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Recruiting Intelligence

The New Revenue Driver: Continuing Education

One of the key functions of higher education programs is to award a credential. The credential signals to our environment that we have passed certain hurdles, mastered certain content. The certificate provides a filter for the hiring market to help managers select candidates worth investing time and effort to interview and hire with a level of confidence that talent and skills have been pre-established and pre-evaluated.

As the pace of change in our economy accelerates, knowledge becomes outdated more quickly. Hence we have required continuing education requirements for many professions such as medical doctors, lawyers and financial analysts. In other areas, the market drives the individual to update their knowledge. Consider programming where, if C++ programers cannot find jobs, they acquire new skills. You get the gist.

We have spent the last few months looking at online education, MOOCS and other digital learning trends. Today, we want to draw your attention to certificates delivered by existing higher education institutions. Our hypothesis is that new certificates will be minted very quickly in the academic marketplace and that the workforce will have increasingly outcome based, skill-based certificates added to its digital resume to maintain qualifications and attractiveness to the labor market and hiring institutions. And in considering this education direction, we want to look at what institutions are doing to meet this market demand.

The key questions for any institution: What will you do to take advantage of this growing market need and how will you find the resources (financial and talent) to move forward effectively? Keep reading and maybe we can offer some perspective.

We went back to a research report from June of last year, called "Certificates: Gateway to Gainful Employment and College Degrees," published by the Center on Education and the Workforce at Georgetown University. The report focuses on certificates that are earned through seat time in a classroom versus more broadly defined industry-based certificates, which are awarded based on test performance, irrespective of where the learning occurs. Microsoft certifications or the Chartered Financial Analyst (CFA) would be examples for the latter.

We believe that digital platforms open up a huge market for certificate credentials, short-term non-classroom based, outcome oriented programs that confirm the individual has acquired a specific knowledge set. Many questions will have to be asked and answered:

  • Will these credentials be worth pursuing and gain respect in the market place?
  • Who will provide the content, teaching and award the credentials?
  • What kind of underlying infrastructure do universities need to provide effective operations, marketing and general administration?

Let's give you one example for the impending avalanche of certificates. International students take note: MIT recently announced that it will award a certificate for a sequence of courses taken and tests passed through EdX and Cousera. Millions upon millions of students around the world now have access to earning MIT credentials without traveling.

Another a nice example from eCornell (graphic below) which promotes industry specific certificates in disciplines such as hospitality, management, global marketing, and other niche education opportunities. We all know that these divisions of executive and continuing education have been around for decades in most universities. Mostly, they were small divisions that served a local clientele with the exceptions of the likes of Harvard, MIT, Stanford and Wharton with brands that attract a global audience.

That monopoly is changing. Today, regional and less well-branded institutions can draw that global audience.

Continuing education divisions are, in our view, the natural growth drivers of online-only, and blended teaching based certificates.

eCornell(Source: www.eCornell.com October 2013)

According to the Georgetown University Center, the number of certificates awarded has skyrocketed more than 800% over the past 30 years.
In 1984, less than 2% of adults 18 and older had a certificate as their highest educational attainment. By 2009 the percentage had grown to almost 12%, according to the Survey of Income and Program Participation (SIPP). Figure 11 below shows you a breakdown of the subject areas, showing a wide distribution. The report highlights certificates as predominantly an education credential for less educated groups and analyzes the income impact of these credentials for these groups. We think that this is valuable research yet we are also focused on the impact and potential of certificate-based education on more highly educated groups. The report shows that almost one third of the certificate holders also hold a bachelor (21%) or even graduate (11%) degree.
The important question for higher education institutions is: how large will the demand for higher education credentials become?
  • Will certificate availability increase consumer demand and the overall market for higher education? Will these new certificates be complements to existing degrees that we all refresh and supplement throughout our professional life? We believe that the national increase in Executive MBA programs increased demand by opening up these degrees to certain groups.
  • Will certificate programs offered by MOOC providers such as Coursera, EdX and many others cannibalize existing campus-based education at both the undergraduate and graduate levels?
The Bottom Line: The future of many universities will depend greatly on how they respond to new market opportunities and potential areas of revenue growth. The question for you, our readers, has everything to do with how you answer the questions we've posed above for your specific institution. How will you position your academic program content and delivery system to position them for growth? Really the question is: is your institution in position to innovate?This is not easy stuff. Trend data is just that, it identifies trends. The academic marketing is changing. Which direction it veers in the next 2 to 10 years is exceedingly hard to predict. How quickly will new technology be adopted? How difficult will it be to build new operational infrastructure and program content to meet demand? Is your institution prepared to attract and deliver an education to the global market as opposed to the domestic market?

These are not questions to be taken lightly. Insight, analysis, calculation, and industry knowledge will inform you as you move forward. Do you have all of that on campus or could you use some outside help?

Distribution of Certificate Fields of Study
Topics: Insights