What to watch as interest grows in alternative paths to jobs

Will new hiring models open doors to well-paying and satisfying careers? Or will they track some groups into unstable, low-wage jobs?

This week is a temperature check on the rise of alternative pathways to jobs, featuring short takes from several experts. Also retroactive Pell Grants and a Labor Department official to watch. (To get this newsletter in your inbox, sign up here.)

Leveling the Playing Field

Consumer interest in alternative credentials is on the rise. And a growing number of employers are offering their own credentials or talking about looking beyond college degrees with skills-based hiring.

Yet research and data on this potential “parallel higher education system” is woefully inadequate, according to Sean Gallagher and Holly Zanville, two experts on the space.

“Understanding where this trend is headed is especially important for gauging the potential impacts on worker mobility, equity and the market for degrees and other types of valuable credentials,” they wrote in a recent essay for EdSurge.

Last week I shared an informal poll to get a temperature check on these emerging pathways to jobs. The clear consensus was that non-degree and alternative credentials will see substantially accelerated growth in coming years. The outlook for skills-based hiring by employers was more modest, with most respondents saying the shift would be on pace with pre-pandemic levels.

Yet the crisis has accelerated profound movement in the workforce, which seems likely to prod changes in education and job training.

We are at a massive point of transformation,” Michael Stull, senior vice president of Manpower, North America, said during a recent virtual event. “This is analogous to the move from an agrarian-based employment model to a manufacturing, industrial-based employment model.”

A recurring theme during interviews about this topic is the DEI imperative. And the pressure for companies to do better on diversity, equity, and inclusion in their hiring is only going to intensify. For example, Black people are 12 percent of the national workforce, but just 8 percent of the employees at energy efficiency, wind energy, and solar photovoltaic companies, Vice reported last week, citing federal data. IT and other high-demand industries also have failed to make much of a dent in workforce diversity.

The key question for this newsletter is whether alternative hiring models will open doors to well-paying and satisfying careers. Also, can workers get college credits for new forms of credentials? Or will this shift be more about credentialism and the tracking of Black, Latino, and lower-income learners into unstable, low-wage jobs?

Expert Takes

For more on separating fads from enduring changes in this fast-moving field, here are comments from a few well-placed observers:

Kristen Titus, executive director of the Cognizant U.S. Foundation:

Alternative credentials and skills-based hiring are appealing for many reasons, not least of which is the promise to level the playing field and create clear, accessible pathways into jobs. In practice, though, this has proven challenging. The tech industry, for instance, sees jobs, job requirements and the tools necessary for jobs change nearly every quarter—making it hard for credentials and the systems that validate, update and adopt them to keep pace. This elevates the importance of solutions like work-based learning, on-the-job training and experiential learning, critical components needed to not only enter a job, but also to stay in it and to move up the ladder. 

At the same time, we must avoid pushing people into “fad” programs or credentials that don’t have adequate job placement outcomes. Access and equity should be the underpinning of this work—not a move to monetize the latest education to employment pathway.

Allison Salisbury, senior vice president for employer solutions at Guild Education:

Bachelor’s degrees will continue to be the “coin of the realm” for highly selective, knowledge economy jobs. But for roles where job demand and open positions far outpace the number of qualified applicants—such as coding, data science, and frontline management—there has been a shift to non-degree credentialing over the years. This change has accelerated as more business leaders recognize degree requirements for what they too often are: an unnecessary barrier for Black and Brown employees, which restrict access to jobs they are qualified to do.

More and more large employers are looking to pay their workers’ way through college not just because of good will—but because it’s good business. We’ve seen such major shifts in the labor market that companies aren’t able to simply hire the talent they need, and they recognize they now have to grow it within. And that approach is good for people because it lets them learn while not only earning a paycheck, but also developing meaningful workplace skills. 

Cathy Morgan, director of customer acquisition at Opportunity@Work:

Today, 70+ million workers are Skilled Through Alternative Routes (STARs), such as community college, workforce training, bootcamps, certificate programs, military service, or on-the-job learning, rather than through a college degree. But while STARs have always accumulated skills through various pathways, they have faced barriers to accessing higher-wage work.

Major employers like Amazon, Google, and IBM are adopting skills-based hiring practices that value STARs for their skills—rather than screening them out because they don’t have degrees. We hope this is the beginning of a sea change that will inspire more employers to recognize the full potential of STARs’ talent and, in turn, create more demand for these alternative pathways.

By properly valuing STARs, employers will be able to tap into a much larger talent pool, fill open positions faster, and build a more diverse workforce right away. We have already seen great strides in these efforts, but in the near future we could see a truly rewired labor market that finally recognizes the skills you have—rather than where you got them.

The Kicker

Thomas L. Monahan III became DeVry University’s president and CEO in 2020, a few years after the for-profit university’s sale to Cogswell Education. Monahan, the former CEO of CEB, a data and content firm, says the conversation about how higher education can better serve the needs of employers is critically important. But it misses the mark before even getting started, he says:

“Employers” don’t exist.

In decades in business, I never once heard a leader refer to his or her company as an employer. Businesses, small and large, are fundamentally focused on delivering their distinct products and services to their unique current and future markets. The same is true for nonprofits, government agencies, and the like. This isn’t just a semantic distinction. Understanding those fundamental priorities is critical to understanding how to meet organizations’ very real talent needs.

This is not to say attracting, retaining, and creating internal pathways to upskill talent isn’t a corporate priority. We need to move away from the false “employer” catch-all toward a conversation focused on what individual businesses are actually trying to do, and—within those businesses—what mix of talent each division or function head needs to get that work done. Institutions need to be asking questions like, “What job, exactly, does this program enable someone to get?” and “Who is their hiring manager?”—not focusing on how we can better serve the vague category of “employers.”

Retroactive Pell

The federal budget proposed last week by the Biden administration would not double Pell Grants. Instead, it recommended a $400 increase to the current maximum Pell award of $6,495.

But what if policymakers looked at the Pell idea differently, and combined it with efforts to forgive student loans? That’s what Erica Blom of the Urban Institute suggested this week. Retroactively doubling Pell Grants for student loan borrowers would be a simpler and more targeted form of loan relief, wrote Blom, a senior research associate at the institute:

Policymakers could forgive up to the cumulative amount of Pell grant dollars received by the student while in college for roughly the same cost as forgiving up to $10,000 for all borrowers. Since Pell grants are based on income and wealth while in college, a Pell-based approach would target borrowers from lower-income backgrounds.

Notable Fed

Chike Aguh is the first Black chief innovation officer at the U.S. Department of Labor. Before joining the Biden administration, he led the Education Design Lab’s work on economic mobility pathways and its community college growth engine fund.

Aguh was a guest on the Future of Work Pioneers podcast last December. Here’s what he said about the skills gap:

“How do the work and the worker find each other? Ideally, if you can do the job, you should get the job,” Aguh said. But hiring bias and market inefficiency often prevent that from happening. “You have jobs that stay open, and people who need jobs.”

Aguh also weighed in on what he called the binary debate about the liberal arts versus technical education:

‘It’s nonsense. In this economy you need both,” he said. “And the choice about which way you go or how you merge that needs to be in the hands of the learner, not necessarily the higher-ed institution, not necessarily the employer.”

Open Tabs

Community Colleges

Enrollment of transfer students at U.S. community colleges dropped by 15.2 percent in the spring term compared to last year, according to the National Student Clearinghouse Research Center. Transfer enrollments held steady at four-year public institutions. But the overall dip was 3.8 times larger than the pre-pandemic rate of decline.

EAB’s lessons for community colleges on student admissions from its “secret shopping” of for-profit institutions include tips to avoid common “delays or dead ends that effectively killed applicant momentum.”

EdSource profiled five students who had planned to stay enrolled at California community colleges. Only two returned. “Trying to do my schoolwork with the kids at home with their own schoolwork, it was just too much for me to handle,” said Brittany Adnoff, 34, who had attended Orange Coast College.

Replacing developmental education with corequisite support can help dismantle inequalities in higher education, according to a new report from Complete College America, which offers strategies for and data on supporting students, with a focus on underserved groups.

Equity Gaps

College is contributing to the racial wealth gap, Dorothy A. Brown, an author and tax law professor at Emory University, wrote in an opinion piece for The Washington Post: “When a Black student, through herculean efforts, actually obtains a college degree, he or she faces a racist labor market that makes it harder to pay down debt and build wealth.”

Roughly 18 percent of 1.9 million women who have left the workforce completely since last February were between the ages of 16-24, reported The New York Times, citing an analysis by the National Women’s Law Center. And more women than men have said they canceled plans to take postsecondary classes, according to the U.S. Census Bureau.

On Ramps

Eight in 10 managers at U.S.-based companies said workers need more education, credentials, certificates, or training to access higher-level jobs, according to a survey by Kelly Professional & Industrial. But roughly half of workers said they don’t understand what skills matter most to employers.

Degreed, a workforce upskilling platform, raised $153 million in new funding and is now valued at $1.4 billion. “Organizations are changing their approach to talent and skills post-COVID-19,” said Kat Kennedy, the company’s president and chief experience officer.

An analysis from the rpk Group on the financial sustainability of college programs that offer credit for prior learning (through PLA, exams, portfolios) found that these models can generate net revenue and may allow institutions to better tap into the market for adult students.

Chipotle Mexican Grill expanded the debt-free college degree program it offers to employees in partnership with Guild. The restaurant chain added degrees in agriculture, culinary, and hospitality to the more than 75 degree programs workers can access tuition free after 120 days of employment.

Let me know what I missed? Catch you next week — PF @paulfain

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