Key Points

• Noncredit skills training provides a viable option for addressing the skills gap.
• Employers and workers require more flexible options for addressing worker shortages in various occupations.
• Noncredit skills training programs can be implemented and operational quicker than traditional credit-bearing two- or four-year degree programs.
• Expanded use and employer recognition of industry-recognized credentials provided by noncredit programs presents an effective means of connecting the supply of and demand for labor.

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Executive Summary 

The United States finds itself in the midst of a unique labor market problem: Job openings vastly outnumber unemployed workers. Many experts and industry leaders have attributed this problem to the mismatch between the skills that workers possess and the competencies employers need. With the skills gap presenting a modern economic problem, what should be the appropriate response to upskill workers and close the gap?

As one solution, this report proposes increas­ing community colleges’ role in upskilling workers through noncredit skills training programs. Whereas credit-bearing programs measure progress based on time spent in class or on a subject, noncredit skills training is based on the time required to gain and demonstrate the occupational competencies needed in labor markets. This kind of training is compara­tively quick and occupationally focused—an import­ant benefit in the current labor market.

Noncredit skills training programs have not historically had a nationally recognized, uniform system for issuing credentials that demonstrate acquisition of occupational competencies needed to perform in jobs. However, in recent years, com­munity colleges have expanded the use of creden­tials issued by third-party industry associations after completion of noncredit training programs. Because industry-recognized credentials are developed with employers and industry experts, they provide a promising means of connecting human skills acqui­sition with gainful employment.

This report explores recent developments in noncredit skills training and evaluates the viabil­ity of noncredit training programs as a solution to the skills gap. No comprehensive federal or national data sets on noncredit student outcomes or pro­gram results exist, so this report relies on recently developed case studies, original surveys, and inter­views with community college officials. Through these qualitative sources, this report highlights how noncredit training programs respond to employers’ workforce needs, addresses quality concerns, and demonstrates noncredit training program financial affordability for students.

Noncredit skills training, in concert with the expanded use of industry-recognized credentials, is an important tool for developing human capital and addressing current and future labor market chal­lenges. Federal policies, including recognition of noncredit skills training, must evolve and grow to support the expanded use of new learning methods and demonstration of occupational skills attainment.

Introduction 

Ten years after the Great Recession, the United States economy is experiencing full employ­ment and rising growth rates. In December 2018, a record 163.2 million people were in the labor force, and the labor force participation rate reached 63.1 per­cent.¹ The national unemployment rate is now hov­ering around 4.0 percent—a level not seen in nearly 20 years.² In this historically tight labor market, employers are finding it difficult to satisfy their labor demand. According to US Department of Labor data, there were nearly 7.3 million job openings in December 2018, significantly greater than the 6.3 million individ­uals who were unemployed during the same month.³

Several economic factors influence the availabil­ity of job openings and labor supply, including tech­nological change and access to quality educational resources. One of the most important factors explain­ing the current disparity between available jobs and labor supply, however, has been the “skills gap,” or the difference between the skills needed for occupations and the skills workers hold.

To address the skills gap, economists and policymakers have proposed improving access to—and delivery of—job training and education. Workers themselves recognize the need for this kind of training, with nearly 35 percent of respondents in a recent Pew survey reporting that they do not have the education or training needed to grow successfully in their jobs.⁴

While workforce skills training is structured and delivered in different formats, it typically results in some type of credential to demonstrate completion and competency. Labor market data demonstrate that nondegree credentials—that is, certificates, licenses, or industry certifications other than an associate or bachelor’s degree—add value to workers who hold them, providing them with greater earnings than those who do not possess such credentials. In some industries, the earnings premium for holding a cre­dential is as high as the earnings premium for holding a college degree.⁵

These training programs are particularly useful because participating students are not tied to enroll­ing in credit-bearing programs, which usually have longer time requirements and course sequences and delay transition to the workforce. The longer time needed to complete a credit-bearing training program is particularly difficult for unemployed or low-wage workers who need enhanced earnings as quickly as possible.

Nondegree credentials may be obtained through both postsecondary credit-bearing and noncredit edu­cation and training programs at a number of institu­tions.⁶ Given the increasing need to more effectively and quickly upskill workers for unfilled occupations, an emerging option is expanding noncredit skills training at community colleges.⁷ Community col­leges are already at the forefront of noncredit skills training. The expansion of noncredit skills training at community colleges, and the factors influencing its efficacy and use, provides an important framework for policymakers to consider, especially in light of ongoing questions regarding college affordability and the return on investment of various postsecondary education alternatives.⁸

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Notes

1. US Bureau of Labor Statistics, Civilian Labor Force Participation Rate, Federal Reserve Bank of St. Louis, January 7, 2019, https:// fred.stlouisfed.org/series/CIVPART.
2. US Bureau of Labor Statistics, Civilian Unemployment Rate [UNRATE], Federal Reserve Bank of St. Louis, March 4, 2019, https:// fred.stlouisfed.org/series/UNRATE.
3. US Bureau of Labor Statistics, “Job Openings and Labor Turnover Summary,” February 12, 2019, http://www.bls.gov/news.release/ jolts.nr0.htm; and US Bureau of Labor Statistics, “The Employment Situation—December 2018,” January 4, 2019, https://www.bls.gov/ news.release/archives/empsit_01042019.pdf.
4. Pew Research Center, The State of American Jobs, October 6, 2016, http://www.pewsocialtrends.org/2016/10/06/the-state-of-american-jobs/.
5. Anthony P. Carnevale, Stephen J. Rose, and Andrew R. Hanson, Certificates: Gateway to Gainful Employment and College Degrees, Georgetown University Center on Education and the Workforce, June 2012, https://cew.georgetown.edu/wp-content/uploads/2014/11/ Certificates.FullReport.061812.pdf; and Stephanie Ewert and Robert Kominski, “Measuring Alternative Educational Credentials: 2012,” US Census Bureau, January 2014, https://www.census.gov/prod/2014pubs/p70-138.pdf.
6. Postsecondary credit-bearing education and training programs are delivered by postsecondary institutions, such as community colleges and universities, that are accredited by one of six regional accreditation organizations recognized by the US Department of Education. Through regional accreditation, these postsecondary institutions issue credit based on seat time and successful demonstra­tion of knowledge during the required seat-time block. By contrast, postsecondary noncredit education and training programs are pro­grams in which course progression and completion are weighed on demonstration of competency rather than a credit-bearing seat-time schema.
7. Michelle Van Noy et al., Noncredit Enrollment in Workforce Education: State Policies and Community College Practices, American Association of Community Colleges, 2008.
8. Meghan L. Arena, “The Crisis in Credit and Rise of Non-Credit,” Innovative Higher Education 38, no. 5 (November 2013): 369–81.