- 31 Aug 2022
- Managing the Future of Work
Credly's Jonathan Finkelstein on the evolving language of skills
Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Harvard Business School professor and visiting fellow at the American Enterprise Institute, Joe Fuller. Jonathan Finkelstein joins me today. As the founder of digital credential firm Credly, Jonathan is uniquely positioned to assess the skills-based hiring trend. Credly, which was acquired by the education company Pearson in early 2022, works with corporations, universities, and others to provide digital certificates and data analytics. How can employers, workers, and skills providers navigate the welter of competing badges and certificates? How does this trend dovetail with the increasing automation of HR? And what’s the role of data analytics more broadly? We’ll talk about that and what it all means for the labor market and the future of education. Welcome to our podcast, Jonathan.
Jonathan Finkelstein: Joe, it’s a pleasure to be here. Thanks for inviting me.
Fuller: Jonathan, in the last little while, there is this increasing frequency and regular dialogue about skills, skills-based hiring, moving away from traditional credentials. I think our listeners really benefit from here where Credly fits in that landscape.
Finkelstein: As you and I sit here today, people are learning things. Their skills are being demonstrated in learning settings, in formal assessment environments, even on the job. Historically, the outcomes of those demonstrations of people’s capabilities have all been recorded, if at all, in different types of formats. They have been often ignored or left to the individual to self-report. Where Credly sits is squarely in the center of all of the outcomes from all of the different kinds of learning and certifications and credentials, regardless of their context. They deserve to be recorded—and recorded in a way where each person can carry the verified evidence of those skills into their next logical step in their professional journey. Credly is essentially a customer and a partner to virtually everyone in the skilling, training, HR ecosystem, because of that very particular niche that we occupy.
Fuller: Well, let’s take both sides of that equation. There are companies. Do you work with them, both to identify what credentials they’re bestowing on workers and to catalog those for their own performance management systems? Or how would you define the service that a company—that your client—uses? And why is it valuable to them?
Finkelstein: There are the organizations that help upskill and certify individuals whom they do not employ. These are industry certifications and credentials, third-party training providers, colleges, universities. These organizations are looking to help the individuals who engage in their assessments and their training, ultimately to have a good career outcome—whether it’s a promotion, a career change, a new job, the ability to keep their job. Those organizations measure the value that Credly provides in exactly that way. Employers, often large enterprises, have increasingly been issuing certifications and credentials to their own employees so that they can create a common language for skills across often multiple territories and departments. They may have many learning management systems, boot camps, learning programs, even third-party partners that come in and do training. But Credly becomes the source of truth for skills across the company and the basis on which human capital decisions can be made. At the end of the day, the individual is making choices about how they upskill, where their interests are, where they want to go. Very often, that learning is happening outside the job. It might be sponsored by your manager or your employer, but you’re out earning a project management certification, a PMP from the Project Management Institute, or you may have just completed an AWS Cloud Practitioner certification. So those companies, those employers, really appreciate the ability to get a 360-degree view of what skills you have, in addition to whatever they may have issued to you as they set the standard for what skills they care about inside their company.
Fuller: I can certainly say as a CEO, I would’ve valued having a coherent skills inventory across all our different operations and offices. How does this extend outside the realm of what I’ll call pretty obvious credentials? What about a company’s leadership training course or giving-and-receiving-feedback course, those things that are softer, maybe more different over employers and maybe, frankly, where some employers will be a little skeptical about how robust a credential is if it doesn’t come from a branded vendor?
Finkelstein: Well, certainly there is an acknowledgment, I think, broadly in the workplace that soft skills are essential. Yet, they have historically been the hardest ones to assess, especially at the top of the hiring funnel. We have a system today in which recruiters, in order to sift through very large volumes of applications and resumes—which are looking for keywords, they are looking for capital letters that they recognize, and often whether you have a traditional degree or not. But at the end of the day, they ultimately get down to a handful of candidates that they’ve interviewed. That’s when they begin to assess the soft skills. What we’re seeing is a growing appreciation for credentials that make the so-called human skills much more visible as part of those credentials. These are credentials like the ones created by groups like the Education Design Lab, which work with community colleges and other universities to create a standardized set of soft- skills-based assessments that can be deployed on college campuses and embedded within curricula. Also, something that we’re seeing is the use of soft skills embedded in technical certifications. You’ll see both a very explicit and often an implied set of soft skills, even in the technical certifications.
Fuller: It sounds as if you’re able to provide that inventory and validation of certification, but it’s based on a formal skills-provider program as opposed to, let’s say, a program ginned up inside the four walls of a single company that hasn’t stood the market test of being adopted by multiple parties and validated using significant investment in research and testing results. Is that right?
Finkelstein: Joe, the elegance, if I may, of the role that Credly plays is, we create a common framework for describing achievements and for providing transparency as to how and where the skill was assessed. What was the context? Was it a psychometrically valid assessment in a proctored test center? Was it on-the-job performance reviewed by a manager? Was the credential issued by a department, or is it backed by an entire company or an assessment organization? There are credentials that fit that whole gamut that you’ve described. But you can actually sift through them, because they share a common, transparent data format. We’re adding transparency structure, and the ability for an organization to describe what it is that they’re willing to stand behind.
Fuller: Well, the value of that thing has certainly been demonstrated in a variety of domains, ranging from skills to financial reporting. So if I’m an employee, and I’m getting the benefit of Credly recognizing my learning path and the credentials I have, and I’m choosing to leave, to move on to another firm, how is it that I keep a hold of Credly’s validation of what I’ve got, such that another employer will accept it as a legitimate currency and not a fraudulent currency?
Finkelstein: It’s actually at the very heart of the value proposition that we offer to all of the different stakeholders in the network that we’ve built. So first and foremost, if you are an individual person, you’re an employee at a company, and you earn a credential, whether it’s from your employer, or maybe you earned it while employed from a third party, that credential is yours. You establish your own profile or wallet, if you will, on our platform, and multiple organizations can write to it. We deal only in third-party, verified data points. So it is increasingly common today for people who have earned credentials on Credly to have earned credentials from multiple places. You may have picked up a credential for completing your GED to represent your completion of a high school curriculum. Then you might have gone on to pick up a CCNA from Cisco, your entry into the world of networking, and one of the most popular credentials on the planet. Then you may have picked up skills on the job while working at IBM as part of one of their new-collar work initiatives, maybe through an apprenticeship. And so forth. The ability to actually have that data and those credentials belong to you is a core component of what we do at Credly. It is actually one of the reasons that businesses work with us. So to the latter part of your point, when you move to a new environment, not only is the data about your skills there, but so too is the transparency. Who backed it? What was it for? Is there evidence associated with the demonstration of this? Is there a curriculum connected to it? We also include labor-market data together with those credentials, so third parties can assess its relevance and how it might relate to a broader context. In an increasing number of cases, we have partners who are applying endorsements, third-party endorsements, of that credential, such as the American Council on Education, to help third parties understand the equivalence of that skill from one place to another setting. Notably, how do you go from the workplace back to education again and have some of your workplace learning count for college credit?
Fuller: Jonathan, earlier you mentioned the many different systems that companies have that track employees’ performance management systems, recruiting systems. It’s really a thicket in a lot of large companies. How is it that Credly nests in this United Nations of systems to can get functionality to customers and to serve the interests of those employees efficiently? It must have been a very considerable task.
Finkelstein: We like to pride ourselves in being a Switzerland. So from a technical perspective, it means we’ve had a very integration-first approach to our work right from the very start. When it comes to the issuing of credentials, which in a very basic sense is a verified claim by a third party about your skills or capabilities, we integrate with a whole range of popular learning management systems, systems that do assessments. So whether it’s organizations like Degreed or Edcast, that have LXP platforms, or cornerstone assessment platforms like Pearson VUE or criterion middleware API systems like Zapier or Workato, all of these tools are gathering data about activities that people are engaged in. Credly has the ability to connect to those at just the right moments—when there’s something that is resume-worthy, when there’s an achievement that matters—and trigger the issuing of a certification or a credential on our platform. You’ll also find that on the other side of the talent marketplace, the labor market, we have employers, and we have job boards and HR systems that are looking to know what skills you have. So we also integrate on that side of the ecosystem, both from the enterprise and the mid-market level. These are HRIS systems that can both trigger the issuing of certifications, but also consume them and verify them in real time, put them in third-party profiles. If you’ve used a job or talent platforms recently like ZipRecruiter or Upwork, you’ll have seen Credly as the source of truth for certifications on the profiles within those systems. Those partnerships rely on what we call Credly’s data services, and that helps people connect to the right next opportunity. It helps enterprises more efficiently and confidently find the right talent and make matches much more quickly and effectively.
Fuller: The skills debate that, of course, we’ve been featuring a lot in this podcast—and also, we’ve used some of our research to try to incite a broader and more active conversation about skills development and skills-based hiring, as opposed to traditional credentials that employers have used as proxies to make employment decisions—that’s been a pretty American conversation. How do you serve international markets, global companies? What are the challenges relative to what you’re providing, given the fact that you’re probably dealing with companies with operations worldwide?
Finkelstein: I would say, just looking at the Credly network today, about half of the individuals on our platform today are outside of the United States. Top geographies outside of North America include India, across Europe, the APAC countries, Australia, China, Japan, a large and growing presence in South America in countries like Brazil. I think when you look at... if you take India, for example, it’s one of our biggest earner markets—when I say earner, I mean somebody who has earned a certification or credential. I think part of that is, there’s obviously a growing reliance by tech companies on going outside the United States for tech talent. The fact that 85 percent to 90 percent of the most-valued IT certifications are issued on our platform is a good indicator. And those certifications are issued globally. People around the world are earning certifications that might relate to U.S.-based or global companies around particular skills. But you’re also seeing, just as we are in the U.S., a growing realization that the traditional degree is not the only and in many cases not the best indicator of whether you are the right person for a given job.
Fuller: As the market for skilled work does get more global, and as you have a proliferation of technologies, given all the many entrepreneurial companies spawning technologies with an increasingly rapid uptake, I’d say, by large companies—which historically have been reluctant to take on new technologies, but now are being more experimental, more willing almost to take on technologies that they view as disposable, all of which require credentialed workers to extract value from those technologies—it seems that you might be facing a proliferation of people who are trying to issue credentials. Is that so? Also, what happens if you get a much more fragmented market, where the rate of growth in the number of credentials being publicized is very high, people aren’t being disciplined about language, and frankly, some of the credentials really aren’t as robust as the ones that are more established in the marketplace?
Finkelstein: I think about this problem a lot. But when you think about it, that’s the world we’ve been living in for decades. There have always been a lot of training providers, a lot of credential providers. What’s different today is, instead of each person being on their own to self-describe what they learned on the job or what they think they learned from a course or trying to represent what was a paper certificate and put that on a resume in some way or on a professional profile, we’ve flipped that model. Instead, we have the source of truth—the organizations that actually can attest to what you did writing that record for you. Regardless of what organization you are, you’re including whether this credential expires or not. You’re talking about the context. Did this take hours to complete, or was this something that may have taken months or years to assess? What was the level of the skill? Was this a foundational or beginner-level skills, is it intermediate or advanced? We’re adding a whole layer of context to what would otherwise have just been a lot of noise. I don’t think about it as a proliferation, as much as I do as digitization and a making more consistent of what has already been going on. Now on the flip side, though, yes, we do see more organizations issuing credentials, taking ownership over what it is they value in the world and are willing to stand behind. I think at the end of the day, though, no one ever complains about having too much data. They may complain about not having the right tools to make sense of them, or responsible AI that actually thinks about how to improve diversity and remove systemic bias, but this is an issue that I think is... this is a data problem that technology can solve.
Fuller: That would seem to be a great use of technology, although the ability for companies to adopt processes that make use of technology, particularly in functions like human resources—where there are a lot of compliance concerns, and confidentially concerns—has got to make it a complicated task. One thing that we noted about your history is that you’ve had a long relationship with Pearson, who’s one of, obviously, the most influential and important sources of content in learning and training, whether it’s in schools or corporate settings that they, I think, were involved with you early. You absorbed one of their business units, and now you have a deeper relationship with them. Can you describe that for us, and what’s motivating that, and how you think that’s going to affect the arc of Credly’s development, and how that reflects where you think the market’s going?
Finkelstein: Absolutely. That was a good summary. Credly was founded back in 2012, essentially creating a market that didn’t exist, which was how do you record skills in a common way so that people can fulfill their full potential? How do you help organizations make human capital decisions on the basis of trusted information about people’s skills? Around the time that we started, Pearson was also entering this space, recognizing this as a worthy problem to solve. We went head-to-head with a business unit that was founded within Pearson VUE, which is one of the world’s largest assessment providers. We acquired that business— Pearson became an investor in Credly, supported our growth. We grew the company together, and last fall started conversations about coming back to the mothership again. We are now a wholly-owned business that’s part of Pearson. Pearson is the world’s largest learning company. They serve customers in over 200 countries through content, assessments, qualifications, data. Pearson, last year or just over a year ago, formed a new business unit within the company to focus on the working adult. It’s called Workforce Skills. They acquired a company based in Sydney called Faethm, which brings future-looking AI to current data sets around skills. We sit together with Faethm and other businesses inside of Workforce Skills.
Fuller: How do we get this type of thinking and this type of capability to smaller companies, to even smaller geographic markets? Can it be configured in a way that small and medium enterprises and their opposite numbers in the public sector can really put it to work effectively?
Finkelstein: Learning happens in so many different kinds of settings. It can happen through an internship you do at a small company. It can happen through a training provider that might train people, 50 people at a time. And it can happen in large assessments, where thousands of people a day are earning the same certification. You have to embrace the full ecosystem in order to be able to help individuals tell their full story. That is what we wish to do. And so we have a product ecosystem and a pricing approach in the way we go to market that welcomes every type of organization, no matter how small their training or learning programs are, and no matter how large. We do a lot of the hard work to make sure that we serve very large enterprises: our GDPR compliance, and our ISO and SOC certifications, the way we handle data, we have to pass the highest standards of the most brand-conscious and cyber-security–focused companies. They do care about the training from smaller groups that they might commission to support the upskilling of a sales team, or to help their accounting team learn about blockchain-based accounting. You have to cover the whole tale, if you will, of how learning and training, where it happens, and how it’s recorded.
Fuller: Jonathan, when you think about being able to serve smaller enterprises, do you really think about through the lens of giving that smaller company that isn’t going to have the ability to do pre-employment assessments and whatnot confidence that the candidate they’re hiring has got the skills they’re seeking? Or is it to give the employee of those smaller companies the ability to articulate their skills to the labor market in a way that future employers, maybe even larger employers, will have the ability to see what this person has to offer?
Finkelstein: I think it’s both. Individuals who are presenting themselves, whether it’s face to face or remotely for an interview, it’s about giving them the language to speak about their skills in a way where people don’t have to just take the word of that person. I think, historically, a lot of people who deserve to be having that conversation are summarily dismissed before they even get to the interview, because we look for keywords. We look for proxies to make determinations about what we think somebody actually knows and can do. That’s obviously a problem. I mean, we’re in a world where I think I saw a Bain study that said 80 percent of postings for family-sustaining jobs at large companies list a four-year degree as a requirement. That means that 76 percent of Black Americans and 83 percent of Latino workers are being excluded from ever being considered. For what reason? We do assume that there are specific skills or performance indicators that are only wrapped up in the degree that translate into success on the job that everyone without a degree does not have? No, it’s a legacy approach to trying to winnow down a large quantity of applicants to being able to just make sense of it. But we have the technology to fix that. For the individual, it is about being able to be present even before decisions are being made, so you can be surfaced for your skills, not just at that interview, but while considerations are being made about who to seek out, who to potentially target for an opening, or for upward mobility within a company. For the company, it is about trust as well. It’s about trusting that someone’s going to be able to hit the ground running, knowing what it is that they can do, and having a common and consistent way of assessing their skills and where they came from. I think that’s equally important, whether you’re a large enterprise, or you’re a small business. In fact, you could argue that the impact of a small business on making a decision is even more disruptive to them, because we know the cost of the wrong hire can be a third to a half of somebody’s salary. That can have a really big impact on a small business. So I think it matters across the board.
Fuller: Well, certainly, our Hidden Workers report underscores what you said about how the use of applicant-tracking systems, and these rather blunt variables to filter and rank candidates can have an effect that crowding out many people that are qualified for work. In fact, our research indicated that 90-plus percent of employers acknowledge that the way they go about screening talent leaves qualified candidates outside their consideration set in their effort to really be efficient in the hiring process.
Finkelstein: Just one thing to add to that, Joe. Credly has been introducing new products to the enterprise and to hiring managers that don’t just leave it to luck as to whether these credentials make it into human capital decisions. We’ve really made an intentional effort to think about the algorithms and the matching that we do from the start in ways that don’t perpetuate the kinds of biases that your report, and what you’re talking about, have the kind of decisions that have been made historically that have led us to this status quo. We don’t collect identity metrics, and so they’re not factored into how candidates are evaluated. Instead, we’re extracting the skills that are required to perform in that particular role from your job description. Then we take the skill profile and match it against the skill profile of job seekers. The job seeker skill profile is simply a reflection of the skills that were verified by third parties. We’re really excited about how this approach may make a dent in some of the systemic bias that we see in the hiring ecosystem.
Fuller: Well, that’s certainly exciting. I think we all agree that what an operations person or a manufacturer calls the cost of quality in a production cycle manifests itself in the market for human talent as “mismatches,” where you get people going into jobs that they’re either not prepared for, or they don’t really understand what’s going to be required of them, or you get employers with the best of intentions, hoping they’ve hired exactly the right person, but getting a mismatch. That just wreaks damage on everybody. It hurts the employer’s economics. It creates turbulence and confusion in the person’s job history. You talked about diversity and inclusion. That’s obviously, here we are in the summer of 2022, very much on the minds of companies in the United States. It’s interesting. I’m also seeing some more interest in some European markets on it. How do you account for that in your work, and how do you allow people to see through patterns of data that might bias them unintentionally, but to continuing to hire people that look like the people they’ve hired in the past?
Finkelstein: I think everybody is really eager to unlock the promise of a skills-based labor market that does not rely on proxies, that levels the playing field based on skills from a credential standpoint. Not only are we seeing more credentials that speak to diversity, equity, and inclusion topics—in other words, training providers doing more training on these topics, human resource providers, adding more specializations and certifications to help create better signals about who’s a good guide, and who knows about these topics and can be a change agent in their companies—but we’re also seeing a greater reliance among enterprises to use credentials for this very reason, to actually not just say that their company is making changes and thinking about how to create a more inclusive and diverse work environment, but to prove they’re actually doing it. I think the fact that we’ve seen a 400 percent increase among employers who are issuing credentials to their own employees is very much related to this appreciation for removing the bias in how internal decisions get made.
Fuller: Another phenomenon that is really gaining some traction in large multinationals is this idea of internal talent marketplaces, where companies are scanning their personnel base to look for skills that might be in a part of the organization that isn’t making full use of them, or really trying to see if they can get to the next level of productivity and assign the right employee with the right skills to the most important task in the company, as opposed to the most important task on their direct supervisor’s list of things they need to complete to get a good performance evaluation, which is very seldom the same thing. You see companies... Gloat would be an example that have really seem to have made a lot of progress in this area. Are you seeing that as well? How is Credly unlocking a company’s ability to do that?
Finkelstein: Absolutely. We’re seeing employers who are using credentials to attract, to engage, to retain their employees by offering them training and learning opportunities. I think, very often, training and L&D at companies has been very top down. “Here’s what we want everyone to learn. Here’s a pathway we want everyone to complete.” The fact is, employees today are looking not just for a place to work, they’re looking for a place to learn. They’re not necessarily looking to learn just what you want them to learn. They’re looking to engage with upskilling that’s going to make them more marketable, that’s going to make them a guaranteed fit for the future workforce, not just for what’s needed today. I think companies are realizing that and saying, “This is a benefit that we can offer our incumbent workers. Issuing credentials is our way of giving you a form of currency.” Just as every couple of weeks you get a paycheck deposited into your bank account, you should get verified skills deposited into your skill account. One of my colleagues shared a statistic with me recently that suggested that 60 percent of employees found it was easier to get a job outside of their company than inside their company. What we’re finding among employers that are issuing credentials for recognition is they’re finding people actually stay longer, because they’re giving people the language and a trusted way of allowing them to navigate their professional development and trajectory within the company. If you look at companies like IBM, enrollments in their courses and programs went up 129 percent. The number of people who actually completed courses increased 226 percent. The number of learners who passed at the end of an exam increased almost 700 percent, compared to the six weeks that led up to them introducing digital credentials. It changes the way people think about engaging in their own learning.
Fuller: Certainly, the IBM story is a great one and an example both of how, when you make learning more accessible, people will take advantage of the opportunity, but also having senior management model the behavior you want the organization to behave by engaging in active learning themselves, and making the types of credentials they’re seeking and earning visible to others, and also very strong linked to the performance management system and opportunities to advancement. There are a lot of reasons to think that companies are going to get ever more efficient of this. Employees want to have opportunities to learn. They want to have opportunities to demonstrate their capacity to grow and earn consideration for advancement. If you give them clear communications about that, and the resources to do it, they will take you up on it. The biggest driver that we found in our research for low-wage workers, less than 200 percent of the poverty line in their jurisdiction leaving, is they just don’t see any opportunity to advance. An integral part of that is the employer hasn’t articulated what they need to do to advance, nor provided a pathway to attain the credentials that are needed to advance. Now, are you seeing that pattern in your work in terms of Credly being used as a vehicle for people navigating internal upskilling paths, even down at lower levels of the company?
Finkelstein: We’re finding organizations are able to issue credentials that are role based, which signify your ability to do a very specific job. Then they’re actually able to create job corridors or connections from that particular set of skills or that role to the next one. So it becomes a really great pathing tool. Companies are finding that that ability to represent what you’ve done on a job is a great benefit of employment, whether it’s through McDonald’s or Walmart or IBM embracing this idea that you may not have a forever relationship with each of your employees, but you can do a lot to cultivate their development while they are employed by you. That’s something that we see really universally with our enterprise customers.
Fuller: As you think about this, one of the things we’ve seen in our research is that companies do very sensible things based on the way they understand and measure success in terms of hiring and skills development. The problem is the way they measure and assess success is incomplete. It fails to keep track of certain data. It emphasizes success at the beginning of the employment process, not across the work experience, the productivity, the retention of workers. When you talk to executives, your customers, what direction are you trying to lead them in? How do you think they ought to be measuring success and applying that measure to the way they evaluate your offer?
Finkelstein: We don’t typically have a start and an end the way we do in training environments. And the skills that employers are most looking for today are applied skills. Can I trust that if I give you a project or give you a task, you’ll be able to do it, and meet or exceed expectations? What we’re seeing on the employment side is credentials that represent the skills that are developed during projects and project completions, organizations that value your ability to mentor or lead others and coming up to speed in those projects. We’re seeing the embedding of credential issuing into systems that record on-the-job types of activities. I think there’s a lot of innovation that we’re seeing, certainly, among our customer base about finding where the real signals are for skills, and it’s creating very interesting conversations about the fact that, indeed, skills are developed every day. They’re represented by the decisions we make. They’re represented by the kinds of values that a company sets about empowerment and what abilities individuals have to get stuff done. So whether it’s projects or products like we have here within Workforce Skills at Pearson, a new product called Aria—which helps individuals connect actual projects they’ve been charged with to find mentors to help them succeed and achieve their project successfully in advance in the workplace—or it’s the embedding of the issuing of credentials directly into the very software applications where people’s skills are being demonstrated. This is a field, I think, of rapid innovation. It’s why, I think, from Credly’s perspective, why our Switzerland status is so important, because we want to surface those skills in a consistent way, no matter where they happen.
Fuller: Jonathan Finkelstein, Founder and CEO of Credly, now of Pearson, real pleasure to talk to you, and to benefit from your insights about the whole credentialing movement.
Finkelstein: Joe, thanks for inviting me to be on the podcast. I’m a big fan and pleased to be part of the conversation that you’ve been fostering.
Fuller: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.