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ACT Calls for National Skills Credentialing System

Report Outlines Solution to Skills Crisis

January 31 2011

IOWA CITY, Iowa—ACT, Inc. today released a report presenting the case that we need to intensify national efforts to improve and validate the skills of our current and prospective workforce in order to correct the mismatch between skill demand and supply. The report sets forth the reasons why America needs a national workforce skills credentialing system.

Entitled “Breaking New Ground: Building a National Workforce Skills Credentialing System,” the report provides a framework for discussion among educators, employers, workforce development officials and other key stakeholders. “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.”

“If I were to characterize our intention with this report in one phrase,” said Martin Scaglione, president and COO of ACT’s Workforce Development Division, “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 U.S. 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 these jobs. Also, by 2018, 30 million new and replacement jobs (replacing retirees and those leaving an occupation permanently) will require some postsecondary education.
  • 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 education, training, or language skill barriers 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 degrees: students of color, low-income students, working adults and adults who have lost jobs that are unlikely to return.
  • 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, impacting requirements at all levels of the workforce.
  • 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 individuals are pursuing and the requirements of the workplace. Not only is the U.S. falling behind other nations in degree attainment, an increasing number of individuals are earning degrees that are not a best fit to the opportunities and requirements of our nation’s economy. The proportion of our nation’s adults who have completed a two- or four-year degree has been flat across age groups for nearly thirty years, at about 39 percent. The proportion of those who have completed some college is rising in most developed countries but not in the U.S.
  • 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.

Given these well-documented trends, America’s workforce is at a critical juncture. The consequence of an undereducated workforce threatens the economic well-being of our nation and of our citizens in the global competition for skills and talent.

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

Scaglione explains, “Ideally, a national skills credentialing system would include design elements built for long-term, sustainable productivity. 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 (CSW), said, “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 CEO of the American Association of Community Colleges (AACC), added, “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.”