The Credential Challenge

Introduction

In today's competitive job market, industry-recognized credentials have become a crucial tool for signaling that students and workers possess the skills necessary to succeed in the workforce. Nearly 1 in 4 job postings requests some kind of non-degree credential, and that figure increases to 1 in 3 for jobs asking for less than a bachelor’s degree. 

States, regions and educational systems are responding to the labor market by incorporating industry credential attainment into learning pathways. Twenty-three states have high school diploma pathways built around career and technical education (CTE), and these pathways often include certifications or make them available to students. 

However, not all industry credentials are created the same way. Some credentials are created at the behest of industry associations, others focus on mastery of a specific tool or technique, and still others are meant to represent general workforce readiness. Credentials vary in how they are acquired, the level of proficiency they represent, and the kinds of organizations that backstop their relevance. Ultimately, in part because of these differences, some credentials are valued by employers and some are not. Yet credentials of all types are promoted within state secondary and postsecondary systems. In some cases, schools and school systems, and postsecondary institutions are promoting credentials and receiving incentives for student acquisition of credentials that are ultimately of little value to employers in the labor market. 

According to the previous research from ExcelinEd and Lightcast, only 18% of credentials earned by K-12 students are in demand by employers. For individual states, that number can be even lower.

The Lightcast Approach

Lightcast has developed a unique methodology to assess the supply-demand alignment between credentials acquired in K-12 and postsecondary education and the demand for credentials from regional employers. These analyses inform the value of credentials to students and the broader economy. Educational institutions across the country use this approach to evaluate the credentials that students are earning. 

The Lightcast process includes:

1. Supply: Gathering, cleaning and calculating credential attainment data from K-12 and postsecondary institutions to create a comprehensive list of credentials offered and the number of credentials earned in a state or region.

2. Demand: Measuring employer demand for these credentials by analyzing how often employers request the credentials in job postings. Lightcast maintains the world’s largest and most up-to-date database of job posting text, scraped daily from over 50,000 unique job boards and employer sites. This analysis includes advertised wages or salaries associated with each credential to ensure they lead to living-wage jobs.

3. Alignment: Assigning each credential to an alignment category based on the relationship between the number of credentials earned (supply) and the average number of annual job postings requiring that credential (demand). Lightcast can also assess the gap and overlap between the skills acquired during credential attainment and the most important skills in the occupations targeted by the credential. 

This approach provides organizations with valuable insights about credentials, answering critical questions like:

• How does our state’s list of promoted industry credentials align with employer demand in our region?

• Which industry credentials lead to high-wage, in-demand jobs?

• Are there credentials that we should reconsider or remove from our list of promoted credentials? 

• Are there credentials requested by employers that are not part of our promoted list and which we should consider adding? 

• Which credentials are undersupplied or oversupplied? 

• Which credentials are part of a career pathway in a critical sector? 

• For credentials leading to low-wage jobs, are there stackable credentials that can put learners on a better pathway?

Keys to Success

Based on our experience conducting credential analyses across the country, a few key factors are essential for success:

• Stakeholder Alignment: Ensuring all stakeholders are aligned on a common understanding and definition of a high-quality credential is critical for productive collaboration and evaluation.

• Accurate and Consistent Data: Reliable student-level credential attainment data is the foundation of a successful analysis. It is vital that institutions at both the K-12 and postsecondary level report credentialing information consistently and accurately to track trends and make informed decisions.

• Labor Market Signal Integration: Regularly incorporating labor market signals into the ongoing validation of credentials helps ensure that they remain relevant in an ever-evolving job market.

• Creating Stackable Credential Pathways: For credentials in demand but linked to lower-wage jobs, building pathways to additional, stackable credentials can elevate the value of the credential and improve long-term career outcomes for workers.

Case Study: ExcelinEd

One of our most impactful collaborations has been with ExcelinEd, a 501(c)(3) organization that supports state leaders in transforming education to unlock lifelong success for every child. Our joint flagship project, Credentials Matter, was the first large-scale analysis to examine how the industry credentials earned by K-12 and postsecondary students align with real-world employer demand.

“Understanding alignment between credentials earned and industry demand is important because U.S. employers often struggle to find qualified applicants in many career sectors,” said Adriana Harrington Managing Director of Policy at ExcelinEd. The project included a website and a series of reports, underpinned by the most extensive collection and analysis of supply, demand, and alignment data on industry-recognized credentials earned in states. Check it out at credentialsmatter.org. 

Since then, we’ve partnered with ExcelinEd on deep-dive industry credential analyses for states like Ohio and Tennessee, providing actionable data that ExcelinEd is using to inform their education and workforce development strategies.

Conclusion

As credentialing continues to be a key differentiator in workforce development, it’s essential to understand which industry credentials hold value and how they align with employer needs. If you’re interested in evaluating the credentials in your state, region, or educational system, Lightcast is ready to help. Let’s work together to ensure that the credentials offered in your area truly prepare students for the high-quality jobs they deserve.