Four Advantages of Certifications as Alternative Credentials

Young woman focused in school and studying to complete her certification as an alternative credential.

Obtaining new credentials is a common strategy for workers looking to reskill in advance of a career change or re-employment following a layoff. Increasingly, individuals are seeking credentials, such as certificates, certifications, and badges, in order to maximize their marketability to employers or advance within their current position. 

While individuals with traditional bachelor’s degrees have always enjoyed a substantial wage premium, significant resources are required to pursue a four-year degree (both in terms of time and money), making degrees impractical for individuals who seek rapid reskilling and/or re-employment. This is one of many factors that is increasingly driving individuals to seek out non-degree or alternative credentials.  

In particular, certifications offer a potential alternative to degrees that sidestep some of their disadvantages. Certifications are competency-based credentials rather than time-based, allowing many of them to be obtained relatively quickly. This makes them attractive to workers looking to change careers or re-enter the labor market.  

Moreover, certifications tend to be relatively low in costs and available simultaneously to entry-level and experienced workers, which makes them appealing to a cross-section of the workforce.  

Although they can be obtained as stand-alone credentials, certifications can also complement degrees, certificates, and training programs, all of which are awarded based on the successful completion of a specified program of study.

What Advantages Do Certifications Offer? 

1. Certifications can yield a quick return on investment

This versatility makes certifications particularly attractive to policymakers and workforce professionals looking to funnel unemployed and underemployed workers toward credentials likely to yield a quick return-on-investment (ROI).  

In cases where an individual already possesses deep knowledge of the topics that are assessed by a certification exam, a new certification can be leveraged in the labor market in a matter of days or weeks, rather than taking months or years out of the labor market to complete a degree or credit-based certificate program. 

2. Certifications support a model which makes competencies the “currency” of labor markets 

Certifications also have the power to make competencies – rather than credentials themselves – the “currency” of labor markets. In so doing, certifications are likely to be useful tools for increasing labor-market equity and opportunity for individuals with different educational backgrounds and addressing the worker re-employment, reskilling, and retraining challenges as a result of the pandemic and which will likely continue in the anticipated post-pandemic labor market.  

3. Certifications have internationally established standards for quality 

Certifications are also a credential with an established process for quality assessment through the accreditation of certification bodies and their certifications to an international standard. This industry-wide standardized criterion may be a key factor to support the strong market-value of professional certifications.  

ISO/IEC 17024:2012 – Conformity Assessment—General requirements for bodies operating certification of persons is a well-known standard governing certifications. A global standard for quality, ISO/IEC 17024 outlines a series of requirements for certification that are accepted internationally.  

Certifications that meet accreditation standards are widely accepted by government agencies and employers as quality alternative credentials, in part because the standards require industry subject-matter experts to be involved in the development of the curriculum, assessment development, and the competencies validated by the assessment. This internationally-recognized, standards-based approach means that accredited certifications can be trusted by employers to meet or exceed standards focused on ensuring good governance of a certification body and valid and reliable assessment of the competencies being tested.

4. Certifications can support goals for economic opportunity and workforce equity 

Certifications can add significant value for their holders due to their ability to signal competencies and support rapid reskilling and re-employment. These characteristics make a compelling argument for workers and policymakers to strongly consider how certifications can support their goals for economic opportunity and bring more equity to the workforce. 

The Need to Invest in Knowledge About Certifications 

Although there is a considerable base of knowledge on the value of certifications, there is still much that remains unknown. In order to more effectively promote and efficiently use certifications to improve the labor-market participation and progression of workers, a significant investment needs to be made in research on the role, function, and economic value of certifications in the workforce

For example, we know little about the value of individual certifications and how that value differs depending on one’s individual circumstances. Much work remains to be done to identify those certifications that offer the shortest route to well-paying employment opportunities for displaced and disadvantaged workers.  

However, the potential payoff associated with improving our knowledge of certifications is substantial, and will only increase in times of career-switching and technological advancement, as we anticipate in the future.  

While certifications are only one of the many forms of non-degree, alternative credentials, they provide an example of processes to build trust, transparency, and ROI, which is relevant to other alternative credentials. Moving forward, there is no doubt more knowledge is needed to increase the value and use of these credentials. 

For more information, check the IDB and Workcred’s latest publication A World of Transformation: Moving from Degrees to Skills-Based Alternative Credentials. The publication outlines the multiple reasons that individuals and employers are increasing their use of non-degree, alternative credentials in hiring and advancement. It also describes the different types of non-degree credentials and what they might signal to employers. 

Also, read How Can Alternative Credentials Help Close the Skills Gap?, the first entry of these series here. Learn more from IDB’s co-publication with Workcred “A World of Transformation: Moving from Degrees to Skills-Based Alternative Credentials.” Watch the webinar and panel discussion with experts from OECD, Google, Coursera, Laboratoria, and Tec de Monterrey, and stay tuned and follow the IDB blog series on education, economic opportunities, and #skills21.

Four Advantages of Certifications as Alternative Credentials” was first published by Inter-American Development Bank (“IDB”) on the “Education In Focus” blog and was republished here with permission.

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