Microcredentials on the Rise, but Not at Colleges

As the pool of traditional-age students shrinks, colleges are increasingly turning to nondegree credentials to expand the appeal of their academic offerings to working adults. At the same time, an increasing number of employers want their employees to be able to upskill and reskill through microcredential programs.

But four-year institutions are lagging behind third-party providers, such as LinkedIn Learning and Coursera, in their efforts to create employer partnerships, according to a new report released Tuesday by Collegis Education, an online program support company, and UPCEA, the organization previously known as the University Professional and Continuing Education Association.

In 2023, 40 percent of organizations surveyed had partnerships or relationships with four-year colleges and universities, which was a nine-percentage-point drop compared to the previous year’s inaugural survey. Partnerships between employers and LinkedIn Learning, however, rose from 44 percent in 2022 to 52 percent in 2023.

For colleges trying to survive in a tight enrollment market, those elusive employee partnerships are critical for generating new revenue from microcredentials.

“Each microcredential head count has a shorter duration than a degree [program], and each enrollment brings in less revenue than a degree,” said Tracy Chapman, chief academic officer of Collegis. “Therefore, to realize meaningful increases in head count and revenue, institutions need enrollment at scale for these nondegree credentials. A key way to achieve that enrollment at scale is partnering with employers in their area.”

The report, “Unveiling the Employer’s View: An Employer-Centric Approach to Higher Education Partnerships,” analyzed survey responses from a total of 507 hiring professionals at organizations employing anywhere from 100 to more than 5,000 workers.

The survey found that 68 percent of respondents had existing partnerships with external organizations, which increased 14 percentage points between 2022 and 2023. And 61 percent of companies without external training partnerships were interested in developing them.

“What we hear from employers is they want to partner with higher education institutions, but 45 percent of employers in our survey say they’ve never been approached by higher ed,” Chapman said, noting that colleges and universities also want to partner with employers. Figuring out how to bridge the opportunity gap to help institutions connect with employers was one of the primary drivers behind the survey.

The results showed that 98 percent of employers that are already partnered with colleges plan to continue those partnerships, and 77 percent said the institutions were meeting their needs. But employers are often in a time crunch to meet rapidly changing workforce demands.

“They can’t wait, so increasingly they’re going out to third-party providers other than higher ed,” Chapman said.

According to the survey, employers said some of the barriers to establishing partnerships with higher education institutions included cost, lack of real-world application, slow turnaround time to deliver desired content and decentralized contact with the institution.

But “third-party providers are intentionally structured to work with employers,” Chapman said, because they have streamlined processes for communicating with businesses, can quickly customize curricula and can provide data and evidence of the effectiveness of the program.

“That’s work many four-year institutions have not done,” she said. “It’s an opportunity for higher education to rethink how to go to market and work with external constituents when they’re employers versus individual students they’re trying to enroll.”

Another report from UPCEA published earlier this month found that investing in microcredentials isn’t included in many four-year institutions’ strategic priorities. But that needs to change if college leaders want to diversify their revenue streams in an era of frequent college closures and mergers by carving out space in the microcredentials market—and forging the employee partnerships to make it happen, said Bruce Etter, UPCEA’s senior director of research and consulting and co-author of the report released today.

“For those institutions that are thinking about markets beyond the traditional undergraduate student, this is particularly important,” Etter said. “The challenge is how much they want to invest.”

Seventy-three percent of survey respondents said their college partners created customized programs tailored to their organizations. That may seem costly, but if a college can find ways to repurpose that material, “the value goes well beyond that individual relationship with just one employer,” Etter said.

Shawn VanDerziel, president and CEO of the National Association of Colleges and Employers, said it should be an imperative for four-year colleges to partner with industry leaders to better understand how they can meet workforce demands.

He said the established reputations of many colleges “as trusted sources of knowledge, skill and technical preparations,” could be an asset if they brought microcredentials to market at a greater scale.

“More people would probably take advantage of them and more companies would probably take advantage of them because, generally, the public understands the rigor of the content,” he said.

VanDerziel added that four-year institutions should look to community colleges as models. They “have been doing this for a very long time and done it very successfully by partnering with industries to bring skills into the classrooms.”

Community colleges also experienced a seven-percentage-point dip (from 45 percent to 38 percent between 2022 and 2023) in training partnerships with employers, according to the survey.

Shalin Jyotishi, senior adviser on education, labor and the future of work for New America, an education policy think tank, also sees potential for partnerships between four-year and two-year colleges to expand higher education’s presence in the microcredential market.

“Oftentimes community colleges lack the technology infrastructure and the capacity to bring those offerings to scale for large corporations,” Jyotishi said. “Two-year and four-year institutions have partnership precedents for transfer pathways. It’s time to bring that same precedent to microcredentials and workforce development.”