A World of Transformation: Moving from Degrees to Skills-Based Alternative Credentials

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Author
Lim, JungKyu Rhys;
Cardenas Navia, Isabel;
Elzey, Karen
Date
Jun 2022
Postsecondary education is undergoing a period of profound change. One of the most significant changes is the emergence of skills-based, non-degree, alternative credentials as both complements and alternatives to traditional degrees. Several factors have combined to favor these shorter, less expensive, and more versatile ways to gain knowledge and skills for work. The factors include the rigidity and high cost of traditional degrees; the fact that traditional institutions are failing to equip many graduates with the skills they need; and the need to rapidly upskill and reskill workers to meet the increasingly complex demands of modern economies. This report summarizes evidence suggesting a decrease in the value of degrees as a signaling mechanism in the labor market. It also identifies the benefits of alternative, non-degree credentials and makes recommendations on ways to increase their value and acceptance in the market. It remains to be seen whether non-degree alternative credentials are a short-term strategy to close the skills gaps and deal with the transition to adaptive and qualified labor, or a permanent strategy of human capital development.