Competency-Based Education as a Workforce Development Strategy

This piece is part of a series exploring competency-based education (CBE). This piece explores the relationship between CBE and workforce development, including key considerations and challenges.

The American and global workforces are at a turning point. Workers and employers must contend with fast-evolving technological changes, such as the rise of artificial intelligence and automation, as well as the changing nature of work, through moves to remote work and the gig economy (Hollenbeck, 2023). The COVID-19 pandemic further disrupted the labor market, triggering a record number of career shifts and retirements (Clayton et al., 2022). As workers transition between jobs more frequently and employer needs shift, the demand for skill-building opportunities and lifelong learning continues to grow. The World Economic Forum estimates that nearly half of all workers will require reskilling or upskilling throughout their careers (World Economic Forum, 2020).

There has also been a trend toward more skills-based hiring in the United States, with employers focusing more on job-specific skills and competencies rather than formal educational requirements. Recent data from Indeed’s HiringLab, for example, showed that between 2019 and 2024, there was an increase in job postings without formal education requirements as well as a decrease in postings requiring a college degree (Stahle, 2024). Survey results from the National Association of Colleges and Employers also found that nearly two-thirds of employers reported using skills-based hiring for entry-level positions (Gatta, 2024). Given these rapidly changing dynamics, the need for skills-based, adaptable, and affordable workforce development models is urgent. CBE is uniquely positioned to meet these demands by assessing learners based on demonstrated, career-aligned proficiencies rather than seat time, and providing a shared language of competencies that bridges the understanding between employers and higher education (Rege & Parsons, 2024).

The CBE model is well-suited for workforce development because it prioritizes in-demand skills aligned with employer needs and uses authentic assessments that mirror real-world job expectations (Competency-Based Education Network [C-BEN], 2021). CBE’s flexible structure allows learners to progress at their own pace, with recognition of prior knowledge and existing skills; this flexibility has the potential to accelerate workforce entry and ease career transitions compared to traditional 2- or 4-year degree tracks (Mills, 2022). The CBE model also enhances transparency by clearly defining competencies; this benefits students by helping them meet their learning goals and allows employers to assess candidates against industry standards (Rege & Parsons, 2024). Ideally, skills-based hiring will involve organizations and education providers identifying and recognizing the competencies needed for specific roles and focusing on the demonstration of those competencies and skills rather than the pathway to achieve them (Curnow & Baker-Inzitari, 2023).

As both employers and educational institutions move towards a greater emphasis on skills, the language they use can differ. Employers are more likely to use terms like skill-based or skills-first practices, while postsecondary education institutions more commonly use the term competency-based education (Rege & Parsons, 2024). While skills-based hiring and competency-based education share common principles—such as valuing demonstrated proficiency over traditional credentials—many employers may not explicitly recognize or label their approach as "competency-based." Strengthening employer awareness of CBE frameworks and integrating CBE into workforce training can help bridge this disconnect, ensuring alignment between educational pathways and employer expectations (Rege & Parsons, 2024). Though it requires a shift in mindset and practices, using skills-based hiring and promotion can have several benefits for employers. By focusing on skills and foregoing degree requirements, companies can greatly increase their pool of local, qualified workers and more efficiently match candidates to open positions (Rege & Parsons, 2024).

This shift towards skills-based recruitment is fueling the demand for non-degree alternative credentials that can quickly and cost-effectively equip workers with relevant skills. The Society for Human Resource Management (SHRM) defines these alternative credentials as any credential that “indicates one’s competencies and skills within a particular field” outside of a degree or required licensure (2022). Non-degree offerings such as certifications, micro-credentials, badges, employer-sponsored training, and stackable or modular credentials have risen in popularity in recent years. A recent survey found that almost half of U.S. workers report having an alternative credential, and more than two-thirds of those with alternative credentials reported that it has helped them further their careers (SHRM, 2022). While not all alternative credentials follow a CBE model, many demonstrate the key components of proficiency-based authentic assessments and flexible timeframes. The transparency of CBE competencies, along with their modularity, makes competency-based frameworks very well-suited to alternative credentials; the language of competencies can provide a shared understanding between learners, higher education institutions, and employers (Braxton, 2023).

Building strong partnerships between higher education, employers, and industries can enhance the credibility and adoption of CBE workforce development programs. These collaborations help align competencies with industry needs and ensure the resulting credentials are recognized and valued by employers. The Competency-Based Education Network (C-BEN) has identified many ways in which higher education institutions and employers can partner to develop mutually beneficial programming, such as scholarship agreements, custom training programs, and strategic partnerships for degree or program development (C-BEN, 2019). Collaborating with local or state workforce development boards is another potential way for higher education institutions to gain insight into the labor market, ensure their offerings target the competencies that are in demand with local employers, and develop career pipelines (Bertolini, 2022).

In several sectors, higher education has already successfully integrated CBE principles and industry engagement into its workforce development efforts. Healthcare partnerships show how alignment can lead to better student and patient outcomes and industry recognition. In nursing, for example, academic-practice partnerships (APP) between universities and healthcare systems ensure nursing students develop the clinical competencies needed for successful practice and positive patient outcomes (Gustin et al., 2024). One survey found that healthcare alternative credential programs were rated most highly by alumni in terms of quality and value (Hanson, 2021).

Similarly, in the retail and business sectors, companies like Walmart have partnered with universities to provide current employees access to degrees in business, supply chain, transportation, and logistics management through its Live Better U educational benefits program (Stomski, 2024). Some higher education institutions have started integrating credentials both from within and outside of the institution into incremental degree pathways (Mills, 2022). For example, Arizona Western College offers a Google IT-Amazon Web Services joint certificate, providing students with a comprehensive understanding of IT support and cloud computing (Arizona Western College, n.d.).

Among higher ed institutions, community colleges have a history of being innovative and working with employer consortiums to ensure they are aligned with local needs and priorities (Zanville & Valdez, 2024). Some employers have recently been working directly with community colleges to align programs and competencies with high-demand skills in local industries to ensure employment prospects; this partnership also ensures employers have a pipeline of qualified candidates (Rege & Parsons, 2024). For example, Westmoreland Community College in Pennsylvania has expanded its Advanced Manufacturing and Robotics program, which culminates in an apprenticeship with local manufacturers like DMI Companies, a leading producer of HVAC supplies. This program is helping to fill the manufacturing skills gap in western Pennsylvania (Pennsylvania Commission for Community Colleges, 2020). Community colleges are particularly well-suited to meet local and regional employment needs by using local labor market data to develop and appropriately update their offerings based on shifting demand (Atwell et al., 2022). In fact, a survey of adults who completed non-degree credentials found that credentials from community colleges consistently had the highest alumni ratings, with 78% reporting the program was worth the cost; this, in turn, leads to greater alumni satisfaction (Hanson, 2021). By engaging in employer partnerships and credential alignment, faculty and administrators can ensure their programs remain responsive to evolving workforce needs.

Despite the growing interest in skills-based hiring, challenges remain in ensuring the legitimacy and consistency of alternative credentials. Learners often face an overwhelming array of options, making it difficult to discern which credentials hold the most value (Hanson, 2021). Employers, on the other hand, may exhibit skepticism toward alternative credentials due to concerns about their legitimacy, quality, and relevance. Both employers and employees report that alternative credentials would be perceived as more valuable if there were a universally accepted method for verifying quality (SHRM, 2022). Additionally, many employers use automated applicant tracking systems, which often lack sections for alternative credentials, creating a barrier for their recognition (SHRM, 2022).

Notably, efforts to improve credential recognition and standardization are underway. In one collaborative effort to standardize interoperable Learning and Education Records (LER), the LER Accelerator, 12 leading national associations in postsecondary education have adopted a set of principles for LERs that are explicitly competency-focused and collaborative (LER Accelerator, 2025). The Center for Skills at C-BEN is another collaborative group that has brought together leaders in education, industry, and employer hiring systems to build trust, common understandings, and scalable methods for validating skills (C-BEN, n.d.). Still, openings remain for higher education to build meaningful partnerships in delivering desirable workforce development offerings. A survey of organizational leaders found that only 44% of interested organizations reported having been approached by a higher education institution about a potential partnership. When considering university partnerships, most interested organizations valued evidence of program efficacy, and over 50% indicated a desire to play an active role in developing the program (UPCEA, 2023). A sustained collaboration between education institutions, employers, and policymakers will be necessary to establish trust in CBE and in alternative credentials as a workforce development solution.

As workplace demands evolve, CBE continues to gain traction as a model that prioritizes demonstrated skills, flexibility, and alignment with current workforce development needs. The CBE model offers many potential benefits, including a shared language and understanding of clear competencies, for employers, education providers, and workers as the labor market shifts to skills-based hiring. The future of CBE in workforce development and the success of alternative credentials will depend on sustained collaboration between higher education, employers, industry leaders, and policymakers to ensure the quality of offerings and recognition of their value. With the power to provide a shared language between these groups, CBE has the potential to bridge the gap between education and the workforce by helping institutions and employers better articulate and validate the skills workers need to excel.

Arizona Western College. (n.d.). Google IT-AWS Joint Certificate.

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