Credentials of Value

Short-term credentials move beyond the “Wild West” as states step up investment. In Connecticut, a farm system for manufacturing grew into a statewide strategy. Also, the National Skills Coalition seeks a bold workforce policy agenda, and essays on why workforce infrastructure is the ed tech of the future and on the policy response that’s needed to stop AI from eroding the skills it’s meant to augment. (Subscribe here.)

Moving From Architecture to Execution

As states ramp up spending on short-term education and training, many are developing the infrastructure to ensure that those investments pay off, for both students and taxpayers.

Last summer the Lumina Foundation rolled out a project to help leaders across 12 states—both red and blue—strengthen their short-term credential programs. A new landscape scan from the FutureReady States initiative found common themes in the work by those states.

“Across the board, data and data systems are a major challenge,” says Stephanie Murphy, director of state policy and research for HCM Strategists, and the report’s author. That’s true even for the states with the most advanced approaches to collecting evidence on ROI and credential quality, she says, particularly with their information about noncredit programs.

Even so, the common refrain that the short-term credential space is a Wild West doesn’t fit with what the project is uncovering, says Kermit Kaleba, Lumina’s strategy director for credentials of value. A lot of smart people at the state level are working on these questions, he says. (The initiative has backed five intermediary organizations to support the dozen states.)

For example, a Colorado law is bringing together all major state education and workforce entities under a unified data governance policy, the report notes. The system’s design emphasizes interoperability and shared standards and could serve as a national model for cross-agency collaboration.

Kaleba says data gaps to some extent reflect the fact that many states previously weren’t investing much money in short-term and noncredit programs. “Data is expensive to collect,” he says. “Policymakers are interested in a question that maybe they didn’t used to be.”

Most of the 12 states have developed definitions or frameworks for “credentials of value,” the report found. But those efforts vary widely in rigor and applications. For example, Texas and Tennessee codified their take on credentials of value through laws. Other states have taken more conceptual approaches. Or, as in Michigan’s case, those frameworks are limited to specific programs.

Enforcement mechanisms, however, remain rare. And few states tie funding or program eligibility to the outcomes of short-term credential programs.

The report also said connections with employers need to be strengthened. Employers tend to be solid participants in validating credentials and helping states to determine which ones should be included on lists of credentials of value. But companies have a worse track record on following through by hiring jobseekers with short-term credentials—a concern we hear often in our reporting.

“It’s important to stay engaged throughout the life cycle,” Murphy says.

That call was echoed by new research from the Burning Glass Institute and OneTen, which found little correlation between requesting a nondegree credential and actually hiring for one.

The analysis of the hiring practices at 1K major U.S. employers also identified “staggering variation” among companies. While some firms have built the infrastructure to recognize skills at scale, many haven’t formalized the role nondegree credentials play in their hiring strategies.

A Farm System for Employers

Connecticut is ahead of the curve in bringing employers in as strong partners for short-term credential development. For example, the landscape report cites the state’s Regional Sector Partnerships, which are industry-led efforts to address workforce challenges and skill gaps—including through credential lists.

The Business-Higher Education Forum has been working with the state through the Lumina-backed project. Kristen Fox, BHEF’s CEO, points to incentives and funding Connecticut created for employers through programs like its Tech Talent Accelerator, which supports employer engagement with educational providers to create and validate short-term credentials related to high-demand and high-priority jobs.

“What stands out is consistent prioritization of employer needs and mechanisms to work closely to support them,” Fox says.

Connecticut’s work on short-term credentials took off in 2022, with its Career ConneCT initiative.

As Colleen Connolly reports for Work Shift, that program promises jobseekers that they can earn the skills they need in four to 24 weeks with the help of a career coach. Participants also exit the program with an industry-recognized credential, many of which can stack toward a degree. With $70M in federal funding from the American Rescue Plan Act to back the program, it’s the largest investment the state had ever made in short-term credentials.

As of December last year, more than 6,800 people had enrolled in Career ConneCT, which had an average graduation rate of more than 70%. Among graduates, 85% are already employed.

Kelli-Marie Vallieres, Connecticut’s chief workforce officer, heads up that effort. Decades before, she was an employer herself—a manufacturing business owner who struggled to find qualified employees until she teamed up with other owners, the local workforce board, and two community colleges to create the Eastern CT Manufacturing Pipeline Initiative.

It was the first short-term training program of its kind in the state, and ultimately the model for the work Vallieres does today.

Key to the success of the Manufacturing Pipeline Initiative is that it is completely employer-driven. The shipbuilder General Dynamics Electric Boat in eastern Connecticut announced in 2015 that it would need to hire tens of thousands of people over the next couple of decades. Since then, Electric Boat has hired more graduates from the program than any other employer. Last year, 1,100 people were trained to work at the manufacturer, a number expected to go up to 2K this year.

“The concept was to see if the public workforce system could almost serve as a farm system for one obviously huge employer doing a lot of hiring, but also the broader manufacturing sector in the region,” Michael Nogelo, president and CEO of the Eastern Connecticut Workforce Investment Board, told Connolly.

The programs are designed to cover about 70% of the skills and knowledge a worker would need across different employers. After making a hire, the firms provide the final 30% that’s more specific to their needs, Nogelo says. 

That process has gone relatively smoothly in manufacturing, he says. But translating it to other high-demand industries like healthcare has proven more challenging because of the wide range of needs among hospitals, long-term care facilities, and home-care providers. 

“It’s more difficult to aggregate all of those disparate needs and really inform cohort-based training,” he says.

Read the full article on Work Shift.

Workforce as a First-Choice Investment

The National Skills Coalition wants to develop a workforce policy agenda for the U.S., one that meets the moment as the economy changes and AI potentially reshapes the labor market.

“People are wondering what their economic futures are going to be,” says Brooke DeRenzis, the coalition’s CEO. “We can have a bolder conversation.”

The group’s initiative aims to develop a clear policy vision for how the nation invests in pathways to skills, jobs, and shared prosperity. That framework is slated to go live next year, with a focus on state policy as well as federal.

A newly created advisory council will help guide that work. The 34 council members tapped by the National Skills Coalition represent a wide range of perspectives, with participants from higher education, workforce development, labor, business, Big Tech, and state government.

DeRenzis says workforce development should be viewed as a first-choice investment, rather than a “second-chance system” that operates under the assumption that working-class people somehow fell short in their education and career progress.

DeRenzis is making a similar argument to a recent call by Rachel Lipson, a research fellow at the Harvard Kennedy School. Instead of treating workforce development primarily as a tool to fight poverty or reduce employment, Lipson wrote, policymakers should view human capital like R&D for boosting economic growth.

“The field is ready for this larger vision,” DeRenzis says.

Open Tabs

Investigation at DOL
Two top aides to U.S. Labor Secretary Lori Chavez-DeRemer are stepping down after the White House told the Labor Department to fire them, several news outlets reported. The departures appear to be related to an inspector general investigation that followed a whistleblower complaint of misconduct alleging that Chavez-DeRemer had staff members schedule events around personal travel and engaged in inappropriate activities while on the job.

AI Transition
The U.S. lacks the skilled workforce for widespread AI adoption, according to a LinkedIn report that drew from anonymized user data. To meet the moment, LinkedIn recommends that policymakers and employers promote skills-based hiring, support postsecondary education and training providers—particularly community colleges—through the AI transition, expand AI skills training for workers, and develop a better data system for tracking AI’s impacts.

Wage Data
To maximize investments in postsecondary education and hold colleges accountable, the U.S. Congress should incentivize states to enhance their wage records and connect these data to education records, recommends the America First Policy Institute, which U.S. Education Secretary Linda McMahon previously chaired. The institute’s policy brief seeks to rebut common concerns about enhancing wage records, arguing that the move could reduce the size of government.

Career Resilience
Microsoft’s expanded partnership with the University of Washington includes a plan to develop programming from the university’s Continuum College to help people navigate AI-related workforce challenges. The collaboration seeks to create new courses and other learning pathways focused on career resilience, evolving job demands, and shifting career identities. Continuum College serves more than 50K learners annually.

Formerly Incarcerated
The U.S. Department of Labor announced $81M in grant funding to support organizations that provide training to formerly incarcerated people, with a focus on the skilled trades and high-demand industries. The department will prioritize shipbuilding and registered apprenticeship programs. It intends to fund up to 20 projects nationwide, with roughly $30M going to intermediaries that serve young people and up to $5.1M for individual awards.

High School Pathways
More students need high school experiences that provide both rigorous academics and meaningful career preparation—not either-or—according to a new report from the Commission on Purposeful Pathways. It makes four recommendations, including that communities make high-quality advising, accelerated coursework, and career-connected learning the norm and set economic mobility as the goal for high school. The report will inform investments made by the $25M-plus Pathways Impact Fund.

Public Skills Systems
The Competency-Based Education Network seeks to help states develop the infrastructure for talent marketplaces. The national project, with backing from the Walmart Foundation, will help governments with auditing and aligning cross-agency skills practices using a vetted governance framework for public skills systems. C-BEN and the National Governors Association also released a guide for state leaders as they establish skills-based talent ecosystems.

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