Experts say nondegree credentials could help address Tennessee’s workforce shortage

Stock image of a student and teacher (Photo by SCORE)

Business and education leaders say nondegree credentials could be one solution to Tennessee’s workforce shortage, but the state needs to learn more about which ones are in demand.

That’s one finding of a Tennessee State Collaborative on Reforming Education (SCORE) report released this month and a panel discussion the organization held last week on the growth and impact of nondegree credentials in Tennessee.  Nondegree credentials focus on specific competencies and include diplomas, certificates, and industry credentials other than a traditional postsecondary degree. Some examples include TCAT (Tennessee Colleges of Applied Technology) certificates or degrees and certifications earned through on-the-job training, apprenticeships, and other programs such as software certifications.

It is estimated that by 2031, 63 percent of jobs in Tennessee will require some form of postsecondary education. Tennessee is already facing a workforce shortage, with 61 percent of employers saying there aren’t enough qualified local workers to meet employment needs.

“When you ask employers directly, why that is, the majority report it is the insufficient talent pipeline without the training and skills that are needed,” says SCORE Senior Vice President of Strategy, Mary Cypress Metz. “Nondegree credentials, because of how nimble and diverse they are, have the opportunity to really help us meet those needs.”

Metz says research shows more employers are shifting toward skills-based hiring, valuing specific skills over traditional degrees. Because of this, the popularity of nondegree credentials has skyrocketed over the past decade and they are projected to become the most awarded credentials from higher education institutions within the next decade.

“Tennesseans want an opportunity to kind of do things in a different way that works for them,” Tennessee Department of Labor and Workforce Development Commissioner Deniece Thomas told panelists. “So, I think for the economic viability and sustainability for families and individuals, we have to factor in this conversation.”

But exactly which nondegree credentials have the most potential to lead students into high-demand, high-paying jobs is unclear. Nondegree credential holders in Tennessee show significant earnings variation, with 51 percent reporting earning more than $50 thousand dollars per year, but 27 percent earning under $30 thousand dollars, which is below the average living wage for a single Tennessean. Experts say this highlights the need for better insights into credential effectiveness, which can guide resource development, prioritize employer needs, and enhance student career success.

“Really you end up in this situation where reliable data on outcomes is just not available today. So, this is both a big problem, but it is also an enormous opportunity for Tennessee to lead,” said Dr. Stephen Moret, President & CEO of the Strada Education Foundation.

SCORE experts say Tennessee can take the lead on that front by tracking nondegree credentials both inside and outside of higher education institutions, including program completion, credential attainment, job placement, and earnings associated with any nondegree credential. Policy makers and educators can then use that information to drive education programs in way that meets workforce needs and leads to economic independence for Tennesseans.

Commissioner Thomas said Tennessee is in the process of beginning to create an inventory of high value nondegree credentials but says there is more work to be done. She pointed out that some credentials might be in high demand in one area of the state, but not in another. She went on to say more collaboration is needed with private sector employers to try to better align their needs and the needs of the surrounding communities. This will help workers make informed decisions about which nondegree credentials could have the biggest impact on their futures.

“So, when we really start thinking about nondegree credentials, I think our strategy has to shift to really paying attention to what’s working, but working in different ways,” said Thomas. “Digging down but having it vast enough that it can speak to those who are not working, those who are underemployed and looking to upskill, it has to speak to all Tennesseans on that path.”