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4 ways micro-credentials and skills-based hiring can help displaced workers access jobs of the future

Micro-credentials can help unlock economic opportunity.

Micro-credentials can help unlock economic opportunity. Image: Pexels

Jeff Maggioncalda
Chief Executive Officer, Coursera Inc.
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Future of Work

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  • The World Economic Forum's Future of Jobs Report 2023 forecasts that 61% of workers will require retraining between now and 2027.
  • A shifting labour market, enabled by digital connectivity, means employers are embracing skills-based hiring and micro-credentials to address skilled talent shortages at scale.
  • Skills-based learning can provide an equitable and fast-tracked path to new careers for job seekers while expanding and diversifying talent pipelines for employers.

Digital transformation, automation, and globalization are creating a skilled worker shortage and an unprecedented need for reskilling and upskilling globally. The breathtaking rise of generative artificial intelligence (AI) further compounds the urgency, as a new class of knowledge workers is now at risk of displacement.

The World Economic Forum's latest Future of Jobs Report forecasts that 61% of workers will require retraining between now and 2027, and 4 million new technology-enabled roles will be added to the global labour pool in the same timeframe.

Industry micro-credentials are quickly emerging as an effective tool to address unemployment, nurture job-ready talent, and drive economic growth.
Industry micro-credentials are quickly emerging as an effective tool to address unemployment, nurture job-ready talent, and drive economic growth. Image: World Economic Forum

While workers without a college degree have been hit hardest by labour market disruptions, Coursera data in the Forum's Future of Jobs Report reveals a promising new insight: learners without degrees took roughly the same amount of time to acquire critical skills as their degree-holding counterparts.

The finding demonstrates the potential for industry micro-credentials and skills-based hiring to close skills gaps and address labour shortages. However, displaced workers need flexible and affordable reskilling pathways to successfully transition into new digital jobs. Here are four trends that are helping displaced workers unlock economic opportunity amid a changing job landscape.

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1. Industry leaders expand micro-credentials to train workers for digital jobs

Industry micro-credentials are quickly emerging as an effective tool to address unemployment, nurture job-ready talent, and drive economic growth. In 2018, Coursera partnered with Google and IBM to launch its first entry-level Professional Certificates. These industry micro-credentials are designed to prepare people with no college degree or prior work experience to enter well-paying, in-demand digital careers in roughly six months. Since the pandemic, leading companies and industry experts, including Meta, PwC India, Salesforce, and SAP, have launched micro-credentials for over 25 digital job roles, attracting nearly 7 million all-time enrollments globally.

These micro-credentials focus on digital jobs for which the required skills can be learned online. Initially, they were designed to train for roles like IT support and data science and have expanded to include training in fields like UX Design, cybersecurity, and healthcare. Moreover, these jobs can also often be done remotely, creating opportunities to skill workers everywhere and allowing everyone to access in-demand roles that were previously out of reach.

2. Employers embrace skills-based hiring to address skilled talent shortages and boost workplace diversity

Qualified talent shortages created by new and rapid technological shifts have caused employers to look beyond traditional hiring pools and degree requirements to fill open roles.

According to a recent global Coursera survey, 90% of students believe a micro-credential will help them stand out in the hiring process, and employers said they are 76% more likely to hire a candidate with an industry micro-credential. Global companies, including Google, IBM, and EY, have adopted skills-based hiring to expand and diversify their talent pipelines – and 97% of employers globally are considering following suit. Several US states have also removed bachelor’s degree requirements to unlock talent pipelines to public sector jobs.

Micro-credentials are on the rise as more employers are considering skills-based hiring to address talent shortages.
Micro-credentials are on the rise as more employers are considering skills-based hiring to address talent shortages. Image: World Economic Forum

While more employers are considering skills-based hiring to address talent shortages, verifying a candidate's skills is difficult, especially for entry-level roles, when a career starter or switcher may lack a college degree or relevant prior work experience. Leading Indian employers, including Axis Bank, are working with Coursera to pilot a skills-based recruitment service that matches job-ready talent with companies filling entry-level digital roles. Early success points to a pressing need to bridge the gap between talent and opportunity with new approaches to verify candidate skills at scale.

Sanofi expanded its talent development initiative beyond employees to invest in community workforce development. The company’s social impact initiative offers 20,000 licenses for locals to access Career Academy, comprising over 25 micro-credentials, to build a future pipeline of diverse healthcare talent. States, including California, New York, and Tennessee, have prioritized digital literacy and micro-credentials in their workforce development programmes to prepare displaced workers for in-demand careers at scale.

3. New innovations in online learning help produce job-ready candidates

To maximize the effectiveness of micro-credentials, they must be paired with hands-on, applied learning experiences. Job seekers can take skill assessments to prove proficiency to employers. They can also complete projects that teach them how to use workplace tools and demonstrate their skills through work samples.

Technologies like AI-powered personalized coaching and virtual reality can improve the rate at which learners acquire new skills. Immersive learning collaborations with institutions like Duke, the University of Washington, the University of Michigan, Peking University, and Meta are helping learners on Coursera engage with concepts more deeply in “real world” scenarios, covering a range of skills such as public speaking, leadership, human physiology, mobility, language learning, and training for healthcare practitioners.

4. Building a system of stackable credits to better serve working adults

Perceptions around degree requirements tend to fall into two camps: “everybody needs a degree” or “nobody needs a degree.” But neither is true: higher education must become more flexible, affordable, and relevant. By offering college credit for industry micro-credentials, we can create stackable credentials that offer people multiple pathways to gain employment, earn college credit, and pursue a degree.

The Louisiana Workforce Commission’s Tech Ready initiative offers underemployed Louisianans the opportunity to earn digital skills and micro-credentials from companies like Google, IBM, and Intuit to help them land good jobs. Many of these credentials have ACE Credit Recommendation, which helps learners who complete eligible certificates earn credit towards a degree. Academic institutions such as the University of Texas System are also integrating these credentials into their degree programmes to produce graduates who are both “broadly educated and specifically skilled.” The Ministry of Science and Education in the Republic of Kazakhstan launched a nationwide initiative to prepare 20,000 students and faculty across 25 public universities for the digital economy by embedding over 600 career credentials into degree programmes.

Institutions have an important role to play in creating a pathway for displaced workers through skills-based hiring, and job-relevant micro-credentials can play a powerful role in preparing talent for those new and emerging careers.

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