Micro-Credentialing: Not Your Grandfather’s Job Training Program

Andrew J. Kidd, Ph.D. Oct 09, 2019

The distance between a worker and that next, better-paying job just got shorter. Lieutenant Governor Jon Husted recently announced Ohio’s new TechCred program, which offers financial assistance to businesses that help their employees earn short-term degrees or job certificates, commonly referred to as micro-credentials. TechCred, along with the policies in House Bill 2—which would help individuals cover their costs of earning a micro-credential—will enable workers to quickly get the skills they need to be eligible for promotion and, as research shows, earn more money.

One of the key differences between these new micro-credential programs and government-run job-training programs of old is the partnership with employers and the speed in which workers can earn a credential or certification to show they have the skills employers need. Another difference is micro-credentials are earned and market-driven—unlike occupational licenses, which are simply government permission slips that allow people to perform a job they already have the skills to do. These micro-credentials tell a business that a worker has the necessary skills to perform the job without the additional, and unnecessary, cost of obtaining a government permission slip.

Another feature of TechCred is the ability it offers employers to submit an application for an unlisted credential to be added to the program. This flexibility ensures that the program can adjust and evolve as new skill requirements are needed for new technologies. However, there are improvements policymakers can make to ensure the program benefits employers and workers without wasting taxpayer dollars.

Policymakers should:

  1. Keep the application process straightforward and easy to access. Research shows that people are less likely to apply for aid or a program if the application process is difficult and lengthy.
  2. Establish a regular review of approved training providers. Businesses, like Amazon and Cisco, provide training and offer certification for skills that many tech jobs demand that didn’t exist 10 years ago. As more businesses and non-traditional schools offer these services, keeping the list of approved training providers up-to-date will ensure Ohioans have access to the most cutting-edge skill training.
  3. Expand these programs to Ohio’s high schools. Not every student sees a four-year college as their next step after graduating high school. And policymakers should focus on providing programs that ensure those students graduate ready to work. Furthermore, high school students can already count an industry-recognized credential towards their graduation requirements so these programs would help students on their way to graduation while ensuring they have in-demand skills.

Policymakers should not:

  1. Increase the tax burden on Ohioans to pay for these programs. Ohio already spends almost $3 billion a year on higher education and workforce training. This is more than enough money to fund these new programs. By using existing tax dollars, policymakers will avoid the harmful effects raising taxes has on innovation, and job and economic growth.
  2. Protect corporate special interests. Narrowly defining the list of training providers and limiting funding to only a few businesses is a sure sign of crony capitalism. When possible, multiple approved training providers should be allowed to offer micro-credentials.
  3. Create a special interest taxpayer funded give away. While allowing flexibility for the program to evolve as needed is a smart approach, policymakers should pay close attention and ensure the program does not become an ineffective taxpayer cash give away. The current cap on the amount a company can receive to offset the cost of training employees avoids over-use of the program by one single business. However, since the approval process is in its infancy, it should be regularly reviewed so all businesses can benefit from the program.
  4. Stop here. Innovative approaches are needed to solve Ohio’s workforce challenges. The future of work and how workers are trained for new jobs will continue to transform, and programs like TechCred are only the start.

Gone are the days when the only option for high-paying jobs was earning a college degree. With these micro-credentialing programs, Ohio is now working with businesses to train workers for jobs that are available and where qualified workers are in high demand. This shift from the old job training model, which failed to provide workers with the skills they needed to find a job, can make Ohio a model for the rest of the country.

TechCred and the policies in House Bill 2 aren’t your grandfather’s job training programs. They are a new and innovative approach that will help address the challenges of training Ohioans for jobs in a tech-based economy.

Andrew J. Kidd, Ph.D., is an economist with The Buckeye Institute’s Economic Research Center.