Non-Degree Market Tension

MOOCs, bootcamps, certificates, certifications, microcredentials, badges, apprenticeships… there is no denying that prospective postsecondary students have more learning options at their fingertips than ever before. The race to offer shorter, cheaper, and more focused offerings—whether by traditional schools or alternative providers like Udemy and Linkedin Learning—has created a growing web of courses and programs designed to offer non-degree pathways for upskilling, reskilling, and everything in between.

But while Eduventures has tracked evidence of positive consumer response, we have also observed a tension that cannot be ignored.

Prospect Market Response

Eduventures’ Adult Prospect Research™ series tracks the changing motivations and preferences of adult student prospects—the market segment most targeted for upskilling and reskilling opportunities. Over the COVID-19 pandemic it’s clear that degree interest has waned while non-degree interest is in the ascendent.  

Figure 1 tracks desired credentials for both undergraduate and graduate adult prospects from July 2019, a pre-pandemic baseline, through October 2021.

 

Shifting Credential Preferences

Desired CredentialJul-19Jun-20Oct-20Oct-21Change vs. 2019
Undergraduate Adult Prospects
(prospects with an associate degree or below)
Associate28.3%26.7%26.3%25.0%-12%
Bachelor’s28.2%27.6%24.8%26.0%-8%
Non-Degree43.5%45.7%48.9%48.9%12%
Graduate Adult Prospects
(prospects with a bachelor’s degree or above)
Master’s57.8%53.4%52.4%50%-13%
Doctoral/Prof.4.5%3.4%4.2%3.2%-29%
Non-Degree25.1%30.8%25.6%31.6%26%

Figure 1.
Source: Eduventures’ Adult Prospect Research™ Series
Undergraduate Degree Interest Filtered Out for Graduate Prospects

 

As Figure 1 shows, interest in degrees among both undergraduate and graduate adult prospects weakened during the pandemic while interest in non-degree programming increased (non-degree programming includes for-credit/non-credit certificates, for-credit/non-credit courses, and vocational/technical training opportunities). It’s important to note that degrees still command the majority of interest among both groups of prospects—particularly at the graduate level where the master’s degree is dominant.

Similar shifts showing momentum in non-degree interest are evident when isolating “committed” prospects, in other words, those most likely to enroll in the next three years. Should trends continue their current trajectory, degree interest share will continue to erode.

What’s driving this shift? There isn’t one culprit, but certainly the time and cost savings offered by non-degree programs are critical forces at play—particularly in times of economic uncertainty like the early days of the pandemic or now, with 40-year high inflation. Other factors, like the perception of a direct connection between non-degrees and the workforce—something that traditional higher education offerings often have trouble articulating—are also part of the equation.

Developed Tensions

While non-degree credential programs may be enjoying some momentum, it’s not exactly smooth sailing ahead. Employer perceptions of non-degree credentials provides a more muddied perspective. In our recent analysis, two key themes have emerged: market confusion and employer value disconnect.

Market Confusion

The Hechinger Report published an article in December 2021 titled “Credential chaos: Growing “maze” of education credentials is confusing consumers and employers” detailing the market confusion caused by the sprawling web of nearly one million unique education credentials currently in the market. More than half a million of these credentials are non-degree programs including badges, certificates, industry certifications, and similar offerings.

The Hechinger Report notes that consumers and employers alike are tripping over the legitimacy of such offerings—a point made more acute during the pandemic when employers scrambled for workers and consumers looked for alternative education options. Perhaps most illustrative was a quote from the leader of the WallStreetZen, a stock research firm: “There certainly are more and more certification programs every year… unless it’s an actual degree, I can’t accept the certification at face value.”

Employer Value Disconnect

An April 2022 EdSurge article titled, “Employers Claim to Value Alternative Credentials. Do Their Practices Match Their Promises?” describes new research from the Society for Human Resource Management (SHRM) that points to a critical disconnect between the value placed on alternative credentials by executives versus those on the ground hiring talent. SHRM surveyed 500 executives, 1,200 supervisors, and 1,129 human resource (HR) professionals about their attitudes toward alternative credentials. While these groups mostly agreed that alternative credentials hold value for employer development and help workers gain credibility, a clear gap emerged about credential value compared to that of traditional degrees.

Key findings from SHRM included:

  • 61% of executives said they place high value on traditional degrees, compared to 50% saying the same for alternative credentials.
  • 49% of supervisors placed high value on traditional degrees compared to just 28% on alternative credentials.
  • 54% of HR professionals assigned high value to traditional degrees compared to just 15% to alternative credentials.
  • 71% of executives said certain alternative credentials equate to a bachelor’s degree, but only 58% of supervisors and 36% of HR professionals agreed.

HR professionals may eventually follow suit with executives, but how long will this shift take? Certainly not all industries are the same as some hold well-established non-degree programs (e.g., PMP). And it is also important to note that fewer supervisors and HR professionals say they place “high value” even on traditional degrees compared to executives (49% and 54% vs. 61%) implying some skepticism about credentials in general.

The Bottom Line

Interest is rising for non-degree offerings among adult prospects, but those on the front lines of hiring value alternative credentials substantially less than executives. The pure number of offerings has created conditions for market confusion. The latter, if not corrected, certainly has potential to spoil the former.

What can be done? For one, the credential ecosystem defined by UNESCO in its 2018 report “Digital credentialing: implications for the recognition of learning across borders,” needs more time to develop. This ecosystem includes the key elements of use, provide, award, quality assure, evaluate, and verify.

Organizations have stepped in to tackle these elements. Credential Engine and Credly are seeking to provide transparency and validation for these offerings. But this work is still in a relative stage of infancy; Credential Engine’s credential registry so far only holds full or partial information for just 3% of all credentials in the market. Until all elements and stakeholders are aligned in the ecosystem, market confusion and the value debate will continue.

In the short-term, there are things institutions of higher education can and should do to address this market tension. Here are some examples:

  • Ensure non-degree credentials are truly aligned to workforce needs
  • Be transparent about learning outcomes and skills developed through programming
  • Shore up industry partnerships and pipelines
  • Back up success claims with hard data
  • Balance product names (i.e., “badges,” “microcredentials,” “nano degrees,” etc.) with consumer understanding

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Clint Raine

Eduventures Senior Analyst at Encoura
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