New ACT Report Calls for National Skills Credentialing System

America needs to intensify national efforts to improve and validate the skills of its workforce in order to correct the current mismatch between skill demand and supply, according to a new ACT report.

Breaking New Ground: Building a National Workforce Skills Credentialing System provides a framework for discussion among educators, employers, workforce development officials, and other key stakeholders. It explains why the country needs a national workforce skills credentialing system.

“Our intention is to spark meaningful discussion,” said ACT CEO Jon Whitmore. “If we can inspire leaders to coalesce around the notion of a national workforce credentialing system, we can help shape a new direction for the workforce of the future.”

Martin Scaglione, president, ACT Workforce Development, added, “If I were to characterize our intention with this report in one phrase, it would be ‘to create order out of chaos.’ As stated in the report, the United States has numerous accrediting and credential-issuing organizations offering tens of thousands of both credit and noncredit credentials with varying levels of third-party validation or industry recognition of their value to employers and to individuals. As a result, the current credentialing landscape is crowded, chaotic, and confusing. Many certificates awarded each year are not portable (between institutions, employers, or states), transferable, or stackable so that they fit within a defined career pathway.”

The report highlights a number of critical workforce development trends, including:

The need to close the “middle-skills” gap.

The United States has an abundance of workers who can fill low-skill jobs, and the number of college graduates is roughly equal to the number of jobs requiring a four-year degree. The critical gap resides with middle-skill jobs. By 2014, approximately 45 percent of all jobs will fall in this category, but only 25 percent of the workforce will be qualified to successfully perform them. By 2018, 30 million new and replacement jobs (replacing retirees and those leaving an occupation permanently) will require some postsecondary education. Middle-skill jobs are those requiring more than a secondary school education, but less than a bachelor’s degree.

Millions of adults must upgrade their skills and earn foundational credentials. About 90 million Americans—roughly half the U.S. workforce—face one or more barriers to obtaining the education, training, or language skills required to function well in the global economy or to earn family-sustaining wages. Compounding this problem is that the fastest-growing segments of the adult labor force are the same ones who have faced the greatest obstacles to gaining skills and earning degrees: students of color, low-income students, working adults, and adults who have lost jobs that are unlikely to come back.

Employers are demanding more skills and education. Across all industries, employers report increasing demands for skills in problem solving and critical thinking, communication, teamwork, entrepreneurship, and business. Skills and credentials in science, technology, engineering, and math (STEM) will continue to be in high demand.

Worker credentials are not aligned to the requirements of the economy and are insufficient in number.

ACT research points to a mismatch between the programs of study many people are pursuing and the requirements of the workplace. Not only is the United States falling behind other nations in degree attainment, an increasing number of people are earning degrees that are not a best fit for the opportunities and requirements of the nation’s economy. The proportion of the nation’s adults who have completed a two-year or four-year degree has been flat for nearly 30 years, at about 39 percent. The proportion of those who have completed some college is rising in most developed countries, but not in the United States.

Adults are interested in taking action, but many are uncertain of what to do.

More than 80 percent are willing to participate in education and training outside the workplace, and 62 percent recognize that the future economy will demand higher skills. But most will need significant career navigation advice to access and create an achievable personal career plan of education and training options.

A key recommendation of the report is the need for a “layered” credentialing system, recognized nationally, that begins with a single foundational skills credential, followed by increasingly more-targeted occupational and job-specific skills credentials.

“Ideally, a national skills credentialing system would include design elements built for long-term, sustainable productivity,” said Scaglione. “The system would cross over multiple business sectors and be integrated both horizontally to maximize mobility from one sector to another, and vertically from foundational to advanced job-specific credentials along defined career ladders. To be sustainable, the system must be industry driven and based on employer requirements and industry standards.”

Larry Good, cofounder and chairman of the Corporation for a Skilled Workforce, added, “Far too many Americans do not qualify for good jobs, and far too many firms face challenges in identifying and developing talent. The heightened demand for technology skills has left much of our workforce without the skill sets they need to succeed in the new economy, while the global marketplace has brought intense new competition. The time has come to foster an earnest discussion about the innovative solutions and public policy changes needed to develop and ensure a more skilled workforce. This ACT report provides that framework.”

Walter Bumphus, president and chief executive officer of the American Association of Community Colleges said, “This new ACT study is both thoughtful and positive. In effect, it recommends transformational change in the ways we validate the skills of our workforce to ensure that they are evidence based and effectively aligned with workplace needs. At a time when our nation faces serious shortages of skilled workers, this study suggests a groundbreaking path forward.”