Employers Claim to Value Alternative Credentials. Do Their Practices Match Their Promises?

Employers Claim to Value Alternative Credentials. Do Their Practices Match Their Promises?

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There’s plenty of interest among workforce experts about the potential of alternative credentials—like certificates, badges and apprenticeships—to help more people find better jobs without necessarily having to go to college.

But in order for that to actually work, employers have to value those credentials. Many company leaders say that they do, as part of their efforts to reward skills, not just degrees. And some employers even issue their own credentials, like IBM and Google.

Yet all that rhetoric hinges on the moment when a resume lands on the desk of a hiring manager. How will he or she react to an application that has an alternative credential instead of a college degree? And what’s to say such a resume will even end up in the consideration pile?

New research published this week by the Society for Human Resource Management aims to address those questions. The survey and the experiment’s findings show that even though executives say they support alternative credentials, the practices and attitudes of mid-level managers and HR professionals do not always value these upstart certifications.

This calls into question the value alternative credentials have for job seekers. And that has implications for higher ed providers trying to promote non-degree programs as a way for people to get ahead in the workforce, as well as for government officials considering how to hold job-training programs accountable for student outcomes.

Disconnect Between C-Suite and Hiring Managers

In the summer of 2021, the Society for Human Resource Management surveyed 500 executives, 1,200 supervisors, 1,129 human resource professionals, and 1,525 workers who don’t supervise other employees about their attitudes toward alternative credentials. The results suggest there is a disconnect between what company leaders believe and the opinions of the managers and HR professionals who are actually responsible for hiring.

When asked whether alternative credentials have value for employee development, the overwhelming majority of executives, supervisors and HR professionals said yes. When asked whether alternative credentials help workers gain credibility, more than two-thirds of each group agreed.

But the three groups were not in accord about whether workers with alternative credentials are better performers. While 70 percent of executives said yes, only 53 percent of supervisors and only 31 percent of HR professionals agreed.

Supervisors and HR professionals were also more muted in their appreciation of alternative credentials compared to traditional college degrees:

  • Among executives, 61 percent said they place high value on traditional degrees, compared to 50 percent saying the same for alternative credentials.
  • That disparity widened among supervisors: 49 percent placed high value on traditional degrees and 28 percent placed high value on alternative credentials.
  • And it widened further among HR professionals: 54 percent assigned high value to traditional degrees and just 15 percent assigned high value to alternative credentials.
  • Although 71 percent of executives said certain alternative credentials equate to a bachelor’s degree, only 58 percent of supervisors and 36 percent of HR professionals agreed.

When asked to rank the importance of alternative credentials during hiring decisions, executives put them in sixth place (behind experience, education, listed skills, work history and interview performance), while supervisors ranked them 10th and HR professionals ranked them 11th.

For a job seeker, impressing an HR manager or a potential supervisor matters a lot. But even before an application finds its way to a human, it often has to pass through an automated screening process. And that could be another hurdle for folks who have alternative credentials. The report found that 45 percent of HR professionals use automated screening systems to review job applicant resumes—and only 32 percent of those systems recognize alternative credentials.

Putting Alternative Credentials to the Test

Asking people about their beliefs doesn’t always yield insight about how they act. So the Society for Human Resource Management designed an experiment to see how hiring managers and HR professionals evaluate resumes with varying college degrees and/or alternative credentials.

The association presented 1,530 hiring managers and 1,848 HR professionals with ads for four different job roles—customer service supervisor, marketing specialist, data analyst and senior project manager—for which a bachelor’s degree was either required or preferred, or only a high school diploma required. The evaluators also received resumes from “applicants” who had varying levels of education (high school, associate degree, bachelor’s degree) and either an alternative credential or no alternative credential.

In several cases, evaluators ranked applicants who had alternative credentials as more qualified, more skilled, less likely to need training and more deserving of higher salary offers than their peers who didn’t have alternative credentials.

But in most cases, applicants who had a traditional degree had a bigger advantage than their counterparts with alternative credentials. That was especially true when the job ads had strict degree requirements—a standard which the hiring managers and HR professionals in the experiment typically endorsed.

As the report explains, “Traditional degrees make for easy rules of thumb when hiring decision makers need to pare down large applicant pools.”

Changing Minds—and Hiring Practices

These human attitudes and actions—and automated screening practices—matter because a significant share of workers are investing time and money in attaining alternative credentials.

Nearly half of workers surveyed said they have one, according to research from the Society for Human Resource Management. And organization leaders run across alternative credentials pretty often: 90 percent of executives, 81 percent of supervisors and 77 percent of HR professionals say they encounter applicants who hold them “at least sometimes.”

So what’s preventing supervisors and HR professionals from more fully embracing all these certificates, badges and apprenticeships? The research identified several refrains.

One common concern among managers is that it’s not always clear what skills alternative credentials convey, nor how employers should evaluate those skills. Another worry is that quality is too varied among the nearly 1 million unique credentials that are available for workers to earn. HR professionals who are actually responsible for hiring tend to value clear signs of credential quality, the report states, such as exams that must be passed to earn them, real work experience that they require, or endorsements from industry organizations that have strong reputations.

One of the purported benefits of alternative credentials is that they can make workplaces more diverse, equitable and inclusive. But executives and HR professionals don’t seem to be on the same page about that.

When asked if recognizing alternative credentials would help their organizations hire more-diverse candidates, 79 percent of executives and 74 percent of supervisors agreed—compared to 55 percent of HR professionals. An even wider gap opened up when those three groups were asked whether recognizing alternative credentials would lead to more diversity in company leadership. While 78 percent of executives and 71 percent of supervisors thought yes, only 46 percent of HR professionals agreed.

Addressing these concerns and disparate attitudes will be essential to making alternative credentials more viable on the job market, the research concludes.

In a set of recommendations for how employers can make progress toward that goal, the Society for Human Resource Management suggests companies train supervisors and HR professionals to value alternative credentials; create better methods of screening applications for badges and certificates; rethink job descriptions; and compile lists of approved and most-desired credentials for job candidates.



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