EMPLOYER PERSPECTIVES

ON COMPETENCY-BASED
EDUCATION

Chip Franklin and Robert Lytle

Parthenon-EY

April 2015

AEI Series on Competency-Based Higher Education

C E N T E R O N H I G H E R E D U C AT I O N R E F O R M
AMERICAN ENTERPRISE INSTITUTE
 Foreword

R ising tuition prices and finite public budgets have

spawned a lively policy debate about innovation
in higher education. In particular, competency-based
degrees? What does the regulatory environment look
like for competency-based providers? Do employers
value the credential?
models have garnered a lot of attention from policy- Despite increasing attention to the potential of
makers, reformers, and funders. Unlike online college competency-based education, researchers and policy-
courses, which often leave the basic semesterlong struc- makers still have few answers to these questions. To
ture intact, competency-based models award credit provide some early insight, AEI’s Center on Higher
based on student learning, not time spent in class. As Education Reform has commissioned a series of papers
soon as a student can prove mastery of a particular set that examine various aspects of competency-based
of competencies, he or she is free to move on to the next education. In the second paper of the series, Chip
set. A number of institutions are currently engaged in Franklin, vice president of Parthenon-EY’s Boston
these efforts, including Western Governors University, office, and Robert Lytle, cohead of Parthenon-EY’s
Excelsior College, Northern Arizona University, and Education Practice, examine employers’ perspectives
the University of Wisconsin’s UW Flexible Option. on competency-based education, using findings from
The competency-based model presents opportuni- a first-of-its-kind survey of hiring managers at differ-
ties for improvement on two dimensions: first, it allows ent firms across the country.
students to move at their own pace, perhaps shorten- As always, our goal is not to come up with a verdict
ing the time to complete a degree, and second, com- as to whether this innovation is good or bad, but to
petencies can provide a clearer signal of what graduates provide a look under the hood that is valuable to poli-
know and are able to do. Yet for all the enthusiasm that cymakers and other observers. I hope you find it useful,
surrounds competency-based approaches, a number and stay tuned for more.
of fundamental questions remain: What kinds of stu-
dents are likely to choose competency-based programs? —Andrew P. Kelly
How do students in these programs fare in terms of Resident Scholar in Education Policy Studies
persistence, completion, and labor-market outcomes? Director, Center on Higher Education Reform
Are these programs more affordable than traditional American Enterprise Institute

i
 Executive Summary

E xcitement is growing about the potential for

­competency-based education (CBE) to become a
transformative force in higher education. Yet while much
• Employers’ lack of awareness seems to correlate
with a lack of understanding of the potential ben-
efits to employers of hiring students educated
of the attention paid to ever-expanding CBE efforts through CBE programs.
focuses on student and institutional priorities, little
effort has been made to understand the perspectives and • Employers remain generally unable to articulate
needs of the employers who must hire CBE credential- discrete needs as competencies; they rely instead
bearing graduates. For CBE to achieve its full poten- on hiring generalizations grounded in the tradi-
tial as a disruptive force in higher education, employ- tional idea of “fit” that lack the specificity needed
ers must recognize the validity of specific competencies, to create an effective competency map.
assigning labor-market value to the discrete skill bundles
required for a targeted job opportunity. Only then can • Some employers believe that this generalized
the value proposition of competency-based education approach helps them hire the right people, but
be complete. nearly two-thirds think that they could be doing
Our research into employer perspectives on CBE, better at identifying students with the specific
using a first-of-its-kind survey of nearly 500 hiring skill set required for the job.
managers at different companies across the country,
identifies several inherent obstacles to the expansion Given this lack of awareness and understanding in
and acceptance of broader CBE efforts across the labor the marketplace, an opportunity exists for the field
market. Some of our key findings include: to engage employers more proactively as partners in
CBE programs, something most hiring organizations
• Overall employer awareness of CBE is low, despite strongly desire. Employer openness to further engage-
expanding CBE efforts and increasing efforts to ment presents a real opportunity for CBE providers
engage employers. to emphasize the potential impact of CBE programs
not only on students, but also on the employers eager
• Hiring managers already aware of CBE had a to hire them.
favorable view of the model and its graduates, but
these individuals constituted a small minority.

ii
 Employer Perspectives on Competency-Based Education

Chip Franklin and Robert Lytle

This paper is the second in a series examining competency-based higher education from a number of perspectives.

“There appear to be a lot of individuals in the job In this paper, we work to fill that void, shedding
pool, but not enough with the skills we need.” some light on how employers perceive CBE, what they
know about it, and what they see as the opportunities
—Hiring Manager for collaboration with CBE providers. To do so, we use
a first-of-its-kind survey of nearly 500 hiring managers

P olicymakers and higher education reform advocates

have become increasingly interested in competency-
based education (CBE) as a potential solution to many
at different companies across the United States. Ana-
lyzing data from these respondents, we found low lev-
els of awareness among hiring managers regarding the
of the key challenges in higher education today: the CBE approach and its unique value proposition. Not
escalating cost of a college degree, low completion rates, surprisingly, this lack of awareness seems to correlate
and graduates’ apparent lack of career-ready skills. The with a lack of understanding of the potential benefits
CBE approach is intuitively appealing; rather than forc- to employers of hiring students educated through CBE
ing students to sit through 16-week semesters to earn programs. Hiring managers already aware of CBE had
credit, CBE programs award credit once students can a favorable view of the model and its graduates, but
prove they have mastered a particular competency or these individuals constituted a small minority. While
set of competencies. In theory, this allows students to CBE could fundamentally change higher education,
move at their own pace and provides a clear demonstra- this low awareness among employers may create signif-
tion of what they have actually learned. Indeed, much icant barriers to broader adoption and effective scaling
of the conversation to date around ­ever-expanding CBE of CBE programs.
efforts has focused more on the benefits for students and Employers rooted in traditional hiring approaches
institutions and less on the perceptions of employers. tend to focus on the associate or bachelor’s degree as
For CBE to achieve its full potential as a disrup- a marker of general skills. We find that these employ-
tive force in higher education, employers must recog- ers express significant misgivings that targeted skill-
nize the validity of both the specific competencies and building approaches may come at the expense of the
the overarching credentials that CBE degree programs more general skills they value. Building employer confi-
produce. This is true across the range of attempts to dence in the ability of CBE credential holders to deliver
unbundle the traditional degree, including CBE and a on both specific technical skills and general skills such
host of other alternative credentials (for example, badg- as communication and problem solving remains a cru-
ing, nanodegrees, and employer-sponsored online cre- cial gap in the ongoing evolution of CBE.
dentials): employer acceptance is the key to completing Given this lack of awareness and understanding in
the student value proposition. Yet, while enthusiasm the marketplace, we believe that an opportunity exists
around CBE has grown in institutions, states, and for the field to engage employers more proactively as
Washington, DC, we know less about how employers partners in CBE programs. Specifically, employers
view this new approach to awarding credit. working more directly with CBE providers can offer

1
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

the labor-market inputs needed to design, define, and Data Sources

assess competencies effectively, providing the links to
career opportunities that are crucial to delivering a This report is based on work by the consulting firm
positive return on investment to students complet- Parthenon-EY, which deployed a survey of hiring deci-
ing CBE programs. Although many CBE programs sion makers across industries and types of companies.1
pursue such objectives, the general lack of aware- Survey respondents are either sole hiring decision mak-
ness among hiring managers in our survey highlights ers or members of a team of hiring decision makers for
the opportunity to broaden employer-focused out- their respective organizations. To reach these nearly 500
reach efforts. respondents, we worked with Research Now, a market
Following an overview of our survey and data research firm, to develop a representative sample of hir-
collection, this report is divided into two sections. ing decision makers. We reached out to a wide range of
The first section provides an overview of employers’ respondents (figure 1), with 529 hiring managers pass-
knowledge and attitudes toward CBE. We find that ing through a set of screening questions, 50 of whom
employers are largely unfamiliar with the terminology were then discarded for accuracy reasons.2 This left us
and programmatic offerings associated with CBE. If with a total of 479 hiring managers at firms that actively
anything, employers are aware of only the most prev- recruit employees from postsecondary programs.
alent CBE student-focused marketing messages cen- Our sample cuts across a broad swath of industries
tered on affordability and time to degree. However, and firm sizes, offering a comprehensive perspective on
once explained, the underlying concepts and poten- the needs of employers nationwide. Geographically, our
tial benefits of CBE resonate clearly, signaling a path respondents live in 43 states and are slightly more likely
to future awareness and acceptance if CBE programs (5 percent) to report living in California than national
can broaden marketing messages to include import- averages, and slightly less likely (3 percent) to report liv-
ant employer stakeholders. ing in Texas.3 They reported a plethora of titles, includ-
The second section examines hiring practices across ing “hiring manager” (30 percent of respondents) and
a diverse array of industries and identifies opportunities “human resources manager” (13 percent), as well as a
to improve the human capital pipeline by leveraging wide array of titles reflecting the diversity of employers in
CBE. We begin by arguing that employers traditionally the sample: “general manager,” “executive VP,” “school
approach hiring decisions from a generalist perspective, director,” “pastor,” and “analyst.” Nearly half the respon-
focusing on an applicant’s general skill set and over- dents have direct experience hiring entry-level employ-
all fit within a company rather than the targeted skills ees, with a smaller segment focusing on hiring senior
required for a specific job opportunity. Although some management (48 percent and 31 percent, respectively).
employers believe that this generalized approach helps
them hire the right people, nearly two-thirds think that
they could be doing better at identifying students with Employer Understanding of
the skill set required for the specific job. Competency-Based Education
The second section concludes by arguing that CBE
programs can continue to increase their relevance Our survey of hiring managers asked some basic ques-
by partnering with employers (something most hir- tions to measure their familiarity with and percep-
ing organizations strongly desire) to articulate more tions of CBE programs. The results reveal two main
clearly the targeted competencies needed for spe- themes. First, employers are rarely familiar with the
cific jobs. Collaboration between academia and the model, despite the increased prevalence of marketing
labor market has the potential to educate employers from a few larger-scale programs, particularly Western
more effectively about the potential benefits of CBE Governors University and Southern New Hampshire
­programs—in particular, the cultivation of applicants University. Second, despite this lack of familiarity, the
with both general and targeted skills needed for suc- opportunity for CBE programs is clear: once famil-
cess on the job. iar with the model, employers are highly enthusiastic

2
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 1
Size, Scope, and I ndustry of Respondents’ Employers

What industry is your firm in?

Manufacturing 10%
n=479 n=479
100% Professional services 9%
IT and technology 9%
Other 8%
Multi- Healthcare/Pharmaceuticals/Biotechnology 8%
More than National Nonprofit 6%
80 1,000 Education 6%
Retailing 5%
Financial services 4%
Automotive 4%
60 Restaurant 3%
National
301-1,000 Transportation, travel, and tourism 3%
Entertainment, media, and publishing 3%
Consumer goods 3%
101-300 Construction 3%
40 Real estate 2%
Regional Insurance 2%
51-100
Telecommunications 2%
Agriculture and agribusiness 2%
11-50 Aerospace and defense 2%
20
Utilities 1%
Local Oil and gas/Mining 1%
Under 10 Leisure 1%
Logistics and distribution 1%
0 Government/Public sector 1%
How many How would you Energy and natural resources 1%
employees does describe the scope Chemicals 1%
your firm employ? of your company?
2% 4% 6% 8% 10%

Source: Authors’ calculations using Parthenon-EY survey of hiring managers.

about both the model itself and its potential for yield- Employer Awareness: Competency-Based What? As
ing prospective hires. we have described, our survey unearthed both oppor-
This section explores the current perception of tunities and challenges for CBE. On the one hand,
CBE among employers actively hiring from postsec- employer enthusiasm for CBE programming positively
ondary programs. The first part uses our survey results correlates with awareness. That is, as employers learn
to document the extent of employer familiarity with more about CBE and its potential benefits to both stu-
CBE as well as perspectives on the validity of the CBE dents and employers, they become more interested in
approach. The second half of the section explores why hiring CBE graduates. On the other hand, no matter
these patterns might be evident, focusing on the typi- the industry or job type, the vast majority of employers
cal marketing messages employers associate with CBE remain unaware of CBE.
programs. If the survey results are any indication, exist- Figure 2 highlights employers’ lack of familiarity
ing programs have not yet reached a wide range of with the concept of competency-based education.
employers (a deficit we explore in more detail in the Among the 479 respondents, only 45 reported hav-
second section). As a result, student-focused marketing ing a “strong understanding of the concept.” More
­messages—focused on affordability and flexibility— than three times as many respondents reported that
seem to be a primary input informing employer per- they had never heard of CBE. Meanwhile, 55 per-
spectives on CBE. cent of respondents reported some familiarity with

3
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 2 Overall awareness of CBE seems to be one of the

Hiring Managers’ Familiarity with largest drivers of interest in hiring CBE graduates and
­Competency-Based Education willingness to consider CBE programs as a valid source
of prospective hires. Figure 4 shows that the small sam-
How familiar were you with the concept ple of employers with high CBE awareness (45 respon-
of competency-based education dents) was significantly more likely to be enthusiastic
before taking this survey?
about this type of program, in terms of both their belief
n=479 in the validity of CBE as a pedagogical approach and
100%
I had a strong understanding of the concept their interest in hiring CBE graduates. Eighty-nine per-
and how it works
cent of those surveyed who were highly aware of CBE
80 were likely to claim it a valid source of prospective hires,
I had some general idea of the concept and 78 percent were very interested in potentially hir-
but do not fully understand it
ing CBE graduates, compared to 71 percent and 54
60 percent, respectively, of those who were not familiar
with the program.
I had heard the name but do not know what it is Underlying these levels of overall interest in CBE
40
as a valid source of human capital is basic agreement

20
Figure 3
I had never heard of it
Interest inHiring CBE Graduates after
Hearing a Description
0
Responses
Based on this description of competency-
Source: Authors’ calculations using Parthenon-EY survey of hiring based education, how interested would you
managers. be in hiring students from a CBE program?

n=479
100%
7 - Extremely
the concept but lacked a clear understanding. interested
This lack of familiarity with CBE remains rela-
tively constant across industries, with few differences 80 6
across occupations. But despite low awareness of CBE
across the employer landscape, the underlying benefits
of a CBE approach clearly resonate with hiring man- 60
agers. When given a description of competency-based 5

education, roughly one-quarter of survey respondents

reported being very interested, and nearly 60 percent
40
expressed interest in hiring CBE graduates.
Figure 3 displays these results. (Interest was rated 4
on a seven-point scale, with ratings of seven being
20
“extremely” interested in hiring CBE graduates.) At
the same time, only 5 percent said that they were “not 3
at all interested” (rating of one), and only 15 percent 2
1 - Not at all interested
reported a score under four. This healthy optimism sur- 0
Interest in CBE
passes awareness levels and suggests that many employ-
ers are potentially enthusiastic about CBE but simply Source: Authors’ calculations using Parthenon-EY survey of hiring
need more information to develop preferences. managers.

4
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 4
Interest in Hiring CBE Graduates after Hearing a Description

Do you believe that CBE programs are valid as a source of prospective hires today?
Based on this description of competency-based education, how interested would you be in
hiring students from a CBE program?

100%

89%

80 77% 78%
71%

60%
60
54%

40

20

0
Low CBE Awareness Moderate CBE Awareness High CBE Awareness

Note: The second question was scored on a scale of 1–7, with 7 meaning “extremely interested” and 1 meaning “not at all interested.” The
validity (green) bar reflects “yes” responses, and the interest (blue) bar reflects respondents who answered 5, 6, or 7. Interest tends to be lower
than validity on this question because respondents likely felt that CBE may be valid, but not for their program. Interestingly, this gap closed as
awareness increased. N=479.
Source: Authors’ calculations using Parthenon-EY survey of hiring managers.

with three specific elements of the value proposition

that CBE programs offer to employers. Figure 5 shows On the one hand, employer enthusiasm
that nearly half of all survey respondents placed signif-
icant value on the ability to evaluate candidates based for CBE programming is positively
on specific competencies. A similar proportion valued correlated with awareness. . . . On the
the core CBE idea that students should earn credits and
credentials through demonstrated mastery as opposed other, no matter the industry or job type,
to the number of credit hours they sit through. And the vast majority of employers remain
a majority saw value in the opportunity for deeper
engagement with employers about the specific compe- unaware of CBE.
tencies included in a course of study.
Although we discuss the importance of these spe- results largely align with the qualitative responses
cific attributes in more detail in the second section, from employers. For instance, one respondent
their overall resonance among employers under- explained, “I find myself more and more intrigued
scores the opportunity for institutions to engage a by those that prove they’re capable of doing the job
broad range of employers in the development and rather than those who simply brandish an educa-
rollout of CBE programs. Additionally, the survey tion which may or may not be applicable to today’s

5
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 5
Value Hiring Managers Place on Three Dimensions of CBE Programs

Please tell us how valuable the following attributes of a CBE program would be to you.

n=479 n=479 n=479

100%

7 7 7

80

6 6 6
60

40 5 5 5

20 4
4 4

32 3 3
2 2
1 1
0 1

Can evaluate on Demonstrated mastery vs. Institutions open to feedback

competencies mastered attending classes from employers

Note: Question was scored on a scale of 1–7, with 7 meaning “extremely valuable” and 1 meaning “not at all valuable.”
Source: Authors’ calculations using Parthenon-EY survey of hiring managers.

It is worth noting that clear differences emerged with

Employers recognize that CBE—if respect to the different positions and roles that hiring
managers are trying to fill. Figure 6 shows that as posi-
applied correctly—could provide an tions become more senior, recruiters became less likely
informative indicator for identifying to hire on the basis of demonstrated competencies.
Roughly half of recruiters would be very likely to hire
high-potential job candidates. a temporary worker, administrative assistant, or entry-
level worker on the basis of demonstrated competencies
over a general degree. That proportion falls much lower
industry.” Although, in many cases, prior work expe- (to just over one-quarter) when thinking about how to
rience (if available) or generalized skill sets (proven hire managers or senior management. Although many
through traditional interviewing) are used as prox- graduates of CBE programs will begin their careers in
ies for job-related competency, employers recognize entry-level jobs, somewhat mitigating concerns raised
that CBE—if applied correctly—could provide an by these responses, the continued importance recruit-
informative indicator for identifying high-potential ers place on traditional degree-based credentials mer-
job candidates. As another hiring manager explained, its mention. This is the status quo that CBE programs
CBE could “ensure that the curriculum is relevant to will continue to combat in establishing new credentials
meet the needs of our institution.” with labor-market value.

6
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 6
Hiring Preferences by Position

How likely would you be to hire for the following roles on the basis of
demonstrated competencies rather than on the basis of a general degree?

n=231 n=313 n=241 n=375 n=280 n=147

100%
7 7
7
7 7
7
80 6
6
6
6 6

60 6 5 5

40 5 5
5 4 4

4
4 3 3
20 4
4
2
3
3 2
2 3
3 2 1
2
1 1
2
1
1
0 1

Temp. Entry Level Admin./Secretary Exp. Workers Managers Sr. Mgmt.

Note: Question was scored on a scale of 1–7, with 7 meaning “extremely likely” and 1 meaning “not at all likely.” Variations in n are due to respon-
dent experience hiring for each role; respondents were asked their likelihood of hiring only if they had experience hiring for that role.
Source: Authors’ calculations using Parthenon-EY survey of hiring managers.

These patterns may simply be due to the fact that

recruiters of senior managers are less familiar with CBE. As CBE programs have worked to
After all, levels of familiarity are low across the board.
And, outside of Capella University’s competency- attract students, marketing efforts
based Master’s in Business Administration program, it have so far been student-centric as
is not clear how many CBE providers are focused on
management education.4 opposed to employer-centric.
But recruiters focused on management positions
may also have preconceived notions about the fit
between CBE’s focus on instilling specific competencies specific job can leave gaps in their knowledge base. A
and the demands on higher-level executives. Indeed, broader education allows you to apply your learning in
recruiters of senior management are more likely to cite many ways.”
that they are looking for “general skills” than recruiters Implicit biases may also exist in employers’ percep-
of lower-level positions. As we will discuss further in tions of the quality of graduates of CBE programs.
the next section, there is a misperception among hiring For instance, these programs have traditionally served
managers that possessing a discrete skill set is somehow nontraditional students with some college experience
in direct tension with possessing general skills. As one who are balancing school with work and family com-
survey respondent explained, “Training someone for a mitments. CBE programs have also traditionally been

7
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

“open access” in their admission standards. In the these themes emerges. Programs that offer accelerated
absence of more information, these facts could trigger learning tend to advertise themselves as “faster.” Pro-
implicit biases in the minds of hiring managers, making grams with lower costs sell themselves as a “cheaper”
them less eager to hire these types of students to man- alternative to a traditional degree program. And those
agement positions. As one skeptical survey respondent that have a different type of pedagogical approach tend
phrased it, “I don’t know much about CBE, but from to be marketed as “more flexible.” Faster, cheaper, and
what I’ve heard it sounds like a lazy method of teaching more flexible is a powerful message for students who
for lazy students.” are bombarded with articles and reports about the ris-
ing cost of college. This message is likely even more
Clarifying the Benefits of CBE to Employers: powerful for nontraditional students who are working
Beyond “Faster, Cheaper, More Flexible.” Clearly, to juggle school, job, and family responsibilities.
some hiring managers could use information to help
clarify the potential benefits of CBE to their employers.
In theory, for CBE to be relevant to future employers, The hiring managers we surveyed were
they have to either believe that the programs offered by not widely aware of CBE program
a given institution are aligned with their needs or have
some input in designing the curriculum. With respect efforts to establish and develop
to the former, we believe the perception will in large
connections to the labor market.
part be derived from the public marketing of these pro-
grams. (We discuss the latter in the next section.)
However, it is our impression that as CBE programs These messages are not just clever advertising. For the
have worked to attract students, marketing efforts have most part, CBE programs and advocates have rightly
so far been student-centric as opposed to employer- focused on providing (and marketing) high-quality
centric. This pattern may help explain existing low lev- offerings that enable students to earn their degree more
els of awareness among hiring managers. quickly, more affordably, and at their own pace. But
To get a sense of the predominant marketing mes- while this programmatic messaging appeals to students,
sages, we evaluated the publicly available market- it potentially turns off employers focused on sourcing
ing materials from leading CBE programs. Naturally, high-quality applicants above all else. Although some
student-centric marketing approaches focus on the CBE programs do make outreach to employers a pri-
unique value proposition CBE programs offer to stu- ority and even highlight their employer partners, the
dents. Though CBE programs vary in their design, the hiring managers we surveyed were not widely aware of
diverse array of offerings share three broad character- CBE program efforts to establish and develop connec-
istics: they allow for accelerated learning, boast a low tions to the labor market.
overall cost because learning is accelerated, and employ In the absence of clearer explication of the model
an innovative approach to curriculum and pedagogy and the potential benefits to a broader array of employ-
that is typically more flexible than what is offered at a ers, skeptics may see some of the advantages of CBE
traditional college. Ideally, that curriculum is also more for students—time to degree, affordability, and flexibil-
closely aligned to specific labor-market needs than what ity—as liabilities. It is easy to imagine a critic wonder-
traditional degree programs offer. These core elements ing whether “faster” implies fewer classes or if “flexible”
are common to most existing CBE programs, and most is just a way to more easily give out degrees. Institu-
important to employers, the marketing messages that tions, these skeptics might argue, must surely be cut-
accompany them tend to highlight these elements (fig- ting corners somewhere, raising questions as to whether
ures 7 and 8). an employer would want to hire someone from that
CBE programs employ a variety of different mes- institution. Institutional profit motive even comes into
saging strategies targeted at different sets of stakehold- play, with one employer we surveyed reporting, “In my
ers, yet a coherent student-focused message based on mind, CBE is associated with a college I am aware of

8
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 7
Competency-Based Education’s Value Proposition
What Is a Competency-Based Education Value Proposition?
Common value proposition themes and program elements are
beginning to emerge.

Accelerated Low Overall Curriculum and

Learning Cost Pedagogy

Self-Pacing

Subscription-Based Pricing

Direct Assessment

Credit for Prior Learning

Tutor/Mentor vs. Instructor

Project-Based

Employer Partnership

“Get your degree in “$5K degree; “Uniquely applicable in

under X months” extremely affordable” the workplace”

Source: Authors’ representation based on a Parthenon-EY scan of CBE program marketing messages.

Figure 8
Examples of Marketing Messages Used by CBE Programs

What Is a Competency-Based Education Value Proposition?

Though marketing messages carry some common themes,
they cover a remarkable range of motivations.

Earn your Flexibly scheduled to

degree. On fit in busy lives, and
extraordinarily affordable
your terms.

Concretely demonstrate their With half the

knowledge, skills and abilities, cost of other
without requiring them to sit through
a traditional 8- or 12-week course online schools

Partners with
30% faster employers
time to degree nationwide

Source: Authors’ representation based on a Parthenon-EY scan of CBE program marketing messages.

9
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

that exists for pursuing government loans for profit.” Figure 9

In other words, in the absence of clear and compel- Are Institutions Preparing
ling outreach targeted at employers that explains the Students for the Workforce?
value proposition of hiring CBE graduates, a vicious
cycle might ensue: employers are wary of hiring CBE To what extent do you agree or disagree
with the following statement?
graduates based on a perceived lack of quality, leaving
“Educational institutions are preparing
CBE programs unable to attract high-quality students, students for the work they will be doing
furthering their perception of a lack of quality. upon graduation.”
And yet, a clear opportunity exists to clarify the value
n=479
proposition. It is easy to conceive of marketing mes- 100%
7 - Completely agree
sages that resonate with employers: “CBE graduates are
6
able to take proof of tangible skills to employers” or
“CBE programs worked to develop a curriculum that 80
teaches students what employers need.” Obviously, this 5
work goes beyond merely cultivating a marketing mes-
sage. As one respondent put it, CBE programs could 60
work with businesses to “help mold and adjust the cur-
riculum to match more closely the real time changes 4
in the business environment” or incorporate “employer 40

input on coursework that would lead to professionals

with the skills to hit the ground running.” A curric- 3
ulum developed with the input of employers “could 20
deliver graduates that are better prepared for the world 2
of work.”
1 - Completely disagree
The fact that many employers are unfamiliar with 0
Interest in CBE
a CBE curriculum is a tremendous opportunity for
competency-based providers to refocus some of their Note: Question was scored on a scale of 1–7, with 7 meaning “com-
pletely agree” and 1 meaning “completely disagreel.”
messaging on the needs of employers in a way that still Source: Author’s calculations using Parthenon-EY survey of hiring
appeals to students. Improving messaging to employers managers.

(while continuing to appeal to students) is essential to

the long-term success and survival of CBE. Employers the quality of incoming employees. To maximize the
are learning more about CBE programs, but opportu- value of CBE programming for students, CBE pro-
nity exists to directly engage them with the structure grams must better understand how employers currently
and content of the curriculum. That means going approach hiring and the strengths and weaknesses of
beyond “faster, cheaper, more flexible.” a competency-based approach to education that an
employer perceives.

Engaging Employers Employer Hiring Needs and Perspectives: Oppor-

tunities and Challenges for CBE. According to our
For schools to market CBE programs effectively to survey respondents, when making hiring decisions
employers, they must first understand how employers today, firms use two broad types of criteria: fit and
hire today and how this dynamic could evolve in part- demonstrated skill sets. Fit is largely determined through
nership with CBE programs. Throughout our survey, character references, cover letters, prior interests, and
employers expressed an eagerness to work with insti- interviews. Demonstrated skill sets, on the other hand,
tutions offering competency-based programs to artic- refer to a more complicated array of attributes that are
ulate and develop standards that will help improve harder to discern through traditional hiring processes.

10
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 10
Top Challenges Employers Face in the Hiring Process

What are the key challenges you face with hiring qualified candidates?

n=479
100% None of the above 2%
Writing appropriate job descriptions 7%
Marketing job opening in appropriate places 8%
80 Managing time to complete the process 10%

Selecting candidates for interviews based on résumés 11%

60
Receiving enough applications 12%

Competitively compensating qualified candidates 13%

40

Properly judging candidates’ qualifications 13%

20

Finding enough qualified applicants in the pool 24%

0
Key Challenges

Source: Author’s calculations using Parthenon-EY survey of hiring managers

To determine an individual’s skill sets, employers with the rise of applicants who do not fit a traditional
consider prior work experience, grades, major, and mold, these questions become even more difficult.
prestige of school—all traditional inputs on a résumé. Today, employers are open to evaluating sample
But résumés are noisy and highly imperfect signals of work or portfolios, although (as we will show) these
competence. The dearth of reliable indicators of skill inputs are still typically less important than traditional
has forced employers more squarely into the generalist indicators—especially the general fit criteria. As one
“fit” approach, where they identify and evaluate softer hiring manger reported on the open-ended section of
skills like communication and hire prospective employ- our survey:
ees based more on subjective assessments of their gen-
eral aptitude than on the specific skills they offer. This Having worked with and hired many individu-
gap between the more general, traditional approach to als, I find that experience and aptitude are far more
recruiting and the specific skill needs of employers is at important than which school one has attended or
least a partial driver of the “skills gap” that employers which degree one has obtained. I find myself more
regularly report. As figure 9 shows, the hiring managers and more intrigued by those that prove they’re capa-
we surveyed described a similar skills gap, which rep- ble of doing the job rather than those who simply
resents an opportunity for CBE programs. brandish an education which may or may not be
A college diploma has always been a blunt indicator applicable to today’s industry.
of skills; unless recruiters have a deep understanding of
a specific school and a student’s program transcripts, it Increasingly, employers see potential value in bet-
is very difficult to develop clear maps of skill sets by type ter understanding the alignment of academics with the
of degree, even with a close look at coursework. And skills they seek in applicants—building out exactly the

11
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

kind of competency map that lies at the core of CBE Figure 12

programs. As such, CBE programs are uniquely posi- Have Organizations Defined Competencies
tioned to convey an individual’s spectrum of skills more Required to Be Successful in Positions?
accurately than traditional degree programs.
This increasing openness to using new metrics in
the hiring process is in some ways a response to a labor Has your organization defined the competencies
market in which it is increasingly difficult for individ- required to be successful in positions you hire for?
uals to differentiate themselves and demonstrate their
n=479
skills. As figure 10 illustrates, employers today face a 100%
diverse array of challenges in the hiring process; no one
issue garnered more than a quarter of all responses. Formalized List 24%
The most commonly cited issue, with 24 percent of 80
respondents, is “finding enough qualified applicants,”
followed closely by “properly judging candidates’ qual-
ifications.” Again, both of these issues could be readily 60 Informal list 33%
addressed by CBE’s focus on the demonstrated mastery
of specific skills.
40
Figure 11 Unwritten list 18%

Employers’ Ability to Evaluate Candidates’

20
Level of Competence for Job Skills General sense 17%

To what extent do you agree or disagree Competency not defined 8%

with the following statement? 0
“I am able to evaluate candidates’ level Level of Defined Competency Needs
of competence for the job skills I need
prior to making a hiring decision.” Source: Author’s calculations using Parthenon-EY survey of hiring
managers.
n=479
100%
7 - Completely agree
The traditional approaches to recruiting pres-
ent opportunities for CBE programs to demonstrate
80 6 improved recruiting efficacy, giving employers the tools
to better match student skills to the explicit require-
ments of an open position. Although employers largely
60
feel comfortable with their ability to differentiate among
5 candidates based on fit, they often admit to difficulties
in differentiating based on demonstrated skill sets. As
40
figure 11 shows, only one-third of employers agree that
they are “able to evaluate candidates’ level of compe-
4
tence for the job skills I need prior to making a hiring
20
decision,” rating a six or seven on a seven-point scale.
1 - Completely
3 disagree
Ironically, although employers complain that they
2 cannot find applicants with the skills they need, only
0
Respondents a fraction report that they formally define those skills
Note: Question was scored on a scale of 1–7, with 7 meaning “com- before hiring. Figure 12 shows that employers rarely
pletely agree” and 1 meaning “completely disagree.” define the skill set required to excel in a certain posi-
Source: Author’s calculations using Parthenon-EY survey of hiring
managers. tion; roughly 80 percent of respondents reported that

12
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 13
Employer Perspectives on the I mportance of Competency Areas

80%
74%
71%
67% 67% 66%
63%
60 58%

48%
42%
40% 40%
40

20
16%

0
Problem Team- Personal Commun- Technical Diversity Ethics Analysis Data Technology Math Arts
Solving work Develop- ication Analysis
ment

Note: Question was scored on a scale of 1–7, with 7 meaning “extremely important” and 1 meaning “not at all important.” Figure displays per-
centage reporting a 6 or 7 on the importance scale. N=479.
Source: Author’s calculations using Parthenon-EY survey of hiring managers.

their organization does not formally articulate or define on the specific, targeted skills required for a given job.
the competencies required for a given role. If employers Oddly, employers do believe that postsecondary
do not know or cannot define the specific skills pro- institutions should be developing (and articulating)
spective employees need, it is difficult or impossible for specific, concrete skill sets in evaluating candidates,
a student to demonstrate ability in that area. Further- despite their inability to do so themselves. Figure 14
more, without a defined list, it is practically impossi- shows that about half of respondents thought that the
ble for a CBE program to align program competencies “core purpose” of education institutions should be to
with the targeted skills an employer needs. The rela- develop specific, concrete skill sets. This becomes a cir-
tive inability to clearly link what employers claim to be cular logic problem: employers do not bother to define
looking for and the demonstrated skills of prospective skills in part because they will be hard-pressed to vali-
employees is likely a prime contributor to the widely date whether applicants have those skills anyway, while
discussed “skills gap.” programs have less incentive to define and measure spe-
As hiring managers struggle to define or articulate cific competencies until employers do. Although both
the targeted skills or competencies required for specific sides would benefit from more efficient matching, few
roles, they resort to the traditional, general skills most on either side have been willing to take the first step.
easily identifiable through the recruiting process. This Again, CBE programs offer a potentially dramatic
lack of articulation is evident in figure 13, which dis- improvement over this status quo. A s­kills-matching
plays the importance that employers attach to various approach enabled through a CBE/employer partner-
applicant characteristics. Employers ultimately place ship could be significantly more efficient than the cur-
high importance on general skills such as problem solv- rent approach, in which employers compete over a
ing, teamwork, and communication and less emphasis limited set of “generalists.” In other words, CBE has

13
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 14 decisions on the specific competencies indicated by an

Hiring Managers’ Views on the Core Purpose applicant’s CBE curriculum.
of E ducational I nstitutions
A Path Forward for CBE: Opportunities and Chal-
Which of the following do you think lenges. The dearth of employer-articulated work-
should be the core purpose place competencies—like the lack of general CBE
of educational institutions?
awareness—is both an opportunity and a challenge for
competency-based programs. As we have argued from
n=479
100% the start, as CBE programs continue to expand, they
will need to better address the concerns of employers
head-on to take full advantage of the significant oppor-
80 tunities to align their work with what firms need.
To develop specific,
concrete skill sets The good news for CBE programs is that employ-
ers in our sample expressed a strong willingness to col-
60
laborate. Across nearly all industries, we saw employers
who were open and eager to engage with CBE insti-
tutions in formally established partnerships. In many
cases, acceptance of the model was couched on the
40
condition that CBE institutions work with employers
To develop broader,
more general capabilities to develop benchmarks. As one hiring manager put it:
“Working directly with staff at educational institutions,
20
we can be sure to match the demands of our company
to the instruction the students are receiving. Noth-
ing is more important than understanding the actual
0 skills needed to be successful in a particular industry,
Total
rather than theoretical knowledge that doesn’t pertain
Source: Author’s calculations using Parthenon-EY survey of hiring to anything.” The hiring managers we surveyed hope to
managers.
utilize potential partnerships to collaborate on compe-
tency definition, program alignment and development,
the potential to alter what has historically mattered to and ultimately recruiting efforts (including intern-
employers. As figure 15 illustrates, hiring managers ships), all of which would directly benefit employers,
report placing a tremendous amount of emphasis on CBE programs, and the student.
the prior experience of potential employees in recruit- Such collaboration would enable CBE programs to
ment and selection. CBE programs offer employers offer a clear pathway to employment that is rare in tra-
the ability to evaluate prior experiences not just in the ditional institutions. Formal partnership or collabora-
workforce, but also through academic courses of study. tion between colleges and universities and employers
It is also likely that employers typically see few alter- is targeted at best. Many employer relationships stem
natives to these traditional approaches and are frus- from individual faculty members engaged in one-off
trated by their inability to gauge applicant skills a research or consulting-based projects, or through a
priori. However, if they were better able to trust the career services office that often struggles to connect aca-
specific skill sets that graduates of particular postsec- demic experience to specific work-ready skills.
ondary programs come equipped with, then we believe CBE programs have the potential to change this
employers would place much greater importance on relationship, partnering with employers to help develop
demonstrated skill sets than they currently do. Instead skills that students need to thrive in their chosen indus-
of relying on the blunt signals of prior experience and try. Not only could employers help CBE programs pri-
paper credentials, firms could increasingly make hiring oritize and develop the skills that employers need, but

14
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 15
Importance of Various Criteria in Making Hiring Decisions

Please rate the importance of the following criteria in making hiring decisions on a scale of 1 to 7:

n=461 n=457 n=469 n=468 n=456 n=463 n=469 n=477 n=475 n=449 n=472
100%

7=
Extremely
Important
80

60 6

40
5

20 4

3
2
0
1=Not at All Important

Sample Portfolios Certifi- Degrees Prestige Prof. Certs GPA Résumé References Prior Fit
Work cations Exp. - Other

Demonstrated Skill Sets Credentials Prior Experience

Note: Question was scored on a scale of 1–7, with 7 meaning “extremely important” and 1 meaning “not at all important.” Variations in n are due
to respondent use of hiring criteria; respondents were asked criteria importance only if using that criteria.
Source: Author’s calculations using Parthenon-EY survey of hiring managers.

they could similarly help employers better define the Right or wrong, the hiring managers in our survey
competencies their employees need and, eventually, seemed to view a discrete skill set—like what is often
produce candidates with those targeted skills. As one taught in competency-based programs—as a necessary
respondent put it, “We like the idea of having a direct but insufficient part of a demonstrated skill set. Most
pipeline with new talent that we know has relevant employers want to see some set of general skills—inter-
qualifications, including both experiences and skills personal skills, ability to adapt, or abstract thinking—
that match our needs.” and express concerns that these general skills will not be
There are, of course, challenges to such collabora- adequately developed in a targeted CBE program. As
tion. As figure 16 illustrates, employers reported a con- one survey respondent put it, “Potential CBE gradu-
cern that CBE graduates will be less well-rounded or ates may not be as versatile and may not be able to hold
will have fewer interpersonal skills than graduates from various jobs throughout their life due to narrow scope
more traditional education models. Although CBE pro- of skill sets.”
grams do offer an improved means of delivering and Although there is no necessary tension between
measuring specific competencies, they must also address “specific” and “general” skills, the perception among
the general skills that are so ingrained in traditional employers is real. Hiring managers repeatedly reported
approaches to recruiting and evaluating applicants. that someone with a set of skills that are “too specific”

15
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

Figure 16
Employer Concerns about Hiring CBE Graduates

Please tell us how much of a concern the following risks of hiring

CBE candidates would be to you.

n=479 n=479 n=479 n=479

100%
7 7 7
7

6
6
80 6
6

5
60 5 5
5

40
4 4 4
4

20 3
3 3 3

2 2
2 2
1 1 1 1
0
Not as well rounded Fewer comm./ Less familiar with CBE Unsure certify to level
interpersonal skills of competency
company requires

Note: Question was scored on a scale of 1–7, with 7 meaning “extremely concerned” and 1 meaning “not at all concerned.”
Source: Author’s calculations using Parthenon-EY survey of hiring managers.

may ultimately “lack the level of problem solving and to evaluate information and opinions” or “exhibit-
analytical skills needed to think beyond the current ing self-awareness,” among many others. Highlight-
competency.” As mentioned earlier, this perception ing these competencies, validating them, and—most
may play into hiring managers’ reluctance to hire CBE important—marketing them as real outcomes of a
graduates for more senior posts and may ultimately cre- competency-based education could go a long way
ate a potential handicap for CBE graduates entering the toward correcting this misperception. Providers not
labor market. currently focused on these competencies could also
Given existing employer approaches to hiring that are, concentrate on developing and measuring these skills
at least for the time being, less grounded in specific tech- while students are enrolled. Alternatively, they could
nical skills, CBE programs would be wise to counter the use a screen in the admission process (such as accepting
apparent concern that these programs are too targeted to only students who demonstrate these skills).
inculcate the kind of general skills employers value. Of course, firms should also ask themselves if tra-
CBE programs could address the requirement ditional four-year programs truly teach the general
that their graduates have well-rounded problem- skills they seek or if these programs are simply more
solving and personal-communication skills in a num- likely to select students who already have those com-
ber of ways. First, many providers are already measur- petencies. Surveys of employers suggest that they are
ing competence in general skills like “thinking critically often disappointed in recent college graduates’ general

16
EMPLOYER PERSPECTIVES ON COMPETENCY-BASED EDUCATION CHIP FRANKLIN AND ROBERT LYTLE

skills.5 Clearly, traditional higher education institu- acceptance and enthusiasm seem to follow closely.
tions struggle with some of the same employer reac- Interest in the potential for close collaboration remains
tions when it comes to preparing graduates for the high across a broad array of firms, with employers of
world of work. all shapes and sizes embracing the chance to engage
As employers become more aware of CBE pro- more deeply with the world of academia and seeing
grams—and gain experience with CBE graduates as ­competency-based programs as a high-potential entry
applicants and new hires—these concerns will likely point to such partnerships.
be mitigated. However, in the immediate term, these Institutions offering CBE programs should embrace
issues can be addressed by closer collaboration through this opportunity, partnering closely with employers to
partnerships, targeted messaging, and even specific cur- bridge the traditional divide between academia and the
riculum and assessment directed at the kinds of general labor market. Such partnerships can help create com-
skills that employers value. mon ground to examine, define, and better articulate
programs and competencies, a process that will provide
students with the general and specific skills needed to
Conclusion succeed in the labor market without breaking the bank.
That is a value proposition that is tough to beat.
Our survey results suggest competency-based programs
must acknowledge the potential for some of their stron-
gest selling points—reduced time to degree, afford- Notes
ability, and increased flexibility—to affect employers’
perceptions of the programs. In marketing themselves 1. Online survey conducted by Parthenon-EY, September
to students as “faster, cheaper, and more flexible,” CBE 24–30, 2014.
programs risk marginalizing a vital link in their com- 2. Accuracy reasons include responding with the same
pelling value proposition: the employers. answer to every question, finishing the survey impossibly
These programs do so at their peril, as into this quickly, or answering in an easily recognizable pattern (for
void seeps confusion as well as misperception of the example, A then B then C then A).
benefits CBE programs tout to prospective students. 3. Neither figure is statistically significant at the 10 percent
Instead of internalizing the student value proposi- level. States not represented are Mississippi, Idaho, Hawaii,
tions centered on lowering debt loads, increasing per- Rhode Island, South Dakota, North Dakota, and Vermont.
sistence toward graduation, and streamlining the time 4. Capella University, “FlexPath Self-Paced Learning,”
to degree, our national sample of hiring managers was www.capella.edu/flexpath-self-paced-learning/.
generally unaware of competency-based programs or 5. Scott Jaschik, “Well-Prepared in Their Own Eyes,”
the benefits they could deliver for both students and InsideHigherEd, January 20, 2015, www.insidehighered.com/
employers. The good news is that awareness seems to news/2015/01/20/study-finds-big-gaps-between-student-and-
breed support. But it also brings challenges; rather employer-perceptions.
than focusing on CBE programs’ ability to deliver
applicants whose skills are tailored to employer needs
(which employers see as valuable), hiring managers Other Papers in This Series
worry that this comes at the expense of the general •T
 he Landscape of Competency-Based Educa-
skills that are so crucial to ultimate success on the job. tion: Enrollments, Demographics, and Afford-
Leaving these often-underinformed perceptions intact ability, Robert Kelchen
will cap the expansion of CBE opportunities and the •M
 easuring Mastery: Best Practices for Assess-
model’s relevance to a wider segment of students. ment in Competency-Based Education, Katie
And yet, our survey suggests that employers are Larsen McClarty and Matthew N. Gaertner
poised for engagement. As awareness increases,

17
 About the Authors

Chip Franklin is a vice president of Parthenon-EY, based in the Boston office,

and is a full-time member of Parthenon’s education group. His work focuses
on higher edu­cation, including colleges and universities, national foundations,
and policy organizations, as well as private-sector organizations serving the sec-
tor. Franklin leads the majority of Parthenon-EY’s projects with institutions of
higher educa­tion, working with colleges and universities across the spectrum,
from vocational schools to liberal arts institutions, independent institutions
to state systems of higher education. He also leads both the Boston Higher
Education Innovation Council and California Higher Education Innovation
Council, gatherings of leaders in higher education to discuss key strategic issues
facing the sector.

Robert Lytle is a managing director of Parthenon-EY, based in the Boston

office, and is cohead of Parthenon’s education group. For more than 15 years, he
has led client engagements on general strategy, performance improve­ment, and
investment due diligence across a broad spectrum educational organi­zations.
His clients include high-growth companies, publicly listed Global 100 compa-
nies, nonprofit institutions, financial investors, and international govern­ments.
In addition, Lytle has participated in numerous high-profile corporate turn-
arounds, mergers, divestitures, and privatizations in Europe, North Amer­ica,
Latin America, the Middle East, and Asia. He is a frequent speaker at leading
global forums on the education sector. Previously, Lytle was with Bain & Com-
pany and served as a US Army aviator..

Acknowledgments

We would like to thank our Parthenon-EY team for their deep contributions
to the research, thinking, and insights behind this effort: Jeff Bates, Will Eger,
Becca McGovern, and Jordan Melcon have been invaluable resources and tireless
thought leaders in understanding the critical links between higher education and
the labor market. Andrew Kelly, Daniel Lautzenheiser, and Rooney Colum­bus
at AEI have similarly provided an invaluable and much-needed sounding board
throughout the process.

18