How Digital Credentials Will Diminish Degrees

It used to be easier to steer clear of celebrity culture. While I don’t remember a world without People Magazine (or as Steve Martin called it, “Screw up your life Magazine”), I grew up before the rise of E!, TMZ, and Access Hollywood, let alone Princess-killing paparazzi, Kardashians and social media platforms that allow celebrities like Zac Efron to share deep MLK Day thoughts like “I’m grateful for a couple of things today: Martin Luther King, Jr. & 10 million followers on Instagram.”

While I’ve tried to give Zac, Kylie, and Kim a wide berth, Covid has forced compromises on all of us. So when it became clear that we wouldn’t be able to give Hal a normal 12th birthday and that the only option was a sad Zoom party, rather than dropping off cupcakes or other less-than-nutritious food for sedentary kids, we sought a celebrity to send a memorable message. Fortunately, celebrity culture has given birth to Cameo, which the New York Times describes as “a service that allows housebound idiots to blow money on silly shout-outs.” As Hal’s relaxed Zoom school schedule has allowed him to watch every episode of Brooklyn Nine-Nine twice since March, we chose Joe Lo Truglio, who – fittingly for Cameo – plays a Brooklyn Nine-Nine character described as “not that brilliant and not physically gifted.”

The Cameo Joe recorded for Hal’s party started like this: “Hal, you did it! You turned 12! It’s Joe from Brooklyn Nine-Nine and I just have to say, what happened to my Save-the-Date invitation to your Zoom party? I was supposed to get an STD. And I never got an STD!” While it was a bit surprising that an actor would make a joke about Sexually Transmitted Diseases to a group of 12-year-olds, Hal explained it was from the show. In any event, Hal seemed to appreciate it (primarily, I think, because he knew it was inappropriate).

Appropriate or not, celebrity is now common currency. From influencers paid per post to market a sham music festival in the Bahamas, to 12 new celebrity-branded tequilas raising troubling questions about the future of capitalism, to being paid to film asynchronous online Masterclasses in singing (but maybe only if you’re Christina Aguilera), celebrities are finding new ways to monetize fame. But while the rise of Masterclass and Yellowbrick draw attention, celebrity is hardly new to education. Some of the world’s most famous brands are elite universities, which are feeling the celebrity whoosh via an unprecedented increase in applications. Berkeley and UCLA are up 28% this year, while applications to Yale increased 38%. Harvard is up over 40%, and, as Jeff Selingo pointed out last week, is the most searched for university in 42 states. (For the record, Stanford wins four states, Yale three, Princeton gets NJ as a consolation prize, and despite being named for its state, Penn fails to win Pennsylvania, prompting one observer to ask "Where the hell is Penn? Go Quakers!", which could be a rhetorical question or a really bad football cheer.)

In the realm of credentials, degrees are easily the most famous. Originating as celebrity credentials – an easy way for sons of the merchant elite to demarcate themselves from the hoi polloi – today they’re as well known as celebrities. And just as a celebrity association imbues a product with a few vapid characteristics for which the celebrity is known (Ryan Reynolds? Quirky!), degrees are also a lazy shorthand. The question (and problem) is shorthand for what? Prior to the Great Recession, degrees signaled to employers and hiring managers that candidates could learn the job. But with digital transformation and higher hiring costs and risks, that’s no longer what most employers are looking for. Industry and digital platform experience have become much more important, turning entry-level jobs in many fields into oxymorons. As a result, while degrees remain the penny (or more likely six-figure) ante for being considered for desirable jobs, beyond that superficial first screen, highlighting a degree now signals what a candidate cannot do i.e., no specific relevant experience.

The result is a price-value mismatch for degrees – a mismatch more fundamental and intractable than the current Covid kerfuffle (i.e., charging for a bundle, delivering online courses, prompting tuition strikes and litigation). Potential applicants to non-selective schools like Indiana University of Pennsylvania have already recognized it, and the day of reckoning may have arrived; applications to SUNY institutions are down a shocking 20%, prompting Chancellor-level soul searching.

Diverted students still need to earn some kind of postsecondary credential. Like the jobs they hope to get, the credentials they’ll earn are digital. And while digital technology has allowed celebrities to get in our feeds and faces, ironically, digital will wash the celebrity out of credentials.

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As evidenced by paper diplomas and transcripts, degrees remain resolutely analog. They track skills and capabilities in the same way an analog watch tracks time. As the hands sweep across the face of the watch, a watch isn’t measuring time. Rather, the movement is an analogy for the passage of time. In contrast, digital technology, if not actually measuring, articulates and encodes in discrete digits so that the information is easily assessed and transmitted.

Digital credentials usually relate to a specific, tangible skill. Most have three key elements: portability, security, and metadata supporting the skill statement. Credential Engine has counted 475,000 different non-degree credentials in the U.S. and given the accelerating volume of new digital credentials issued on Credly (approaching 50,000 each day), it’s clear that the most popular non-degree credentials – industry certifications, certificates – are all digital. 95% of the most popular IT certifications already issue on Credly.

Despite current challenges, most degree-granting institutions remain as smug as Gwyneth Paltrow. After all, the emergence of digital credentials hasn’t been an extinction event. To process why – and what happens next – it’s important to understand how employers actually utilize credentials in hiring.

Think of hiring as a funnel divided into three parts:

  1. Top of funnel. Hundreds – sometimes thousands – of résumés pour into the top of the funnel for every online job posting. HR and hiring managers can’t review every applicant. Instead, they utilize Applicant Tracking System software like Taleo, Greenhouse, or Kenexa, matching keywords in the job description to keywords parsed from the résumé. Top matches make it through. Everyone else is discarded in the digital dustbin.
  2. Mid-funnel. Human review of matched résumés to determine which candidates merit interview and assessment time.
  3. Bottom of funnel. Interviews and assessments, hopefully yielding job offers.

That’s the funnel for active job seekers. There’s a slightly different funnel for recruiting, where recruiters attempt to identify passive candidates for an open job req. Top of funnel recruiting currently looks a lot like mid-funnel for job seekers e.g., surfing and scrutinizing LinkedIn profiles.

The problem is that neither is working well for active or passive candidates. And the big problems are all at the top. Sure, lots of employers don’t have great interviewing processes. But subpar interviews and assessments aren’t the cause of millions of underemployed 20-somethings, 6.5M unfilled jobs, the profound sense of lost opportunity, and the resulting conspiracy theories that have darkened the American landscape. The problem is top of funnel: determining which applicants or passive candidates could do a great job and therefore merit an investment of time and attention.

If this sounds like a problem technology can solve, you’re right. But as degrees are analog, you can’t build an app on top: the requisite operating system is missing. Conversely, digital credentials ARE operating systems. Credly’s platform – portability, security, and especially metadata – is an operating system like iOS and Android. And the reason digital credentials haven’t yet upended their famous forebearers is that no one buys an iPhone for iOS: they buy it for the apps.

But as sure as Miley Cyrus will show up on Page Six, the apps are coming. With a digital credential operating system firmly in place, new digital credential apps will make thousands of skill-based digital credentials intelligible where they matter most for employers (and for economic opportunity): at the top of the hiring funnel. Credly has already signaled this direction, announcing a new app focused on “skills visibility for enterprises.” Credly plans to help employers understand and take action on “the verified skills and credentials people have received from both internal and external sources.”

Soon we’ll see apps allowing candidates to match digital credentials with job descriptions, guaranteeing mid-funnel review if not an actual interview. We’ll see recruiting apps crawling millions of potential candidates for verified digital credentials that have proven to be predictive of performance and persistence, and linked bots reaching out to candidates in order to establish a funnel of much surer bets. Launching a new non-degree credential today is like building a bridge halfway (a pier); the only way to complete it is to build from the other side – from the employer side. And that’s exactly what digital credential apps will do. And once the enterprise has made better hiring decisions, we’ll see apps mapping career pathways, highlighting future managers and leaders and assembling more complete, compatible and diverse teams.

Like iOS and Android, digital credentials aren’t particularly useful without apps. So the opening of the digital credential App Store will be a dark day for analog degrees, even degrees with transcripts articulated digitally or stored in blockchain. Even though they’ll remain famous, unless and until degrees are unbundled and articulated in skills and capabilities (and then recorded digitally), lack of intelligible predictive and valuable skill data will begin landing most degrees on a Where Are They Now? list. If a tree falls in the forest and there’s no one to hear it, does it make a sound? Likewise, if a credential is issued and no employer (or Applicant Tracking System) can understand it, does it make a difference? The answer to both is no. So even analog degrees from celebrated colleges and universities are likely to lose some luster.

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The greatest blessing that could descend on Higher Education in this country would be not the erection of more class barriers but the removal of one: namely, the distinction drawn between those who have attended college and those who have not.
- W.H. Auden, The New Yorker, April 23, 1949

Auden didn’t care much for celebrity. At literary gatherings, he’d read poems in stained, ash-spattered suits with his fly undone, then seek out “the least important person in the room.” Perhaps he understood the danger of fame, which is now clearer than ever. When lazy celebrity shorthand (“rich, decisive boss”) can capture the Presidency, the consequences are even more calamitous than 12 new tequila brands. In higher education, famous credentials and institutions have led to an unaffordable monochrome isomorphism that has thrown America’s engine of socioeconomic mobility into reverse, exacerbated inequality, and stymied opportunity for diverse populations.

Just as digital technology has had its way with taxi monopolies, publishers, movie studios, and – now with GameStop – hedge funds, apps atop digital credential operating systems are on the verge of democratizing paths to good jobs. To paraphrase Matt Taibbi’s take on GameStop, the only thing ‘dangerous’ about technology blowing up degrees is that some of us reading about it might die of laughter. Digital credential apps will connect job seekers to employer hiring systems and transition the economy from pedigree- and degree-based hiring to skills-based hiring – a change that’s supported by virtually every constituency across America, with the exception of colleges, universities, and country clubs.

While famous credentials used to be a stepping stone, for far too many new and recent graduates (and for their parents), they’ve become a millstone. Digital credentials are here, and apps are on the way. Unlike celebrities, there will be a lot worth celebrating, including keeping 12-year-olds clear of STDs: Spendy and Time-consuming Degrees.