reinforces a “credentials competition” among both workers and the institutions that award them. That is, more workers seek higher-level credentials to distinguish themselves on the labor market, and more schools and programs offer their own distinctive credentials in an e ort to stand out from their peers and attract more students.
These developments have vastly increased the labor market’s dependence on credentials as attestations of their holders’ knowledge and skills. Unfortunately, the credentials themselves perform this function badly. To begin with, there is a confusing variety of credentials offered, ranging from academic degrees, for-credit certificates and noncredit certificates to industry certifications, state and federal occupational licenses, apprenticeships, and badges. Degrees and certificates attest to the successful completion of a certain program of study, but they say little about what its holder can actually do in a particular work setting.
By contrast, certifications attest to the demonstrated possession of industry- or occupation-relevant skills, require periodic renewal, and can be taken away for unethical behavior or proven incompetency. Accredited certification programs go further, requiring that the assessments to demonstrate skills are carefully derived from job analyses and that these assessments are fair, valid, and reliable. However, according to Workcred, only about 10 percent of certifications are accredited by either of the two main bodies, the American National Standards Institute (ANSI) and the Institute for Credentialing Excellence (ICE), and the quality of the unaccredited ones varies widely, so that some so-called certifications are in reality just certificates.
Adding to the confusion created by the different types of credentials is the sheer number of them. According to a recent report from Credential Engine (2018), there are 213,913 degree-granting programs (associ- ate’s through doctorate) and 66,997 for-credit certificate-granting programs at the nation’s Title IV colleges and universities. There are also 13,656 federally registered apprenticeships, 8,864 state-issued occupational licenses, 5,465 certifications, at least 650 coding boot camp certificates, and 47 online MicroMasters and Nanodegrees, for a total of 308,942 credentials in the United States. This tally does not include the growing number of digital badges, nor does it include licenses issued by the federal government, noncredit certi cates within and outside higher education, or credentials issued by educational institutions not covered by Title IV, as there is no way to accurately count them.
With such a large and varied assortment of credentials—and many new ones emerging yearly—it is extremely difficult for either employers or those contemplating obtaining a credential to make sense of their options.
In trying to navigate this confusing terrain, the consumers of creden-tials—students, parents, career counselors, loan agencies, employers, and so forth—often look to the quality assurance bodies that accredit, endorse, recommend, or otherwise approve speci c credentials. Yet here too there is confusion about what these stamps of approval mean. Consumers are fairly familiar with the 6 major regional accreditors ofhigher education institutions,3 but they are far less familiar with the 10 national accrediting organizations, the more than 100 organizations that accredit specialized and professional programs, and the hundredsof accreditation bodies that are not recognized by the U.S. Department of Education or the Council on Higher Education Accreditation, some of which are “accreditation mills.”
The current credentialing landscape makes it virtually impossible for either an employer or a potential student to comprehend and com- pare what particular credentials represent in terms of competencies, quality of instruction, validity of assessment, relevance to current occu- pational requirements, market value, and so on. This is a serious prob- lem in an economy whose prosperity depends on the development and deployment of human capital.
There is an important race taking place in the world of workforce credentials. On one side are the growing number and variety of unique credentials and the attendant confusion about what they mean, how they relate to each other, and what their value is. On the other side are new tools for creating and communicating comparable information about credentials of all kinds, from certi cates and degrees to certi cations, licenses, apprenticeships, and badges. At present, the forces of prolifer- ation and chaos are winning, but smart-technology platforms are poised to overtake them. Much depends, however, on whether key stakehold- ers can overcome classic collective action obstacles and adopt these promising solutions to the credentialing chaos.
In short, the credentialing marketplace is characterized by a seri- ous lack of transparency, trustworthiness, and comparability. This is not surprising in a sector as complex and decentralized as that of education, training, and skill assessment. But in a knowledge-based economy, the result is misguided investments, regretted hiring decisions, and serious skills gaps, which in turn weaken workforce quality, economic growth, and social mobility.
Chosen excerpts by Job Market Monitor. Read the whole story at Fixing the Credentialing Chaos: A National Tool and State Application