Insights interview: the acceleration of digital credentialing and why you should plan for it

What’s the purpose of this interview and who’s it for?

COVID-19 is accelerating the growth of digital credentialing. As an edtech leader, are you tracking this trend to inform your strategy and roadmap?

Think about the steady changes that have been underway in higher education and the job market for some time, but that have exploded this year:

COVID-19 has collapsed students’ enriching college experience to a suite of online courses. Students are dropping out at an alarming rate and those that remain are reasonably questioning the premium price and considering other options. How can colleges demonstrate the premium value of their degrees for employability to attract and retain students in 2021 and beyond? (I have previously blogged about how colleges need to reinvent the experiences they offer.)

COVID-19 has also shattered many businesses and created the frothiest job market since perhaps World War II. How can employers efficiently and objectively identify talent with the right skills? And, how can students stand out from the crowd and demonstrate those proficiencies?

These are just two of the seismic changes that are accelerating the supply of and demand for digital credentialing and creating opportunities for innovative companies—but there are many more.

Why Jarin Schmidt?

To better understand these changes and the opportunities they’re creating, I hopped on a Zoom to interview Jarin Schmidt, the Chief Experience Officer at Credly—a leading enabler of “verified skills.” Jarin was an early pioneer in anticipating the future value of digital credentials. I had the privilege of first working with him a decade ago. I remember vividly that in a sea of edtech hyperbole, Jarin stood out as a beacon of clarity—focused on improving a fundamental supply-and-demand problem of employable skills and in the process creating a paradigm change for how academic institutions, students, and employers think about teaching, verifying, and communicating skills.

The interview

Good morning, Jarin. Thank you so much for making time for this interview—especially when Credly’s service is so in demand. As you know, I help edtech startups and mature education companies to anticipate new market opportunities and grow. With that audience in mind, and given your pioneering career in digital credentialing, I wanted to explore with you six questions where I think your insights would be very valuable:

1. How can digital credentials demonstrate the value and relevance of a college education?
2. What role will digital credentials play in the increasingly competitive online program market?
3. What role can digital credentials serve for students to demonstrate their employability?
4. How should edtechs think about “engineering for credentialing”?
5. How will digital credentials evolve in higher education?
6. How are digital credentials changing Corporate L&D?

Does that sound OK?

Hey Adam, thanks for inviting me. Yes, those sound like great topics to explore. Fire away!

1. How can digital credentials demonstrate the value and relevance of a college education?

COVID-19 has accelerated the pressure for higher-education institutions to show the value of a premium-priced college experience. What role do you think microcredentials can play demonstrating value going forwards?

Microcredentials will play an essential role in bringing HED institutions and employers together, as the line between where recognized learning occurs continues to blur. We’re already seeing productive partnerships between institutions and employers, such as between IBM and Northeastern University—where IBM digital credentials are accepted towards college credit—and Santa Barbara City College and local employers—who are working together to identify and address skill gaps in the local workforce. We often state that the communication gap is just as pressing as the skills gap. Getting employers, training providers, and academic institutions to speak the same language of skills and skill proficiency is critical. 

Which types of colleges do you see making the fastest progress embedding credentialing and why?

It’s not necessarily the types of colleges that we see making the fastest progress—it’s the programs within a college. Curricula focused on digital literacy or products/technology are definitely more likely to embrace credentials that clearly define what was learned and why it is relevant. Typically the continuing education department within a college is the most agile and able to identify changing skill needs from employers and to launch digital credentials in response.

How has this changed how those colleges attract, engage, and retain students?

• A digital credential platform like Credly—which provides robust analytics and reporting—shows administrators where a student is on their learning path based on the credentials they have earned. This information helps guide marketing efforts, such as recommending the next course in a series that leads to a certificate, or simply checking in with a student who may appear to have stalled out on a specific learning path.
• Digital credentials can also help institutions identify and build learning networks of students who have all earned similar badges, which creates a unique engagement opportunity.
• When it comes to an organization’s ability to attract, engage and retain learners, our credential issuers report everything from very significant increases in course completion rates, drastic increases in exam volumes, and—even more telling—increased loyalty to the credential-issuing organization itself.

How does embedding credentialing change how colleges think about what courses they offer and how they design and deliver those courses?

• Pairing learning outcomes with digital credentials provides higher ed institutions with something that every organization needs in order to be agile in their decision-making: data. Data derived from a digital credential program can help an institution determine if the underlying skills within their programs are aligned to what employers are demanding. They can better understand how relevant their course outcomes are now and will be in the future as needs shift in the labor market. They can then more quickly respond to those changing needs by updating or revising their course content and offering real-time recognition with digital credentials.
• Implementing a digital credentialing program also changes the perspective for institutions. Instead of thinking about the syllabus or the student, they incorporate the needs of employers as well.

2. What role will digital credentials play in the increasingly competitive online program market?

Covid has forced HED colleges to offer online courses. Post Covid, I expect many will continue to offer online courses as part of their portfolio. What role do you see credentialing playing in future online programs for the college as a provider? For the student as a consumer?

I think the biggest impact this will have is being able to receive value from learning events regardless of the granularity. The days of having to complete an entire program, perhaps even an entire course, before you can signal your skills to the market will be a significant shift. I also think that credentialing will get us closer to questions around efficacy. Knowing how and where credentials are used, because they are digital will ultimately provide new feedback loops to everyone in the ecosystem: Students, Institutions, and Employers.

Similarly, what role do you see credentialing playing for Coursera and other providers of online-only courses?

Credentialing will be critical for online training providers because the dramatic increase in access and options will require new levels of transparency. We are moving away from monolithic proxies for skills and competencies (i.e. a single degree) and instead uniquely rolling up numerous datapoints to infer skills and competencies. For example, it is one thing to list a series of skills that someone validates, learns, or is exposed to within a course, but it is an entirely different scenario to understand proficiency. Digital credentials will give a consistent approach to both listing skills and inferring proficiency through documenting the activities used to teach or validate the skills.

3. What role can digital credentials serve for students to demonstrate their employability?

Do you think there’s a gap in the skills employees need and students have leaving US higher education? Or a lack of ability for students to show that what they’ve learned is relevant? Or, both?

• I would definitely say both, which is why we’re seeing more and more employers trend toward skills-based hiring, as opposed to relying on traditional proxies like college degrees.
• According to recent surveys, 62% of American workers now strongly prefer non-degree and skills-based training over degree programs. In fact, those who go that route are reportedly happy with their decision—49% of U.S. workers with a high school degree and a skills-based professional certification say they are in good jobs.
• Employers are looking for more granular evidence of skills and capabilities of potential employees. Plus, skills-based hiring levels the playing field among prospective job candidates, reducing areas of bias and increasing opportunities for inclusion.

What role does credentialing play in closing this gap?

Digital credentials already serve two important roles within this context:

• They provide the common language framework for institutions and employers to use when communicating with one another.
• They also serve as skills currency, which students can spend over and over with employers.

4. How should edtechs think about “engineering for credentialing”?

Should edtech entrepreneurs creating a next generation of HED products and services be engineering their solution for microcredentials?

I think it is less about whether or not you have checked the box on microcredentials and more about finding ways to clarify the underlying skills/proficiency within a learning experience. Microcredentials provide an excellent option, but is by no means the only one. Also, I think there needs to be a focus on how learning data can be applied in a variety of contexts. Part of the promise of micro-credentials is making them contextually aware so that value and importance of learning can be dynamic based on the application.

How should they think about this for helping colleges? For helping students?

• Digital credentials are a fantastic tool for making sure you are starting with the end in mind. How will you articulate what the student learned or acquired in a way that is relevant to both the student and the employers who will ultimately dictate the value?
• For students, the move to digital credentials provides a future where self-reported data is a thing of the past. Students will be able to quickly provide what they are capable of with context and verification. I think we are just beginning to learn what this efficiency can add to human capital decisions and the ultimate impact it will have on students/professionals.

In which courses are credentially most popular today? Which will grow in the next 5 years?

Product and technology credentials are definitely the early adopters. When the “what you need to know” is a moving target, having consistent documentation around what was learned and how it was assessed is critical. Overtime, I believe “hard skills” will still be the most popular credentials, but I believe “soft” or “critical” skills will be weaved into credentials to create stronger signals.

5. How will digital credentials evolve in higher education?

How do you see credentials changing in the future (in how they’re created, issued, or promoted)? Who will benefit and how? What are the challenges?

• A rising trend that I think will only continue to grow are role-based credentials. Especially in today’s economy, more and more people are going to look for ways to advance their careers along a more direct path. I think the appetite will grow, among students and employers, for clear signals that point from a learning program to a specific job.
• In addition, we will see even more momentum around the ability for students to pursue academic credit for on-the-job learning, recognized by digital credentials. Not only is that good news for students and employers, this can also impact the admissions process within higher ed. In the future, the admissions process itself could be based less on transcripts and credit hours and more on an exchange of competencies and learning outcomes. This new approach could be a game-changer for institutions that are invested in identifying and recruiting students with workforce-ready skills.

6. How are digital credentials changing Corporate L&D?

L&D departments often face challenges creating programs their employees want and engage with. How can credentialing address these problems?

Digital credentials can help employers build out L&D programs that better communicate to employees the potential impact of their learning opportunities. I know I would be a lot more likely to engage with a learning program that had data – both internal to the organization and to the broader job market – that showed me, “Once you have these skills, you’ll be more qualified and marketable for these new career opportunities.”

How does credentialing help with employee retention? Do you come across perceptions that employer-agnostic credentialing may make an employee more likely to be poached?

• The idea that, “If I train my employees, they will leave,” is an outdated one. In fact, research shows that employees are more likely to leave an employer that doesn’t provide learning and growth opportunities. Employers interested in keeping their talent can’t afford to not create a culture of learning and recognition within their organization.
• It’s been well-documented that it’s more cost effective to hire and promote from within an organization than to recruit, hire and train an external candidate. Verified digital credentials are the best way for an employer to identify talent already within the organization.
• By building an L&D program based on digital credentials, you’re not only signaling to employees that you care about their career growth, you’re also creating the infrastructure for identifying which skills your organization has now and which skills it needs for the future.

How does credentialing change the dynamic of growing talent within an organization?

Digital credentialing can make talent growth and development an interactive flow between employer and employee. If an employer can identify the range of skills an employee has and where they were gained, it’s easier to figure out how and where best to use them across an organization.

Jarin, this has been fantastic. Thank you so much for your rasor-sharp answers and insights.

Thank you for taking the time to learn more about digital credentials and what we are up to at Credly. I truly believe that this simple concept of documenting what someone is capable of and giving them control over where and when it gets displayed without sacrificing context and verification is critical for developing professionals in this day and age. Any opportunities to tell that story is greatly appreciated!

Takeaways

Jarin provides many lucid insights into why, where, and how digital credentialing is accelerating. In my role advising edtech companies about growth opportunities, I parse these insights out into two buckets:

How to understand the growing value of digital credentials:

1. Transparency: “The communication gap is as pressing as the skills gap.” Digital credentials provide a common language of skills and skill proficiency between employers, academic institutions, and students.
2. Feedback for better program and course design: through transparency and a common language, digital credentials enable market- and data-driven feedback about the skills employers are seeking, institutions’ programs are providing, and students are gaining to help adjust education programs, their design, relevance, efficacy, and value.
3. Dynamic college and career pathways: when digital credentials are paired with learning outcomes, they provide institutions with a more robust way to track a student’s progress and guide efficient college and career pathways that lead to higher retention, completion, and exam volumes.
4. Proficiency and context: digital credentials provide a consistent framework for defining a skill and inferring a student’s proficiency by rolling up all activities used to teach and validate the skill in (ideally) a variety of contexts.
5. A tool for leveling hiring: digital credentials facilitate skills-based hiring which is more objective, reduces bias, and increases inclusivity. These are growing trends and indeed expectations.

Where and how to enable digital credentials in your product or service:

1. The DNA of competitive online programs: if you are an OPM (online program management) provider to universities or provide online courses and programs yourself and are not already engineering digital credentials into your capabilities and courses, you should seriously consider this now as the competition accelerates in your markets. Digital credentials will be critical for you to demonstrate the value of your programs and communicate this in a way that’s recognized and understandable to your market.
2. Outcomes-driven design: enabling micro-credentialing starts with outcome-driven design—defining the skills and proficiencies you are trying to deliver, and engineering your experience to teach and assess these. Looking further out, try to capture the context in which that skill was acquired. 
3. Data transparency and APIs: ensure you are capturing sufficiently rich data for 2. (while following best practice on data privacy) to allow future opportunities where you roll up that data to report skills and a student’s proficiency in a variety of ways, and build APIs to enable external validation or reporting.

If you want a fast, experienced, and incisive assessment of your business strategy and edtech roadmap and practical recommendations, please contact us today with the form provided below.