The blog of the Urban Institute
May 27, 2020

How Focusing on Competencies in Higher Education Can Support the Economic Recovery

With unprecedented unemployment because of COVID-19, many Americans who find themselves out of a job will be trying to find new ways to translate their existing skills and knowledge for employers or will seek new education and training that can help them find a new job.

Our current labor market places a high premium on postsecondary degrees, but degrees may not always signal job seekers’ competencies—their knowledge, skills, and abilities. This credentialing system can cause inefficiencies in the labor market, hindering good job matches between employer and worker. And these inefficiencies may be exacerbated as we seek ways to recover from the economic crisis, as job seekers search and apply for new jobs.

One way to address these challenges is for colleges and universities to clearly articulate the competencies their programs impart. Some credentials, such as industry certifications, may well represent the competencies relevant to an occupation. Others, such as degrees, may not communicate what holders know but, instead, communicate that they persisted through several years of higher education. A competency-based system can serve as an equalizer across credentials so they can be compared “apples to apples”; employers know what they’re getting from an applicant, and a job seeker can clearly communicate what they can offer to an employer.

However, we are a long way from a competency-based system in this country. In a new brief out today, we highlight strategies that policymakers can use to encourage a move toward competencies in postsecondary education. State policymakers (PDF) have particularly crucial roles in these efforts. They can:

  • Craft legislation that encourages colleges and universities to be more transparent about the competencies their programs impart and the labor-market outcomes they achieve and that incentivizes skills-based hiring approaches among employers.
  • Adopt competency-based education quality standards. The Competency-Based Education Network has developed a framework (PDF) to evaluate program quality that can be applied not only in assessments of formal competency-based education programs but also to other academic, career, and technical education programs.
  • Analyze local labor markets. Education and training providers may not know which jobs are in demand in local labor markets, how competencies map to the credentials they offer, and what competencies job seekers need to obtain in-demand jobs. States can negotiate access to proprietary job-listing data (from websites such as Burning Glass or Indeed) that can provide valuable insights into these questions. States could also lower the cost for education and training providers that want to use these data, or they could perform local labor market analyses and provide them directly to education and training providers.
  • Identify data solutions that would help colleges and universities track and communicate competencies. States might also negotiate cheaper contracts or rates for data and software that could lower costs for individual institutions.

Changing our higher education systems to become more competency based would be challenging even under normal circumstances. Major cultural shifts in higher education are needed to support such a system. But this economic crisis can spur education and workforce leaders to ensure competencies are embedded in credentials and that these credentials help employers and job seekers make more efficient matches that speed the economic recovery. States that have already taken steps in that direction may be poised for a more agile recovery.

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