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Report: Workers with Skilled Credentials Could Be the Antidote to Your Hiring Headache

A woman's hand writing in a notebook next to a laptop.

​As many employers continue having difficulty finding workers to fill positions, the SHRM Foundation is urging HR professionals and hiring managers to look to individuals with nondegreed credentials as viable candidates for hiring and promotion.

Skilled credentials can take a variety of forms—certifications, documented completion of a registered or nonregistered apprenticeship, and digital badges that indicate completion of learning modules within a particular field.

In a campaign to build awareness of skilled credentials, the SHRM Foundation is re-releasing two reports, Making Skilled Credentials Work and The Rise of Skilled Credentials in Hiring. The republished papers feature a change in terminology from "alternative" credentials to "skilled" credentials to underscore the value and rigor of the credentials.

Skilled credentials are not to be confused with occupational licensures, which are typically required by a state before an individual may work in certain occupations, such as licensed practical nurses, electricians and lawyers.

Obstacles for Employers

The challenge in finding individuals with the skills that organizations need is exacerbated by a lack of systems that can easily identify an individual's skills and talents, the SHRM Foundation noted in Making Skilled Credentials Work, which it produced in partnership with Walmart.

[SHRM members-only how-to guide: How to Address the Skills Gap]

Seventy-seven percent of 1,129 U.S. HR professionals surveyed by SHRM said they frequently come across job seekers who hold nondegree credentials. However, many organizations' automated applicant tracking systems (ATSs) typically don't collect information on nondegree credentials from job seekers like they do with traditional work experience and schooling.

Nearly one-third (31 percent) of respondents said their organization's ATS only allows applicants to indicate nondegree credentials in a general section. Additionally:

  • 20 percent said their ATS provides a designated section where applicants may manually enter their credential information.
  • 18 percent said their ATS specifically asks questions about credentials.
  • 17 percent were not sure how their organization's ATS allows applicants to indicate nondegree credentials.
  • 14 percent said their ATS has a designated section that auto-fills from the resume.

The findings were from a survey of 500 U.S. executives and 1,200 supervisors, HR professionals and workers with no direct reports. The SHRM Foundation also gathered information through a series of focus groups. 

Weighing the Value

"HR needs to be better consumers of these tools to prevent the unintended consequence of excluding skilled credentials," the SHRM Foundation pointed out in Making Skilled Credentials Work. "And ATS providers need to be more aware of the implications of their systems and promote their use to capture all values of the applicants."

Another obstacle for employers is the profusion of credentials.

They are available through a wide range of institutions, according to a 2021 report from the Center for Education Consumer Highlights, Examining the Value of Nondegree Credentials.

Those venues include vocational and technical colleges (19 percent), colleges and universities such as Cornell and Harvard (18 percent), the government (15 percent), professional associations such as the Society for Human Resource Management (15 percent), community colleges (12 percent), organizations such as IBM and LinkedIn (10 percent), and others (9 percent).

Evaluating their value can seem complicated and time-consuming, discouraging employers from considering them when making hiring and promotion decisions, the SHRM Foundation noted.

"Organizations must become very clear in their own definition of the skills desired," said Keith Look, a former educator of 20 years who is now vice president of equity and innovation at Territorium, a global education technology company based in Austin, Texas.

"Organizations may work to identify hallmarks or indicators of skill attainment in a candidate," he added. "With the definition in place and 'things to look for' identified, the review process can be much more efficient and effective as organizations focus their lenses on the credentials presented."

Employers also may consider asking job candidates for samples of the evidence submitted that earned the credential, badge or certificate.

"This allows the candidate to let the work speak for itself while giving the organization a clear image of what the credential means in practice, according to the issuer," he pointed out.

Additionally, employers can be reluctant or unaware of how to validate skills acquired outside of colleges and universities even when credentialed individuals have the necessary competencies for the job, it found.

"Until there are universally accepted definitions of 'collaboration' or 'problem-solving' or regulatory clearinghouses, employers must be careful in how they assess credentials presented," Look observed. He suggested some approaches:

  • Conduct simulations. "In a screening process, employers may be well-served to have candidates to display their degree of proficiency in a job-related simulation," Look said.
  • Turn to in-house expertise. "An HR department cannot be experts in every facet of an organization's functionality," he said. "In-house experts may better assess a candidate's particular skill set or may be the best mentors/coaches/supervisors, especially during a probationary period."
SHRM Resource Hub Page
Skills Gap & Workforce Readiness

However, employing individuals with skilled credentials can be a path to a more diverse workforce. For example, military veterans are more likely than nonveterans to have earned certifications, according to a November 2019 report from the Lumina Foundation. Skilled credentials also are popular with nontraditional job candidates such as workers ages 50 and older, formerly incarcerated individuals and people without formal higher education, according to the SHRM Foundation.

The Center for Education Consumer Highlights noted in its report that 58 percent of working-age adults who did not complete college have earned skilled credentials, while 19 percent with no higher education have earned skilled credentials.

"Alternative credentials are not a fad," Look said. Until the Internet age, a hallmark of a good education was the amount of content a learner could retain. Now, with most content available in a matter of seconds via a search bar, the definition of a good education is shifting toward the skills of a learner in manipulating and processing the content.

"For this purpose, credentials are a more accurate stamp of proficiency than a course's letter grade.

Other SHRM resources:

How Alternative Credentials Can Help You Find Employees, HR Magazine, Summer 2022

In Search for Qualified Workers, Maryland Drops Requirement for 4-Year Degree, SHRM Online, April 2022

Next Steps for HR Professionals, Hiring Managers, SHRM Online, April 2022


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