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ReportOUT Volume #5

This volume of ReportOUT focuses on the accelerating adoption of digital badges and micro certifications and its impact on employers and prospective employees. But the long view of education and the dilution of undergraduate degrees, argues for a significant increase in the use of micro-certifications in technical and soft skills. It’s not that the “non-degree” credentials are rare; more than a quarter of the employed U.S. population holds a license or certification, on top of any degrees they may hold. Certifications can be precisely tuned to industry needs, and they hold the promise of reducing the need for employers to rely on imperfect proxies, like college degrees. In certain occupations, certifications outline career ladders that define industries and give employers and job seekers alike guidance about what skills are necessary to advance. Those occupations, however, are the exception, and if the nation is to close the skills gap, perhaps they should become the norm. This volume of ReportOUT focuses on the accelerating adoption of digital badges and micro certifications and its impact on employers and prospective employees. But the long view of education and the dilution of undergraduate degrees, argues for a significant increase in the use of micro-certifications in technical and soft skills. It’s not that the “non-degree” credentials are rare; more than a quarter of the employed U.S. population holds a license or certification, on top of any degrees they may hold. Certifications can be precisely tuned to industry needs, and they hold the promise of reducing the need for employers to rely on imperfect proxies, like college degrees. In certain occupations, certifications outline career ladders that define industries and give employers and job seekers alike guidance about what skills are necessary to advance. Those occupations, however, are the exception, and if the nation is to close the skills gap, perhaps they should become the norm.

Summary of Findings:
The impact of certifications is potent but narrow, with employer demand confined to a handful of certifications.

• In fact, the top 50 certifications account for two-thirds of all requests in job postings.
• In career fields that value certifications, they carry a significant salary premium (as much as 18% in our sample).
• Certifications fall into two broad categories, each with its own distinct impact: Door Openers, which help new labor market entrants enter a field; and Career Escalators, which pave the path for experienced workers’ upward mobility.
• Certifications are most likely to gain market acceptance when they validate hard-to fill skills or readiness for hard-to-fill jobs, thereby providing a signaling mechanism in markets where employers have struggled to find qualified talent.
• While certifications struggle to gain acceptance in many corners of the job market, we find that, in others, there are indications of under-supply – that is, occupations for which employers struggle to fill jobs despite routinely seeking certificated workers.
• Across sectors, there are particular occupations which show signs of being ripe for broader adoption of certification regimes.
• Even though employers struggle to find workers with adequate foundational or “soft” skills, these skill areas have resisted certification, likely because there is no common agreement on how to define or measure them or because such skills are best assessed within the context of a particular occupation rather than in isolation.

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