Digital badges are a validated virtual representation of an individual’s successful development of a new skill or completion of a project or level of education. They’re becoming increasingly popular as companies offer badges as part of recognition programs, and employees use them to display their knowledge, skills and abilities (KSAs) to current and prospective employers.

Reflecting this growing popularity, Credly, a digital credential creation and management company, has raised more than $7 million and recently acquired Pearson’s Acclaim badging business. Pearson is taking a minority equity stake in Credly as a result of the acquisition, which the press release described as creating “the most comprehensive solution suite for skill recognition, credential verification, and talent management.”

Credly’s platform enables companies to create digital credentials with meta data; issue them to employees, customers or partners; and use analytics tools to inform training, marketing, talent management, partnerships, and other initiatives. For example, IBM issues digital badges to employees for a variety of skills, and because of the transparency provided by digital badges, Finkelstein says, the company has been able to partner with Northeastern University to accept those badges as credit toward a master’s degree program.

Finkelstein believes digital badges will become an essential tool in the corporate learning toolbox. “The mindset that we see among organizations now is not if they should issue digital credentials,” he says, “but when and how.” Organizations now believe it’s important to “create a culture of recognition … that hands over portable evidence to people of the skills they’ve mastered and the knowledge they’ve attained.”

Beyond culture, though, digital credentials can support talent development and management decisions. They help “create a common definition of the skills the organization values, empower and delegate different departments and teams to reward and acknowledge those skills in a consistent way across the organization, and then get a much better and more comprehensive picture across the organization,” Finkelstein says. This way, organizations can see everyone’s KSAs and make sure they’re being acknowledged and used to the greatest benefit of both the organization and the employees.

Best Practices For Using Digital Credentials

“The key behind giving [the] credential and ensuring that credential has meaning,” says Finkelstein, “is to make sure that it’s backed up by data.” The metadata contained in a digital badge are the evidence that the credential is valid and the details the user’s employer needs in order to use the information for talent decisions. If you’re creating the badge, make sure you include details like what the KSA is, what the user did to achieve it, and the competencies he or she now has. If you’re using a badge created by another organization to assess a current or potential employee, make sure the badge includes those data and was issued by a reliable source.

“A really important best practice,” Finkelstein says, “is to think about your communication strategy when you introduce credentials.” Demonstrate the value of the credentials to learners and the organization, and explain the next steps for both employees and managers after a badge is earned and issued.

What’s Next?

Finkelstein says he’s seeing “a lot of growth in the kinds of assessments and authentic experiences that can [generate] evidence of achievement,” and new platforms and tools will soon be issuing digital credentials in real time, immediately after they are earned. He also believes that technology will enable better analysis; “in other words, what can we learn about the populations we serve by understanding how and where they put their credentials to use?” Blockchain may also start playing a role in credentialing.

Partnering with Acclaim, Finkelstein says, will ensure that customers “can really tap into all parts of their life when it comes to sharing what they know and what they can do.” Whether your organization uses Acclaim and Credly or another issuer, what is clear is that recognition technology is a trend that’s not going away.