“Credentials Matter,” a new report released by the Foundation for Excellence in Education and Burning Glass Technologies, joins other recent studies in offering an in-depth look at the industry-credential landscape by examining how states collect data on attainment, employer demand, the types of credentials that high school students earn, and whether demand aligns with credentialing supply.
The report defines credentials as third-party verifications of an individual’s qualification or competence in skills. It further defines industry recognized credentials as those that are sought by employers and preferred or required for recruitment, screening, hiring, retention, or advancement purposes. Most credentials available to high school students are offered as part of career and technical education (CTE) programs, and the report identifies five types: license, certification, software, general career readiness, and CTE assessment. Although the report considers all available credentials reported by states, it does not assess the value of specific credentials beyond employer demand. It also does not assess the postsecondary attainment of industry credentials, since too few states provided postsecondary data, or the relationship between attainment and CTE program quality.
To analyze the supply side of the credential landscape, the Foundation for Excellence in Education asked each state to answer questions about data collection. They report using varying methods, though nearly all of them rely on self-reported data by schools or districts. That’s troublesome, since self-reported data have an increased chance of being incomplete or inaccurate. There are four states—Tennessee, Indiana, Michigan, and North Carolina—that have data-sharing agreements with credential vendors, a more reliable source for the information. States were also asked by analysts to provide data on credentials earned by public K–12 and two-year college students through CTE programs. As of the 2018–19 school year, twenty-eight states collect quantitative data on attainment, and twenty-four of them provided data for this report. Overall, their dataset includes over 780,000 credentials earned from 367 unique vendors.
Across states, there is considerable variation in which credentials students earn among the five identified types. In Mississippi, for example, 100 percent are certifications. Utah, on the other hand, reports that only 12 percent are certifications and 78 percent are software credentials. Nationally, almost half are certifications. These can provide entry-level and advancement opportunities, but their overall alignment is poor. Only two—Automotive Service Excellence and ServSafe Certifications—are on both the top-supplied and top-demanded lists. Licenses, meanwhile, are the least common credential, and are mostly misaligned with industry demand due to both an “extreme oversupply” of those associated with low-wage occupations and an undersupply of licenses for middle- and high-wage jobs.
To analyze employer demand, Burning Glass Technologies, a software company that offers job market analytics, used its database of more than 150 million unique online job postings. Its focus was limited to postings that were localized in states; requested specific credentials, occupations, or skills; matched the same year as supply data; and paid a living wage, defined as $15 per hour. Results show that, although certifications and licenses are the credentials most likely to be required, employers often neglect to specifically request them in job descriptions. This manner in which employers communicate their needs and requirements to potential employees—known as employer signaling—is one of the key areas where states need to improve.
None of the twenty-four states with available data were highly aligned in terms of supply and demand. Twelve were rated as having moderate alignment, while the other half had low alignment. The most significant source of misalignment comes from an oversupply of credentials that are not in demand in the labor market: Only 19 percent of credentials earned by K–12 students in this analysis are actually demanded by employers. In fact, of the top fifteen most commonly earned credentials, ten are oversupplied. They include W!SE Financial Literacy Certification, NCCER Core Curriculum, and Basic First Aid. Despite the common oversupply problem, states must address misalignment on an individual basis because labor markets are vastly different from state to state.
The report includes several recommendations for a variety of stakeholders. For states, it’s important to establish statewide definitions for industry recognized credentials, codify processes to identify which credentials are valued by employers, and establish data-sharing agreements between state and credentialing agencies. Schools must improve alignment between CTE offerings and workforce demands. Businesses should better their employer signaling by clarifying the required credentials and skills needed for jobs. And credentialing entities should provide data that can be used to improve program quality—such as attempts to earn credentials, raw scores on credentialing assessments, employee placement, and wages.
In the coming months, the two authoring organizations plan to continue their partnership and add to their research. In the meantime, policymakers and advocates would be wise to give their report—and interactive website—a close look.
SOURCE: “Credentials Matter,” ExcelinEd and Burning Glass Technologies (May 2019).
