How to Build a Financially Sustainable Microcredential Portfolio

Professional, continuing, and online (PCO) education units have long been a source of growth and innovation for their institutions. Today, microcredentials have taken center stage as a potential growth opportunity for three reasons: leaders believe that shorter format credentials are the future of higher education, their cabinets or boards expect them to build out a microcredential portfolio, or they feel pressure to keep up with other institutions making similar bets.

Before establishing a portfolio of offerings, some PCO leaders first push for a shared definition of microcredentials. In fact, some leaders have argued that the absence of a singular definition is what prevents their institution from making progress. Based on interviews with Canadian and Australian leaders where provincial or national frameworks exist, this is not the case. Those leaders felt their definitions were too broad to be productive references. Furthermore, they encountered the same resistance to growing microcredentials as American institutions do.

Evergreen—and new—internal headwinds

In building microcredential programs, PCO leaders face the traditional barriers to academic innovation, such as developing new policies and processes. However, leaders also face new challenges. The most acute challenges are the higher-than-expected upfront costs and unpredictable revenue.

No such thing as a low-cost, high-return microcredential

PCO leaders with more mature microcredential portfolios have found that upfront development and launch costs are often higher than anticipated. For institutions starting from scratch, customizing offerings to labor market needs, and hiring additional staff, the price tag can run as high as $250,000. Even a “zero-cost” credential strategy—where the PCO unit badges skills (typically at the undergraduate level) and offers most programs as non-credit—costs around $25,000.

Furthermore, institutions seeking speedy and substantial returns from microcredential investments may struggle to calculate revenue or see low returns. 74% of PCO leaders reported they “do not know” how much revenue their programs earn. For those that do, the median institution generates approximately $200,000 per year.

Four tactics to build a financially sustainable microcredential portfolio

To account for this risk, institutions must build foundational practices that can serve as guardrails for microcredentials while benefiting the PCO unit at large. Leaders must make financial considerations central—and essential—to program launch and evaluation decisions. This report delves into four tactics to build a financially sustainable microcredential portfolio.

• Tactic 1: Nurture promising microcredential ideas
• Tactic 2: Build a better microcredential proposal form
• Tactic 3: Conduct an independent assessment of microcredential viability
• Tactic 4: Develop and implement a microcredential sunsetting policy

This report also includes two tools to help leaders propose strong microcredential ideas and for PCO offices to evaluate them.

• Tool 1: Microcredential Proposal Form
• Tool 2: Microcredential Evaluation Form

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