How does the world of higher education currently intersect with the world of employers and their hiring needs?
In spite of much discussion about the present merits and shortcomings of higher education, too little consideration has been given to the enduring, practical dependence of employers on academic credentials and reputable credentialing systems.
In his book The Future of University Credentials: New Developments at the Intersection of Higher Education and Hiring, Sean Gallagher, EdD, provides a thorough assessment of the past, present and future of educational qualifying.
I recently interviewed Dr. Gallagher, the Executive Director of Northeastern University’s Center for the Future of Higher Education and Talent Strategy, for the New Books Network. In our conversation and in his book, he describes two key aspects of the modern hiring economy.
First, employers continue to rely heavily on the signaling function of familiar degrees and school brands. “Most of our knowledge-driven economy, in the US and increasingly worldwide, is quite reliant on the talent that comes out of colleges and universities and the credentials [they] issue as signals,” Gallagher said.
And in spite of lots of contemporary cynicism about the purpose and value of attending college, he doesn’t expect this function to change anytime soon, because “employers aren’t yet terribly sophisticated” when it comes to qualifying candidates. He added:
“One of the major themes out there has been the idea that degrees are declining in value. I think at worst the economic value of degrees is flat relative to prior years, and in certain cases when you segment the market, the value of a graduate degree is increasing, even as it becomes increasingly popular.”
However, Gallagher also observes a second trend: we’re in the midst of an unprecedented surge in disruptive alternatives and supplements to traditional credentialing. These innovations include online educational courses, bootcamps, professional certifications, pre-hire testing, and employer-sponsored training.
Do these innovations introduce an existential threat to traditional collegiate models? Not yet, according to Gallagher, but there are concerning signs for some schools. For example, with respect to online education, the rush by universities to establish online programs (beginning with now-ubiquitous MBA programs) may ultimately cannibalize colleges’ historic, core functions–especially in the case of middle- and lower-tier schools.
Gallagher cited an interesting statistic: the top 100 institutions in the United States own about a 45% share of the online course market–and that share is growing. Because of the innate scalability of online content, lesser schools may be left with little to offer to student consumers.
Meanwhile, even upper-tier schools may ultimately cheapen their own product: in many cases they already offer less-expensive online paths to attain the same degree granted through traditional on-campus programs.
Challenges to institutions may also arise via what Gallagher describes as “the emergence of major employers as recognized credentialers in their own right.” As respected companies such as IBM and AT&T take on greater roles in employee preparation, and as work histories and HR files become more portable, corporate qualifications could erode the importance of collegiate credentials.
For more discussion of all of these topics, you can listen to the interview here.