Reverse Engineering Digital Credentials: How Employer-Driven Demand Can Close the Skills Gap

The “skills gap” has become a popular term to describe a labor market in which job applicants lack the skills that employers demand, leaving graduates without jobs and employers without qualified employees. A recurring theme when discussing this skills gap is that employers would be more successful with finding and onboarding talent if they were better able to articulate and signal the skills and competencies they require of qualified applicants. But, a lack of insight into the specifics around what employers need—especially from one employer to the next, often within the same industry—can make the business of higher education challenging, and contribute to what the supply side of the skills gap (and prospective employees) sometimes characterizes as a moving target.

As the business environment grows more dynamic, this gap is only likely to grow. As employers reorganize their workforce to optimize for different and new skills, the shelf life of skills will become shorter and shorter, putting additional pressure on training organizations to keep up.

While the skills gap may result from the disparity between the skills that are taught and sought, it may also be attributed to differences in how those skills are communicated. Today, employers try to divine skills from opaque degrees and self-reported experiences that applicants include on their resumes, while prospective employees try to figure out how to position themselves based on a generic job description that often relies on a proxy of experience for skills.

An increased focus by both schools and employers on specific knowledge, skills and competencies offers an opportunity to achieve the mythical “Rosetta Stone” that enables employers and prospective employees to communicate in the same language. We may be at a tipping point where employer demand creates a new and robust marketplace of competency-based credentials that can interface with employer HR systems and processes.

We are already seeing the first evidence. A cadre of savvy companies and organizations are using the process of creating digital credentials to identify the unique skills and competencies that they require – and sending a clear signal to the market and creating a pathway for would-be employees and aspiring executives.

A cadre of savvy companies and organizations are using the process of creating digital credentials to identify the unique skills and competencies that they require – and sending a clear signal to the market and creating a pathway for would-be employees and aspiring executives.

Snapshot: Advanced Manufacturing Companies and the Colorado Community College System (CCCS)

Faced with a shortage of 15,000 qualified workers in advanced manufacturing, Colorado manufacturers approached the Colorado Community College System four years ago to bridge this gap. Together, CCCS teamed up with local employers to define a set of critical competencies required by prospective hires in the advanced manufacturing industry. As students at CCCS demonstrate these competencies, they earn a standardized, portable digital badge readily consumable by the industry that helped to create them. The approach has been recognized for meeting a high standard in both industry and the academic settings of the 13 colleges within the system.

Under the leadership of instructional design project manager Brenda Perea and Provost of Academic Affairs Dr. William Tammone, CCCS has issued hundreds of badges and garnered tens of thousands of interactions verifying the skill data the credentials contain. Jobs are now being filled in the state by pinpointing the CCCS learners who have exactly the verified competencies needed for those positions. The program has been so successful that area employers such as Bal Seal and Cemex have used the CCCS training directors to co-develop training and workforce-centered digital badges. The program’s success has proven contagious and what started in advanced manufacturing has expanded to allied health with plans for further expansion in place. You can read a detailed case study of CCCS here.

Snapshot: American Medical Certification Association (AMCA)

Associations that connect industry and specialized workforces are contributing to the harmonization effort as well. To fulfill their unique role in serving employees and service providers, associations must “see around corners” within particular industries to best prepare their membership for success. By adopting digital badges, the American Medical Certification Association, which provides medical certifications for students at over 241 schools across the United States, shifted from two-dimensional paper certifications to portable, digital and verified credentials that carry detailed information about the specific competency or skill demonstrated. The achievements recognized reflect market demands and help distinguish AMCA-certified students in areas like EKG Technician, Electronic Health Record management, and phlebotomy. The third-party verified achievements can be shared on professional and social platforms, which empowers members to promote themselves and their qualifications with confidence and precision and allows employers to discover them through targeted skill search.

These initiatives represent a strong start to bridging the skills gap, and highlight the potential of digital credentials to help employers and potential employees communicate using a common language. Organizations like the U.S. Chamber of Commerce Foundation will continue to coordinate within the business community to develop more precise, widespread definitions of targeted skills to help address the interoperability challenges between employer HR systems and supply side transcript and credentialing systems.

The promise of developing shared standards and a shared language for how we communicate our competencies and skills is the promise of connecting the right talent, to the right job, at the right time.