Four Reality Checks Before Developing a Certification

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    Four Reality Checks Before Developing a Certification


    Developing a credentialing program is never as easy as it might seem.

    Companies and professional/trade associations that undertake credentialing often discover that the process is more complex, technical and labor intensive than originally believed. That’s even true for organizations that performed meaningful due diligence.

    It’s essential that the credentialing committee, board members, staff and other stakeholders go into the process with eyes wide open. Here are four reality checks for credentialing sponsors.

    1. Credentialing involves risk

    Risk-225x347.jpg Per Lenora Knapp Ph.D., author of The Business of Certification, about 25 percent of new certifications are profitable within their first year. Another 50 percent will reach financial breakeven in 3-5 years. The remaining 25 percent will never cover their costs. They’ll be subsidized in perpetuity by their sponsors because of low testing volumes.

    Considering the time and resources required for bringing a new credential to market, the above financial risk must be understood by all credential stakeholders.

    There’s also legal risk, especially for high-stakes licensure exams, where the credential is mandatory for practice. If test candidates fail to obtain the credential, they may challenge the testing process. A challenge could mean a lawsuit. 

    Dr. Knapp advises consulting an attorney familiar with credentialing law before test-development begins to address these potential issues:

    • Failing to follow credentialing best practices
    • Unfair or unsound eligibility requirements
    • Not having written policies for handling appeals and disciplinary actions

    2. Credentialing involves pyschometricians

    They’re the experts on developing credentialing exams that are fair, reliable, legally defensible and consistent with credentialing-industry standards.

    Psychometric expertise is needed throughout the life of a credentialing program.

    Psychometricians are indispensable for managing subject matter experts whose participation is necessary before, during and after the development of the exam.

    3. Credentialing involves considerable upfront and ongoing costs

    Calculator.jpgThe cost to develop a legally defensible exam in accordance with credentialing industry standards and best practices could range from $200,000 to $500,000.

    Even the lower end of that range will stop some credentialing plans immediately, so it’s best to create a budget at the beginning of the credentialing conversation.

    Not only could actual test development costs be considerable, but money must also be available for launching the credential and then marketing it on an ongoing basis. “If you build it, they will come” has proven to be a failed marketing strategy. The early years of the program tend to be the most challenging because marketing expenses are high (to overcome the program’s anonymity) while testing volumes and revenue are low.

    Also, new test items must be developed on a regular basis to replace ones that become overexposed. A job analysis must be performed every few years to ensure that the test remains current with the knowledge and competencies required of the minimally qualified candidate.

    4. Credentialing requires human resources

    The development and long-term management of a credential involves the sponsoring committee and association staff including a program manager(s), membership services and volunteers like subject matter experts and beta-test candidates. They’re will also be regular or periodic needs for consultants for psychometric, legal and marketing services.

    Last words

    The four reality checks above are sobering, but they’re not meant to be discouraging. We have the privilege of working with dozens of successful credentialing programs that have managed the four reality checks quite well.

    We’re happy to share with you our insights and observations working with large and small programs during the past 20 years. So, if you’d like to talk about your first, next or current certification, please feel free to schedule a free, no-obligation, 30-minute call with one of our friendly (and really smart) psychometricians. Just click here to get started!


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