How institutions are leaving money on the table with their alternative credential offerings

"Challenges were noted in understanding employer competencies and aligning offerings accordingly," read the report. "Employers' perception of slow response time was also acknowledged."

Alternative non-degree credentials are slowly becoming higher education’s hottest learning modality. Enrollment is strong and employer buy-in is promising. However, two reports from UPCEA demonstrate that despite institutions’ increased infrastructure to provide these academic programs, challenges persist—and they’re leaving money on the table as a result.

In a December 2023 report that studied nearly 100 UPCEA members representing institutions focused on online and continuing education, 94% said their institution offers alternative credentials, and 66% said senior leadership has become fundamental to their institutions’ strategic plans. These schools’ most common alternative credentials were non-credit certificates, professional certificates and digital badges.

Stackable credentials are becoming a hybrid choice that can be used toward credit and non-credit-bearing programs. Learners can “stack” their credentials toward specific, lengthier programs. The most common types of alternative credentials to be both credit and non-credit-bearing are professional certificates and badges. Large institutions, which have over 15,000 undergraduate and graduate students, were the most likely to provide stackable credentials.

More than half of the surveyed members said they have a consistent process for developing alternative credentials, and the likelihood that a school standardizes its practices correlates to how long they’ve been offering them. Specifically, 64% of schools that have offered these programs for three to five years have a standardized practice. Moreover, accreditation bodies are beginning to join the fold to help legitimize their recognition.

The survey also suggests that these institutions have strong relationships with employers when creating these programs; 65% said they involve outside entities. Bootcamps, badges and professional certificates are the most popular alternative credentials for employers to collaborate on.

However, two glaring issues exist with the institutions’ alternative credential implementations. UPCEA members’ credential programming and financial models are decentralized across the institution. Although they believed their models were sustainable, 74% said they didn’t know the amount of revenue they generated, and more than half said they didn’t have a consistent tuition pricing model. This can be due to the different kinds of business models offered to different kinds of alternative credentials.

Secondly, while UPCEA members said employers were involved, the report conceded that there were significant barriers to effective collaboration.

“Challenges were noted in understanding employer competencies and aligning offerings accordingly,” read the report. “Employers’ perception of slow response time was also acknowledged.”

These friction points may contribute to some worrying data points registered by employers in UPCEA’s January 2024 report created in collaboration with Collegis Education, an edtech company.

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Employer collaboration on alternative credentials is falling off

The second UPCEA report surveyed over 500 employers and found that 61% of employers without external training partnerships are interested in developing them. Companies are most likely interested in upskilling their employees due to emerging technologies like AI reshaping the workplace.

Despite this well of opportunity for higher education to capitalize on offering employee development opportunities, company-higher education partnerships are falling off and are losing ground to private providers. In their 2022 study, UPCEA identified that 49% of organizations collaborated with four-year colleges and universities for employee training and professional development. However, this figure decreased to 40% in 2023.

Here are some of the employers’ biggest gripes with partnering with institutions.

  • Partnerships are too expensive (37%).
  • Lack of real-world application (25%)
  • Slow turnaround (22%)
  • Inconsistent quality (22%)
  • Infrequency of delivery (22%)
Alcino Donadel
Alcino Donadel
Alcino Donadel is a UB staff writer and first-generation journalism graduate from the University of Florida. His beats have ranged from Gainesville's city development, music scene and regional little league sports divisions. He has triple citizenship from the U.S., Ecuador and Brazil.

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