Credentials vs. Degrees: How Much Clout Does Each Have?

This episode of Future youe is made possible with support from Ellucian. Ellucian helps colleges and universities find their path to digital transformation through cloud Ready connected systems. What's next for your institution? Let's take this journey together. Visit ellucian.com to get started. This is Future youe with Jeff Salingo and Michael Horn.

Welcome to Future youe. I'm Michael Horn, joined by my co host Jeff Salingo. And today on the episode we have Katie Lynch Holmes, a principal strategic consultant at Ellucian and education technology solutions provider who is sponsoring this episode of Future youe and Ellucian recently conducted a survey of both college students, 500 of them, and employers to really understand the value of the degree relative to credentials, what different parties thought that is important in today's modern workforce and where the puck is going to a certain degree of what will be valued in the future. Super interesting stuff. Katie. Thanks so much for joining us in Future youe.

Thanks for having me. This is a good time.

So perfect. So the first question that I'm dying of curiosity is why would Ellucian do this research? What was animating you all to dig into this with employers and students?

Well, and Ellucian is a thought provider and thought leader for higher education. We are a technology company that is specific to higher ed. So what we want to do is make sure that we're not just serving the current needs of higher ed, but helping them identify what are future challenges, how do we overcome those challenges? What are future areas of interest? How do we help you get to that next level and help our institutions move forward?

So there was a number of, I would say counterintuitive findings, research. And so that's actually where I personally want to dig into because I think it was interesting. One of them was we have a lot of studies out there that say employers doubt the value of the degree. They don't see that the skills that they're getting from graduates are what they actually need in the workforce. And yet one of your key findings was that that's not what HR officers are saying, that the majority of employers actually think their new hires have what it takes. Can you double click on that finding what it actually said and why you think that might be?

So I don't necessarily know that they're doubting the value of a degree, but they are saying that our credentials are as important and a degree and our credentials is kind of where we see the future going. So when we're double clicking on that, it really is an area of what is the degree providing and then how are we beginning to move forward beyond that degree? So that as we are looking to further expl what the lifelong learning looks like, that's where our credentials come into play and that's where we have more of a shorter time span to be able to get a more specific level of information. And then when we're diving in a little bit further into kind of what that gap looks like, we see that a lot of our students and our recruiters are looking at that transferability of skills. And that's where we see kind of that gap from what our employers are looking for as well as what our current, what our students are actually comfortable with as they're moving in. Interestingly enough, you see that our Gen Zers are the ones who are least comfortable with their transferable skills being communication, time management, et cetera. And that's where our recruiters are looking at specifically as well.

You talked about Gen Z, so you segmented the student responses by generation. So what, what differences did you find between the Gen Xers and the Millennials and the Gen Z?

Well, I mean, there were several that were interesting and part of the reason we dug into the generational divide is because a little bit of an atypical study, we weren't looking at just 18 to 24 year olds. We weren't looking at 18 or, you know, 25 to 30. We were looking for anywhere of a student from 18 to 55 or above that is actually enrolled in college or in a degree program currently or credential program. So that really gave us a wider berth than most of our studies that we're seeing on literature are now. And part of that is actually wanting to see. All right, so from that lifelong learning perspective, we can't look at just the 18 to 24 we have to look beyond. So what we actually found was that quite honestly, not surprisingly, their confidence levels increased. When we're talking about transferability, we're talking about the areas of what they actually want to the value of an education moving forward. That actually was the surprising one to me as the, as the generations got larger or older, they actually saw that going back and getting an education was more important to the extent that it's a 20% gap. So our Gen Zers are at 35% for what they actually plan to get a degree or get a credential two years from now, while our Gen Xers are about 55 and moving forward from that perspective.

Sorry, so one question on that, that gap is that because you think the older students have a deeper sense of what the labor market actually requires. And they're, they're just much. They're clear, if you will, on what the jobs they are moving toward look like and what skills they need to get there. Is that does that?

Yeah. Personally, I do believe that it is because they are seeing that that transferability of skills is very important and that being able to not just talk about what you've learned from that degree, but how you were learning the information from the microlearning perspective, looking at our technology skills, looking at marketing skills, specifically looking at what a microlearning credential would provide. That's where they're actually saying, yes, we need to move forward every two years or so. We need to be able to get additional education.

So going back to this transferability issue is part of this, especially with Gen Z or with younger workers, is that college doesn't really necessarily provide those transferable skills or they don't at least know how to translate them sometimes. Is that one of the issues that possibly came out of this?

I think that is a better one. That they don't know how to translate them, I think is a better way of being able to identify.

So in other words, they're actually getting taught these things in many cases, or they're learning them somewhere, whether that's within the institution or outside of the institution's walls, but they just don't know how to translate that into the workforce.

Yeah. And I think that's part of, again, when we looked at kind of the gap between what our institution, what our recruiters are saying, and what our generations are looking at. You see that that gap of about 30% has been there since the beginning, since we actually looked at Gen Z moving all the way up to our Gen Xers. You know, we've seen that that gap is existent. But I do think it is in the methodology and how we're actually teaching in higher ed. We're not specifically saying, hey, here's your communication skill, move it onto this next level, or hey, here's how you critically think, here's how you write, that's not the way we work in academia, that's not how we teach. Therefore it is harder to apply and transfer into your everyday life.

We're also giving them one credential at the end of the program as well. And so is one of the. As I look through this survey and look at, through the answers, one of the things that I keep coming back to is our collection of legacy credentials or our degrees in higher education. This idea we have the associates, and we have various flavors of bachelor's degrees and various flavors of Master's degrees and PhDs. Is there a need to perhaps think about new types of credentials in order to signal directly not only to the students, but to employers what skills they have? And so what might that look like? Could you tell us what new types of credentials might we need and more? So I think there's a lot of agreement around this is how do we get there?

I was about to hit my head on the microphone. I'm shaking it feverishly. Yeah, we absolutely. And Diana Oblinger, who is the former president of Educost, whom I love dearly, made a comment that I absolutely appreciate. She said, you know, the. The mission of higher education has not changed, but the context for which we achieve that mission has. And what we have to do is we have to think about that transferability. We have to think about what are they learning in that process in a way that then becomes these are badges or certifications or credentials in smaller tidbits of information so that we can talk about, you know, what you've learned security, you've learned automation, you've learned analytics, you've learned communication, you're learning all of these different styles of information that then does go into an associate's degree or that then could actually build into a master's or could build into a PhD or we can go the other way around as well. Where we're actually talking about, here are the skills you need to know in order to be an employee, and this is how we actually need you to get to that bachelor's. What's important to understand, though, is that we're not negating the degree itself. What we have seen is that the future of higher ed and the future of lifelong learning is building that degree and building the micro learning on top of that.

So this is not a. This is not meant as a replacement to the degree. So colleges, universities shouldn't see this as a threat then?

No, it is absolutely not a great opportunity, either or. Right? It is a good opportunity. And thanks for making the clarification. It's not an either or. It's a yes, and so get the degree. And then we can actually go back from that, the lifelong perspective. And here's your opportunity, kind of like we used to have continuing education, but this is a way to actually more specialize that continuing education and give them certification at the end of that to say, you've done this.

So one quick follow up on that. What's the biggest hurdle then to this Is it the institutions or is it the employers or is it a combination of both? For an accepted system like this to

come out the gap between the two,

honestly, what do you mean by that?

Well, I think that we have to increase our partnerships with education. Corporate and education have to be able to communicate and have to be able to facilitate a tighter partnership where we can demonstrate how learning is supposed to look, how the outcome is supposed to be seen, and then our employers can actually begin to recruit for it. What we are seeing is that our recruiters are actually looking at the credentials. They are saying that it is actually acceptable. They are saying that we can see time or time in a program as a way of being able to demonstrate learning. It's not just a degree, but degree does help. However, we're not translating that down into the higher ed world.

So some of these findings are pretty, I mean, pretty stark in that way, right? That employers give equal value to credentials and degrees. Literally 50% of employers said degree is a better signal and the other 50% said the credential, which are non degree credentials and then technical skills. I was struck by this as well. 40% said a degree was more predictive of having technical skills and 39% said the credential would be, which is really interesting, I think, given the number of job descriptions that still hold on to the degree as the coin of the realm. What is it going to take for more credentials to sort of gain acceptance or be understood in the marketplace?

First of all, I love that you actually pulled that up. That was one of the ones that was most surprising to me as well, was like, we are literally neck and neck for what our recruiters and what our employers say is as important. What I do think that we were having the conversation on the way over here. What we do have to be able to work with is that we don't have the college degree required in our application process anymore. It's college degree preferred and looking at or credentials required. We also have to work on the formatting for which we can actually provide those actual certificates or the certification of the micro learning. Currently, there's not a significant amount of institutions or learners or even employers that are doing things like blockchain or there's not a great way for you to actually be able to say, here's all of the certifications I have, here's all the micro learning that I have actually been able to achieve. We don't have a way to prove that or an easier way to find. And that's where things like LinkedIn are helping where you are seeing a lot of badging, where you are seeing a platform that actually can display. Here's the information that I have, here's a way that we can actually do this and we'll see probably a change for our eportfolios to come back and actually be able to demonstrate. Here's my learning methodology, here's what I have seen, here's the information that I have, and it'll attach to our blockchain so our employers can, can actually be able to review that.

So the hypothesis. I just want to make sure I get this because this is sort of. I've heard other people argue the reason degrees will be so durable and we will never have certificates gain currency. And is that for all a degree lacks in imperfection and imprecision in terms of signaling, people still know what a bachelor's mean, they know what associates mean, they know what a masters mean. And when I start to introduce all these new terms and all these new things of skills from different providers and the like, I just, I'm not sure how to evaluate it. Is the hypothesis that the blockchain or some sort of technology gives you an iron secure way of, of conveying the, the certificate and then it's backed up by the portfolio. So I can actually dig in and say this is what it means and over time it gains currency.

Yeah. And I think with, with anything as we learn a common language, as we learn how to speak in the same methodology, yes, that does begin to gain value as you. Same way with a masters, we know what a master's means because of time, because there is some actual verification of the skills that are coming from a person who has a master's. This will also happen that we can verify what our credentials mean through blockchain or through kind of the LinkedIn portfolio so that you can see a person who has this credential demonstrates this level of knowledge.

So this seems to me in many ways to be a systems problem then, especially when we think about lifelong education. Right. So, you know, so for. It's very difficult if I wanted to go to a university to take an individual course, largely because they can't figure out how to do it. And then from the employer's point of view, it's very difficult to get a sense of this stackable nature of education. Right. That people are getting education in different forms, different bites from different places and it's all coming together. So this seems to me in many ways to not only be a cultural problem, but also to be a technological problem or A systems problem on the part of the universities and the. And the employers as well.

Oh yeah, absolutely. And I'm laughing because I currently working on human capital development. So lifelong learning is absolutely right in the area and process is going to be our biggest challenge. And that's what I was talking about earlier with how do we make this work? It's by decreasing the gap between higher ed and our employers. We've got to find what that verification looks like and how we can display that in blockchain or how we can display that in the methodology. And we have to have our employers actually participating in the conversations around what certifications are important, what type of microlearning is important, so that we can actually create more of a demand for that certification. And you see things then like the Golden Triangle in Mississippi, when they went through Sara Lee left, they had about 2,000, 3,000 unemployed people. The economic development group came in and said, you know what, this is what we want future workforce to look like. And they created a partnership between Boeing and several other employers in the area, as well as three institutions. So they were creating more of a certification as well as small badging to work with our employers, increase the transferability of those skills.

But, but the issue I guess in the future is that if you don't work for a big employer or you're in the gig economy like Michael and I participate in, like how do you get access to this ecosystem if you're kind of working on your own or you're working for a small employer who may not be the Boeings of the world, or the Sara Lee's of the world, or many of these other employers that I know are really interested in this because they have huge hiring needs, but they're not the small business that might hire five people a year.

And I think this is how as we begin to kind of standardize this communication and standardize that language and creating a platform and things like LinkedIn are helping with things like digital badges are helping with things like digital degrees are actually helping with all of this information, then our employers, our small business owners can actually tag into a more affordable. And we can always work with our higher education institutions because we do have platforms for that in our continuing education in workforce development. Most of our institutions will have a branch of that. We just have to be able to work with them on how they actually need to offer that degree or how they actually need to offer that credential.

And in the long run, this may actually improve hiring, it seems, because it seems like we hire a lot on gut. And there's been a lot of research this. Right. We used to actually test people before we hire them. Then we moved away from that and just kind of get a feel for people when we hire them and we make a lot of bad decisions as a result. Not a lot. Some bad decisions. And so this could eventually over time then having this ecosystem of different types of credentials could actually help. And knowing the skill sets behind them and knowing how employers could translate those or employees could translate those, we could actually improve the, the hiring process.

That is the hope. Yes. Because we have a significant skills gap. That's not, that's not news to anybody really. We have that employer work gap. We also know that at the CEA Challenge every year for the last three years has said that being able to hire good employees that can demonstrate a lot of these transferability of skills are actually what we're looking to do. So yes, the goal is for all of us to be able to work towards an employable graduate either of the degree program and or of the credential program.

Well, Katie, I think this is probably one of the biggest issues facing not only the future of the workforce but the future of higher education because it is the business they're in which is providing the signal to the workforce. So this is fascinating work and thank you very much for joining us on Future you to explain it today.

No, this has been so much fun. Thank you very much for having me. And if we want to continue the conversation, just let me know.

And where can people find this research?

They can actually go to get the research on ellucian.com credentialssurvey2019 perfect.

Thank you very much.

Thank you. Have a good day, guys.

This episode of Future youe is made possible with support from Ellucian. Ellucian helps colleges and universities find their path to digital transformation through cloud Ready connected systems. What's next for your institution? Let's take this journey together. Visit ellucian.com to get started.

Welcome back to Future youe and that was a great conversation with Katie Lynch Holmes from Ellucian talking about their new survey on this gap between education and the workforce and the future of work. Michael, we got into a little bit of the survey, but there was many other pieces of it that we didn't unfortunately get to. What, what other key takeaways did you have in looking at it?

Yeah, so the first thing that I started with I just think is really interesting, which is that we hear all the time that employers say the degree is not the signal that we need it to be dissatisfaction with the skill sets of young students graduating from college. And yet here the majority say that they believe that new hires have what it takes. 52, excuse me, 62% of recruiters are very confident that candidates have the skills to succeed. And, and that just feels so different from the narrative that we are used to hearing. Anyway, uh, and so I, I, I thought that was super interesting. The second one, this is personal to the book that I'm writing right now, Choosing College, coming out in August, which is that the top reason students enroll in college is to improve their career prospects. They had. I tend to think this is a function of the survey writing. Um, and not to say that career prospects aren't part of the decision, but when we piece together over 200 mini documentaries of students making the choice, it's just way more complicated than just that. And career is sort of the thing that they need to check in an institution, but it's not the thing often driving the actual decision itself is what we found. And so the narrative that I found is just much more complicated. And a lot of these surveys I feel, miss some of that complexity of how people are actually making the decision. And then last thing I guess I would say is it was really interesting to me that employers say credentials, non degreed credentials are going to grow in importance in the years ahead. It's something that we talk a lot about in the higher education ecosystem and which would happen and hope would happen and, and, but here employers saying that they think this will happen, which I, I suppose is heartening because it means that they're, you know, we're not just talking to ourselves. There, there is a larger workforce, higher ed conversation.

And so this leads me to my first question for you. And this is obviously a well debated subject since credentials is the business of higher education in many ways. So how will credentials gain critical mass in this marketplace? And when we talk about credentials, we're talking about obviously well beyond the credentials that have already gained traction in this marketplace. What I call the legacy credentials, meaning the associate's degree, the bachelor's degree, the master's degree.

Right.

As Katie said, they'll probably always be there. This is a both and type of thing. But how are these other new types of credentials, whatever they might be, how will they gain traction in the marketplace?

Yeah, I mean, I think so. She gave the most plausible answer, I guess I've heard of how you start to put value behind the credentials. The challenge for an employer, let's start with large employers for the moment, is that you have a New credential coming in you've never seen before. And for each of the applicants, you're going to click behind it to look at their e portfolio of work. That's a lot of work. And so how do you create new applicant tracking systems on the employer side that, that can quickly sift through this new data of evidence of actual work to make decisions about, about who you're going to hire and not. The second challenge that I think employers have to wrestle with is much more concretely defining what are the actual skills that successful employees in this role need to have and how would we know that they've had it? And employers have not done a great job of actually codifying that or even having a true understanding themselves on the ground of what those skills are. So there's a real communication problem, as she said, between higher ed and workforce today. And I think workforce as, as the customer, if you will, for these sorts of new degrees has to get a lot more explicit and update applicant tracking systems to allow them to sort through voluminous numbers of applicants in these new ways. Now, the big question that I think we often hear is, well, why have credentials? Why not just match skill set? Right.

I, as Katie was talking, I was wondering, maybe we don't even need credentials. Yeah.

And so I, you know, I think it's a viable question, right? If we, if we were actually able to get to that point, how, why not just match based on skill set acquisition? And maybe that's where it goes, or maybe credentials becomes the simplifying mechanism to represent skills that then allows applicant tracking systems to sort of absorb that information and be part of a decision of whether to hire or not. The challenge I still see with it is who is doing the assessment that a student has actually attained these skills? Who's certifying that? We sort of trust colleges and universities right now as we think about opening this up to an array of providers offering learning experiences, that trust factor and assessment of actual learning and acquisition of skills and knowledge seems trickier at best. And then the other piece, your part about the bespoke model, I can imagine Boeing is ironically the example everyone is giving right now, given the news over the last couple months. But, but that said, you know, I can imagine someone building a specific certification program for a large employer like a Boeing, but that's not a marketplace solution where that credential then has value beyond, beyond company. And so what are the different ways that occurs, I think is an open question right now. Do we start to see assessments come back into vogue? Is there A change in the law that even allows that to happen in the United States? Or do we see very big brands in different verticals sort of stamp their own seal of approval? And then companies, if you will, below that company in a given vertical, say, well, if you have the Facebook digital marketing certificate, well, you must know how to do digital marketing. I'll accept that. Do you see students from your research even thinking about this question?

Well, I mean, part of the problem, and Katie talked a little bit about this is what I would call the translation skills of students. Because for the research, for the last book, I sat in on a lot of interviews with new college graduates or soon to be college graduates with employers. And one of the things they're very good at is repeating what's on their resume, the bullet points on their resume or what's in their LinkedIn profile. But they're not really good at translating the skills, whether it was from an internship, whether it was from class, whether it was from extracurricular activities, athletics, whatever it might have been. They just are not as great as, I think, older adults. And that what was interesting about their survey in terms of breaking it down by generations, because as you spend time in the workplace, it's much easier for you to explain, well, what I did in this other job or what I did in this other piece of work now can be translated into what I want to do next. Students just can't figure that out. And it's a skill, I think, that comes. It's actual skill that comes with time. So the question to me is, can colleges incubate that skill, or can they assess that skill or push it forward with students so that they know when they go to an interview how to do this? And again, all of this, to me, we talked a little bit at the end, is a. Is a platform problem, is a technology problem, is a systems problem. I think this is all solvable in terms of helping students collect all the stuff that they're doing in college, because they're doing a lot, again, inside the classroom and outside the classroom. And again, we mostly only measure what's happening inside.

Yeah, I was gonna say the outside the classroom actually is likely more indicative of some of these skills that many

learners, former soft skills that really come through leadership, come through athletics, come through clubs and other activities. And I've been on some campuses now that are doing a much better job at collecting that information. Again, technology, we know where students are at any moment of the day. With card swipes and everything else, we can now track them and help them Then translate the fact that they spent X number of hours working on the student newspaper or Y number of hours in student government or athletics. And okay, what did you do? And start to take inventories of that and then start to translate those skills. Part of the problem. And Randy Bass, who we've been had on this show before from Georgetown University, talks about this a lot. Like, we value what we value most about higher education, often happens outside the classroom, but it's the least measured stuff on college campuses, and it's what we don't actually charge for.

Well, and something we found in choosing college also was because we also were interviewing students 18 to 60. So was the older students one of the reasons that they were more specific about what the skills that they needed and could translate that was frankly, they had been in the workforce so they could actually see those skills. And you point out in your, in your last book that I think it's 20% of teenagers now have a paying job compared to 40% a generation ago. If I have that stat. Right. And, and, and so the visibility students have into what it takes to make it in the workforce. And then what I would even need to translate is actually pretty obscured when you're younger. And so one of our central recommendations is that we need to have a much better system of gap year, so that, and not just gap year, like backpacking around Europe, but actually doing something in short, immersive experiences on the job.

Well, and I think that this to me is probably if, when we talk about the future of higher education, this is, this is probably the biggest issue I think, facing it. Again, it's the primary business of higher education is credentialing. And we're starting to see a lot of other players now in the system outside of the traditional higher education ecosystem. There's a lot of questions from employers about whether those are valuable. There's a lot of questions on assessments. But if those things are figured out, I think that higher education's corner on this market, traditional higher education's corner on this market, is going to be under serious threat.

Threat. Well, so let's be provocative there. Right. Because there's a version that Katie described where these get additive to degrees, and there's another version that as they start to have their own legitimacy, that they actually disrupt the degree, especially if they're less expensive.

Yep. And so I think that this offers both opportunities and huge risks for universities. It depends on how you come down on this in terms of where, where we go next.

Totally. And their platforms like, like degreed is a company, right, that sit inside of employers and are trying to make sense of these worlds. And if they figure out a way to translate, employers do the work of translating the skills. Could be a wild west that we have not known before.

And I'm sure something we will be talking about on future episodes of Future you. So many thanks to Katie Lynch Holmes for joining us today and thank you for tuning in to Future youe. If you like the show, please be sure to give us a five star rating on itunes or wherever you get your podcasts. And until next time, enjoy your work in and around higher education.