How industry can help fix its skill shortage problems for now and the future

In this article, Stuart discusses the benefits of micro-credentials for both employment and apprenticeships.

2023 outlook, A perfect storm for industry

At the beginning of 2023 there is a global skills shortage, a cost-of-living crisis, the IMF saying that half of the European Union and a third of the world economy will be in recession this year, low unemployment and a number of people who have decided to just leave the workforce: a perfect storm for industry.

With so many factors affecting industry simultaneously, something needs to change with both their recruitment and upskilling training. Industry needs ‘X’, the people out there looking for jobs have ‘Y’. This ‘Y’ may be that that they have some of the skills needed, or that they are coming from an industry which is transitioning to something different but with some transferrable skills. It is said that 99% of skills can be learned, it’s the person that matters. How can this be rectified to get X and Y together? My solution is micro-credentials.

How Micro-credentials can improve employment

There are two forms that micro-credentials can come in (in my opinion), firstly those on a national (or international) framework with a number of credits and a level applied to it. The second type is off framework but fulfilling an industry need and owned by industry. It is this second type of micro-credential that I believe would be of most use here.

In a December 2022 report, CEDEFOP looked into how micro-credentials were being utilised both formally and non-formally. In discussions with stakeholders, they found that when they were “asked how important it is that microcredentials are referenced to national qualifications systems, only a quarter of companies, one third of employer organisations and one third of employee organisations stated that it was very important to them.” (Cedefop (2022). Microcredentials for labour market education and training…) There will of course be a need for micro-credentials on national and international frameworks but as CEDEFOP have described, the overarching importance is less on whether a credential is on a framework, compared to the skills that the learner is able to demonstrate.

In an opinion piece in ‘Fortune’ in January 2023 by Aneesh Raman and Cat Ward, they discuss that “HR teams are also increasingly relying on skills as the key filter through which to evaluate a candidate’s ability and potential on LinkedIn, with over 40% now explicitly using skills data to fill their roles.” In addition, they mention that by focusing on qualifications when advertising roles in the United States, there is no way that employers can fill all the current vacancies, as more than 70% of advertised jobs require degrees “but less than 50% of the U.S. workforce hold a bachelor’s degree.” Moving the requirement away from qualifications to individual skills, to what someone can tangibly bring to a company in my opinion makes roles more accessible, but also provides industry with a way forward with regards to training and upskilling and perfectly ties into what micro-credentials can offer.

Micro-credentials and Apprenticeships

As with end-point assessments in England, industry should, and need, to be front and centre with micro-credentials. There are different routes that I would say are required for these micro-credentials, one is to provide an entry-point to bring people into the company/industry, the second is to upskill/reskill their existing workforce. The best, and probably the most cost-effective way to apply this would be for a consortium of companies in the same industry (where this does exist) to collaborate together with an educational partner. As a consortium it would be a bit like developing standards for end-point assessments: identify and develop the skills and learning required to take learners who aren’t ready for a particular job in the industry, to be ready, potentially with different routes depending on the skills that that learner is bringing.

Once these micro-credentials have been created there are two options that this could lead to: the micro-credentials could be made available online, for free ideally, or for a small cost, and the job notices for jobs in this industry would have a link, saying that for those people who want these jobs with X and Y skills but don’t have them all, should undertake this micro-credential first, earn it, and then apply. The downside to this approach is incentivising the learners to do it without a guaranteed job, and not knowing exactly what the learners have prior to them taking the micro-credential. The other, and in my opinion, stronger option is to hire people first, and once they are employed, give them the micro-credential(s) to learn and make the completion of the first micro-credential a condition of continuing employment and passing their probation period.

By employing the learner first, the company can much better gauge at what level the learner is at first, to ensure that the micro-credential is tailored to their requirements (based on their skills), but also so that the company can see the progress and what they can achieve. Upon completion of the micro-credential the learner should receive a digital badge to recognise what they’ve achieved. The consortium can then review the micro-credential annually to ensure it remains fit-for-purpose.

A challenge with incentivising industry with creating training and micro-credentials is of course, the cost.

For British companies, the current apprenticeship levy is a bit of a barrier, as larger companies must pay the levy towards apprentices. The levy can stop some companies from wanting to spend more money on training and education for the rest of their workforce as they’re already having to spend some of their money. The consortium approach would reduce the overarching cost per company, but in these challenging times, however much a company does spend on their employees, they will make back. The learner gains the skills needed to do the job and then can do the job and do it well, their enthusiasm for the company will be expanded, and they will feel valued and want to stay. If they do end up leaving at some point, as it is an industry-level micro-credential it will be transferable and the whole industry can benefit.

I’ve been at several conferences in the last few months talking about the green and digital transitions and the importance of micro-credentials, to me, this issue of upskilling and reskilling comes to the heart of that discussion. Industry must play a big role in the upskilling and reskilling of (potential) employees to ensure that the skills that they need are being taught in the way that they need.

There is definitely a need for the on-framework style of micro-credentials, but in this instance, industry needs to take the lead as at the end of the day, they are the ones with the need. There are so many examples of education providers creating training and qualifications which don’t suit or fit the needs of industry, by having industry take charge of their own future, it will be a much more agile approach and will reduce the current skills gap in a much shorter timeframe than simply waiting for the perfect employee or external qualification to arrive.

Perfect employees are grown over time rather than arrive fully formed, this style of micro-credential gives industry the perfect opportunity to invest in themselves, and in their future.