Built to Scale?

Executive Summary

In response to the rapid pace of digitization of the economy, evolving labour market, and changing employer skills demands, public universities, colleges and a litany of for-profit education and training providers are racing to roll out new programs to equip students and workers with in-demand digital skills. In recent years, new types of credentials have emerged. In contrast to comprehensive university or college degree or diploma programs that require substantial time and financial commitments, these credentials are short in duration, tend to focus on a particular skill, and are often comparatively affordable.

Alternative credentials, in particular microcredentials, have become a major priority for policymakers, postsecondary institutions and employers, viewed as a solution to upskill, retrain, or formalize competency-based learning.

Given the rapidly changing technical tools and products of the technology economy, microcredentials have potential to support the development of digitally intensive skills and workers. Using a novel labour market information source through LinkedIn profile data, this report assesses the current uptake of microcredentials in two digitally-intensive occupations: data scientists and software professionals. We compare those who have completed microcredentials with those who have not across experience levels, skills profiles, educational attainment, and other characteristics. The report's findings inform both higher education and workforce practitioners who are building microcredentials, and policymakers seeking to understand and support this new form of learning and upskilling.

The study finds that professionals that report microcredentials on their LinkedIn profiles:

• Represent a small minority of professionals in the two digital occupations, accounting for just 3.4 percent of data scientists and 3.2 percent of software professionals.
• Tend to have more professional experience (i.e., more than five years).
• Are more likely to list skills, tools, and technologies that are more recent, such as machine learning, compared to those without, and less likely to list broad knowledge areas such as "software development" and "computer science".
• More commonly have educational backgrounds outside of STEM fields of study, in the Business, Humanities, Health, Arts, Social Sciences, and Education (BHASE) fields.
• Are more than twice as likely to hold an MBA, the largest difference among types of credentials attained.
• Report no meaningful differences in their job titles, seniority levels, or industry of employment, including ICT industries specifically.

Despite the low uptake of microcredentials among the two digital occupations, this study reinforces the thinking that these shorter credentials are being used as an upskilling tool for professionals established in their careers, complementary to existing credentials they hold. Though caution is warranted in extrapolating to other occupations and fields of study, the findings suggest that microcredentials are more often held by digital professionals with non-STEM educational credentials (such as MBAs), potentially as a way to develop complementary digital skills and/or to signal those skills to employers. University degrees develop broadly applicable knowledge, while microcredentials allow a worker to demonstrate competency in a specific skill, application, or technology tool that can leverage the knowledge gained through the university degree.

We offer the following policy recommendations and suggestions for future research:

Better data sources are required to assess the use and value of microcredentials. Future approaches could explore how private data sources like LinkedIn profiles can be used in conjunction with public data sources collected by Statistics Canada in ways that preserve and protect privacy to improve labour market analysis.

Quality assurance of microcredentials in Canada should be a priority for education leaders and policymakers. While these new alternative credentials hold promise, the absence of common definitions and quality frameworks across Canada limit their growth potential for learners and employers—the ultimate arbiters of microcredential value.

Further research should extend this analysis to adjacent occupations and fields of study. While this study focused on specific digitally-intensive roles (given that the data from online job platforms is most relevant for digitally intensive careers), several adjacent roles can be examined.

Further research should explore the benefits of microcredentials to different populations and learners. A critical study would be to dive deeper into the general applicability of microcredentials and their impacts on specific demographic groups.

In conclusion, this study pioneers a novel source of Canadian labour market information and underscores the potential of microcredentials as a complementary tool for career development. Rather than replacing traditional degrees, microcredentials can augment Canada's existing educational infrastructure. However, addressing data limitations and quality assurance challenges will be essential to fulfilling their potential for digital skill adoption. As the digital landscape evolves, microcredentials offer a promising path forward for Canada's education institutions, helping professionals stay competitive and adaptable in an ever-changing digital world.

Microcredentials in Context

Summary

Microcredentials have gained attention in their emergence to address the evolving needs of the labor market and provide learners with targeted skills and competencies. In this section, we scan existing research on microcredentials, exploring the labor market impacts and implications for microcredential policy. We focus our search on English-language studies, and include grey literature and non-peer-reviewed journal articles. The studies provide insights into the benefits, challenges, and potential impacts of microcredentials on workforce development and employability.

The literature review finds that these credentials offer potential solutions to the rapidly evolving digital economy's challenges. Microcredentials may enhance labor market value for workers who hold them, provide support for lifelong learning and retraining, and shape employer perceptions of skill competency. The studies also provide glimpses into the future of microcredentials, which offer the potential to bridge skill gaps, help learners adapt to emerging job roles, and support employers to embrace competency-based hiring. Despite these opportunities, challenges and gaps remain, necessitating further research and evaluation to fully harness the potential of microcredentials in transforming the landscape of digital labor markets.

Microcredentials enhance labor market value for workers who hold them, provide support for lifelong learning and retraining, and shape employer perceptions of skill competency. Despite these opportunities, challenges and gaps remain, necessitating further research and evaluation to fully harness the potential of microcredentials in transforming the landscape of digital labor markets.

Microcredentials in the Canadian education and skills development system

Investments in education are widely recognized as one of the critical drivers of societal progress and economic growth. Years of research have established a link between education (seen as an investment in human capital) and income growth.4 Furthermore, studies have shown that human and non-human capital investments account for an overwhelming proportion of postwar growth in the United States.5 Research linking education and economic growth have typically used postsecondary credentials (such as a bachelor's degree) as the measure of educational attainment. An important debate has centered on the function of formal credentials, and whether they accurately reflect knowledge and skills acquisition, or represent a way to signal one's abilities to employers or within society.6 Without delving into this debate, the practical assumption is that credentials likely do both.

This report looks to identify microcredential holders in highly technical digital occupations, to better understand the competencies they seek to acquire and signal to employers, and how they fare relative to the rest of the professionals in these occupations. In scanning the literature, a systematic review of microcredentials in higher education, conducted in the US, reaffirms their early stage of development.7 The review found only two empirical studies, published in 2020 and 2021. Its major conclusions were that challenges remain with microcredentials, and that they should primarily be a complement to traditional higher education programs, rather than a replacement. Still, despite the limited academic research and evaluation, microcredentials have attracted attention from governments and international organizations; some countries include them in their national qualification frameworks.8 In Canada, a number of education and skills institutions and research centers have undertaken analysis of microcredentials. The Future Skills Centre identifies microcredentials as quick training programs that rapidly develop specific skills, demonstrating certified competency upon completion.9 They highlight that, while Canadian postsecondary institutions are increasingly offering microcredentials via online courses geared to addressing lifelong learning and career advancement goals, employers need to become more familiar with these credentials. An adjacent report from the Diversity Institute finds microcredentials have the potential to bridge skills gaps and address future labor market needs in Canada.10 However, their nascency presents challenges in widespread adoption. The authors of these studies find microcredentials are valued for workplace-related skills, agility, flexibility, and collaborative development. Their recommendations aim to advance micro-credential adoption, enhance their value, and strengthen collaboration within the ecosystem.

Colleges and Institutes Canada (CICan) conducted a scan to define and understand the landscape of microcredentials in Canada.11 This report briefly examines international microcredential trends and explores Canada's microcredential developments and research initiatives. They suggest microcredentials can address demand for upskilling and reskilling in the Canadian labor market, in response to technological changes and pandemic-induced job losses. They call for collaboration to establish a national consensus on microcredential characteristics.

Higher Education Strategy Associates (HESA), a consultancy based in Toronto, reports that integrating microcredentials in Ontario is hindered by the existing education system's inability to integrate these credentials into degrees and diplomas, especially when earned from different institutions.12 This limitation reduces their value in a labor market that primarily recognizes diplomas and degrees. The issue stems from a need for standardized, verifiable information about the learning outcomes of microcredentials. This lack of data makes it challenging for learners seeking advanced standing in a degree or diploma, resulting in high information costs. The study proposes solutions, including providers transparently stating the industry value of microcredentials, third-party assessments, and creating a provincial bank of assessments to address the integration problem.

At the provincial level, a survey conducted by the Higher Education Quality Council of Ontario (HEQCO) found that 75 percent of respondents displayed interest in this type of professional development.13 The study highlighted that awareness and understanding of microcredentials were limited across all groups surveyed. Employers expressed uncertainty about the term itself, while prospective students sought affordability and employer recognition. The report recommended that institutions emphasize the alignment of microcredentials with quality markers, including stackability, flexibility, assessment, accreditation, and standardization. Another study led by the Northern Alberta Institute of Technology (NAIT), in collaboration with Bow Valley College (BVC) and the Southern Alberta Institute of Technology (SAIT), employs grounded theory to understand the value of microcredentials among Alberta employers and individuals (earners) compared to traditional credentials.14 They similarly find that awareness needs to improve, and propose measures to enhance adoption including targeted marketing and leveraging standardizing microcredential metadata to address employer concerns.

Labour market impact and equity considerations

Frenette & Handler have conducted the only notable empirical study in Canada to date, exploring the impacts of short post-secondary education programs following job loss. After a permanent layoff, workers often face financial challenges, with research consistently revealing that post-layoff earnings decline sharply and remain below pre-layoff levels for years.15 To address this, some invest in education before rejoining the workforce. However, recent evidence shows that only a small number of laid-off workers enroll in post-secondary education, often choosing short-term, career-focused programs or taking individual credits. The findings indicate that individuals who obtained college or CEGEP certificates or diplomas after a layoff experienced substantial increases in annual earnings, particularly those in STEM or healthcare fields. In contrast, non-STEM programs or microcredential graduates experienced no earnings gains.

There has been more research in other jurisdictions. A Brookings Institution report sheds light on several insights about FastForward programs in Virginia.16 These programs attract a diverse student population, including more Black students, males, and older individuals. Enrollment patterns between FastForward non-credit and credit-bearing programs are distinct, with limited student flow from non-credit to credit programs. Despite this finding, completion rates and industry credential attainment in FastForward programs are high. The unique attributes of non-credit continuing education programs, such as their diverse enrollment and high completion rates, suggest that they provide an alternative pathway to skills and workforce opportunities for traditionally underrepresented populations.

A Columbia University study investigates the labor market returns of stackable credentials in the United States, analyzing various data sets and applying novel empirical approaches due to the scarcity of data.17 The findings suggest that while the earnings gains for degrees are robust and certificates generally yield positive results, there needs to be clear evidence of the specific earnings gains from stacking these credentials. Additionally, the report notes combining traditional degrees and microcredentials can provide a synergistic effect, complementing each other to better prepare individuals for the labor market. The future value of stackable credentials may increase as labor market trends shift toward a more educated workforce, providing opportunities for marginalized workers to augment their skills.

A study by the Lumina Foundation finds that a majority of Americans aged 25 to 64 lack qualifications beyond high school, limiting their job prospects.18 This report explores outcomes for adults who secure non-degree post-secondary credentials, like certificates, within two years. Drawing from seven studies involving 49 community and technical colleges, the findings reveal that such credentials enhance employment prospects and, to a lesser extent, earnings. Across data sets, holding a non-degree credential corresponds to a 5 to 15 percent higher employment likelihood. Even brief credentials (under six months) yield a four to seven percent employment boost. The report recommends integrating short-term credentials into longer pathways and revising financial aid programs accordingly.

In the United Kingdom, a report from Oxford University examines the impact of digital microcredentials on worker earnings in an online task-based labor market.19 The study finds that acquiring additional microcredentials leads to an average earnings increase of 8.9 percent. The most plausible explanation is that microcredentials reduce employers' uncertainty about worker abilities, therefore demonstrating microcredential completion provides a signaling effect for employers. The research rules out alternative explanations, such as worker productivity or effort changes. The study emphasizes the potential for microcredentials to aid skilled individuals facing discrimination in the labor market or help match skills to rapidly changing demands.

Analysis of the Microcredential Data

As noted above, data science occupations have only been reported for about 15 years; therefore, our methodological approach is to segment digital professionals by years of experience across three tiers, to assess differences-based variables including seniority, skills, industry, and education. We categorize years of experience as such:

Microcredential reporting among digital sector professionals

Table 6 details the proportions of digital sector professionals who hold microcredentials by years of experience. The LinkedIn data indicates that approximately 1 in 29 data scientists (3.4 percent) and 1 in 31 software professionals (3.2 percent) report a microcredential on their profile. Professionals with more experience (six or more years in the occupation) are more likely to report completion of a microcredential.

Table 6

While overall microcredential uptake appears to be very low today, this data allows for deeper analysis of this group of microcredential holders against their peers. The next section analyzes the differences between data science and software professionals to understand how microcredential holders fare relative to the rest of the professionals in their respective fields.

Examining differences among digital sector professionals who report holding microcredentials

The primary focus of our analysis is to discern potential disparities among professionals who hold microcredentials relative to the rest of their respective professions. Simply put, we look at how a worker listing a microcredential on their LinkedIn profile impacts their stated skills and career. We also look at differences in career background between those with microcredentials and those without. To do so, we calculated the normalized proportions of skills reported among those holding microcredentials to compare against the larger sample of professionals who do not hold microcredentials.

We first compared how skill disclosure differed between those who hold microcredentials compared to those without. Figures 1 and 2 show both the five skills that microcredential holders were more likely to list (compared to non-microcredential holders), and five skills that they were least likely to list. Notably, Figure 1 underscores that data science professionals with microcredentials tend to report skills and tools that have only emerged in popularity in the past 10 years, such as machine learning and Tableau (a data visualization program). Similarly, Figure 2 shows a larger proportion of microcredential holders in software professions report having skills in React.js, Node.js, Express.js, which tend to be a design and user experience-oriented set of skills compared to the rest of the profession. In contrast, there were proportionally more professionals without microcredentials reporting skills such as software development, Java, C, and C++ in both professions. This difference in reported skills suggests data scientists and software professionals with microcredentials are trained in more modern front-end development skills and tools, whereas professionals without microcredentials report more traditional software and operating system development skills. The following section examines the field of study among digital sector professionals.

To compare by reported educational field of study, Figures 3 and 4 differentiate for two categories: in STEM (Science, Technology, Engineering, and Mathematics) and BHASE (Business, Humanities, Health, Arts, Social Sciences, and Education). While both professions reported a strong preponderance in STEM qualifications, microcredential holders were more likely to report a non-STEM field of study among both professions by notable margins.

While both professions reported a strong preponderance in STEM qualifications, microcredential holders were more likely to report a non-STEM field of study among both professions by notable margins.

Figures 5 and 6 show differences among microcredential holders with respect to their highest educational attainment. Professionals in both occupations report relatively advanced levels of educational attainment, with more than half of professionals reporting a graduate degree. Most notably, a higher prevalence of Master of Business Administration (MBA) graduates is observed among professionals with microcredentials. MBA holders are more than twice as prevalent among those with microcredentials in both professions.

Most notably, a higher prevalence of Master of Business Administration (MBA) graduates is observed among professionals with microcredentials. MBA holders are more than twice as prevalent among those with microcredentials in both professions.

We examine differences in reported current job titles between those with microcredentials and those without in Figures 7 and 8. There are no significant differences in job titles among data scientists, with differences in the low single digits. Among software professionals, differences are more pronounced, with microcredential holders more likely to report job titles such as user experience designer, full-stack engineer, and front-end developer. Conversely, software professionals without microcredentials report more software engineering positions.

We next examined whether microcredential holders were employed at higher or lower levels of seniority. For this analysis, we classified job titles into entry, middle, or senior categories using the prefix or suffix denoting an occupational hierarchy. For example, entry positions were categorized as intern, junior, or analyst, whereas middle position titles are categorized as having no affixes, and senior positions are categorized with title affixes such as senior, lead, manager, director, or head. Figures 9 and 10 show small differences in job title seniority among data scientists with and without microcredentials. Figure 10 shows that software engineers with more seniority were less likely to report microcredentials, though the statistical analysis (Tables 7 and 8) again found no statistical significance in the difference between the two groups. These statistical findings suggest that microcredential holders have similar levels of seniority relative to the rest of their respective professions.

Table 7

Table 8

Figures 11 and 12 compare data science and software professionals based on industry of employment. For both occupations, while magnitudes are small, microcredential holders were more likely to report employment in the computer software industry. Additionally, we analyzed whether microcredential holders were more or less likely to be in Information and Communication Technology (ICT) industries and found no significant differences between those microcredential holders and those who do not hold microcredentials.

Recommendations for Policy and Future Research

Better data sources are required to assess the use and value of microcredentials. This report assesses the uptake of microcredentials among highly technical digital sector professionals. LinkedIn profile data provides a granular, dynamic source of labor market information (LMI), unveiling skill and competencies reporting, job seniority, and educational granularity that is otherwise unavailable in government and administrative data sources. Existing data sources, such as Statistics Canada's Education and Labour Market Longitudinal Platform (ELMLP), can provide an alternative source of LMI for longitudinal microcredential research, albeit with less program granularity and timeliness as compared to LinkedIn profile data. Future approaches could explore how private data sources like LinkedIn Talent Insights can be used in conjunction with public data sources collected by Statistics Canada in ways that preserve and protect privacy to improve labor market analysis.

Standardizing microcredentials in Canada should be a priority for education leaders and policymakers. While these new alternative credentials hold promise, the absence of common definitions and quality frameworks across Canada limits their growth potential for learners and employers—the ultimate arbiters of microcredentials' value. Standardization efforts, especially as they relate to quality and value, should align with institutional microcredential offerings in providing verification and assurance to employers and prospective students.

Further research should extend this analysis to adjacent occupations and fields of study. While this study focused on specific digitally intensive roles (given that the data from online job platforms is ideal for digitally intensive careers), several adjacent roles can be examined. Given their similar incentives for accurate self-reporting of career information, adjacent professions such as security researchers or even relatively obscure professions, such as technology founders, offer an intriguing avenue for further research. On the other hand, examining less digitally intensive occupations might also be worthwhile, but technically more challenging. This larger scope could shed light on whether the utility of microcredentials is truly generalizable to a broader range of professions and help provide a more comprehensive understanding of labor market-related information. Specifically, an extension to this work can look at occupations in information and quantitative-intensive occupations, like business intelligence analysts, data analysts, and consultants.

Further research should explore the benefits of microcredentials to different populations and learners. Finally, a critical study would be to dive deeper into the general applicability of microcredentials and their impacts on specific demographic groups. This includes answering questions like: Who do microcredentials benefit most? Are different income earners, age groups, or genders affected differently by microcredentials?

Appendix

Table A

Table B: List of Microcredential Education Providers

Table C: LinkedIn Skill Disclosure and ONET Job Posting Skill Reporting For Data Scientist (Software Professional)

Table D: LinkedIn Skill Disclosure and ONET Job Posting Skill Reporting For Data Scientist (Software Professional)