“My dog has an online MBA,” says Vicky Phillips, and in six words she’s captured the worries that may furrow a hiring manager’s brow as she looks at a résumé. It’s not always easy anymore to know what an undergraduate or graduate degree represents.

Phillips is a consumer advocate and expert on the online education industry who founded GetEducated.com 24 years ago. The Vermont-based site researches and rates online degree programs, teaches students to shop for a high-quality online education, and uncovers “diploma mills.” Her pug, Chester Ludlow, really did get an MBA a few years ago from Rochville University, one such mill, for $499. (“For another $100, he could have graduated with honors.”)

But set aside the problem of bogus degrees. Those were around long before online education. Likewise, employers have always had to distinguish between the top degree programs in their industry and the fair-to-middling remainder. What’s different now is that people who make hiring decisions have to assess the value of a candidate’s degree even as the nature of post-secondary education is changing.

This year, Capella University, the Minneapolis-based for-profit online school owned by publicly traded Capella Education Company, marks its 20th anniversary. It has more than 36,000 students enrolled, but the industry has many larger players. Nationally, an estimated 6.7 million people are in online degree programs, according to the Babson Survey Research Group of Massachusetts’ Babson College. The explosive growth of online and for-profit education in the past two decades has changed the way people learn and earn degrees, not just by getting students out of the classroom, but by introducing new methods to the classroom.

Traditional campuses are eager to adopt elements of online learning and new “ed tech.” One reason is that they face pressure from employers to fill gaps in the work force. MnSCU, the Minnesota State Colleges and Universities system, hosted 55 listening sessions with employers last year and heard frustration about the shortage of skilled workers.

“We learned that regardless of what industrial sector, or regardless of what corner of the state you live in, people were concerned not just about technical skills, but also what I call foundational skills, the deeper skills of critical thinking, communication, collaboration,” MnSCU Chancellor Steven Rosenstone told Twin Cities Business last winter. Strategic planning ensued. In June, MnSCU announced its six new priorities, including the creation of a new “statewide e-education platform.”

Meanwhile, Bob Hildreth says that college degrees from whatever sort of program have lost some of their importance in his industry. Hildreth is CEO of ESP, a Minneapolis IT firm that finds software, mobile app, and web developers for direct hire by client companies. Because IT talent is hard to come by, his clients just want someone who can get the job done.

“Even a couple of years ago, over 50 percent of our jobs . . . would have required a degree,” Hildreth says. Today, “we’re hovering right around 30 percent of our clients [that] are requiring a degree.” In another area of his business—placing developers as temporary staff—that figure is much lower, “maybe less than 5 percent.”

Looking Past Online’s ‘Dirty Brands’

“Higher education definitely is in a crisis period, whether it’s online or otherwise,” Phillips says. “It’s struggling to define itself.”

She’s watched changes in online education since 1989, a year when few people had Internet access and online degree programs were rare. That year, she polled more than 100 Fortune 500 employers to gauge their acceptance of online degrees. “Half of all the corporate managers that we surveyed thought that they were as good as traditional residential degrees,” Phillips says. “By 2012, we had a 90 percent approval rating.”

The different timeframe or survey methodology could account for different results reported by the Society for Human Resources Management. SHRM found in its 2010 survey of 450 HR professionals that 49 percent believed online degree programs were as credible as traditional ones. But only 34 percent said they would view a job candidate with an online degree just as favorably as a candidate with a traditional degree.

Where there is a lack of acceptance, Phillips pins it largely on online education’s “dirty brands,” her term for the 13 or so big, for-profit, publicly traded companies that dominate advertising and public awareness about online education. Most, but not all of them, have faced legal challenges of some sort—accusations that they’ve abused financial aid, been deceptive about accreditation, or been dishonest with applicants about their chances of finishing a degree and getting a job.

These few dirty brands have tarnished others and have so overshadowed the industry, Phillips says, that many people aren’t aware of the much larger role nonprofit schools now play in online education. GetEducated.com reviews and tracks thousands of online degree programs. More than 85 percent “are from colleges that are traditional brick-and-mortar that have [highly credible] regional accreditation.” Those brands are the ones helping online degrees gain acceptance from employers, she adds. (See “What Gives Online Degrees Credibility With Employers?” on page 69).

Hildreth counts himself among the accepting. While he believes a college degree isn’t always necessary in his industry, when candidates have degrees, he doesn’t view them differently if they’ve studied in a for-profit or online program. “I tend to be much more liberal and look at [the reality] that we all have different life situations. The fact that somebody did complete their degree and had the initiative to do it, that’s really what I’m looking for.”

Nancy McGough, vice president of human resources for Minneapolis-based Room & Board, says something similar. “I don’t spend any time or put any weight on where that degree is from.” She makes no distinction between for-profit and nonprofit, public and private, online and traditional programs. “That just doesn’t have any weight whatsoever.”

Room & Board tends not to seek new college graduates as employees, putting “a great deal of weight” on work and life experiences, McGough says. “We’re a very relationship-based organization, and it’s about working with others, building teams, being empathetic, getting work done through others. And those are skills that aren’t necessarily, in my opinion, finely tuned in many academic institutions.”

Still Lacking the Fundamentals

It’s worth noting that even with new kinds of degree programs, employers’ concerns about them aren’t new kinds of concerns. Those who remain skeptical about online degrees talk about the same “foundational skills” deficits that came up in MnSCU’s listening sessions, in areas such as communication.

“We have people here who cannot put together a sentence,” says a human resources vice president who works for a health care system in rural Minnesota, who asked not to be named. She’s unimpressed by the online bachelor’s and MBA programs that her coworkers have enrolled in, especially programs that seem to require no screening of applicants and no face-to-face classroom interaction. When those colleagues ask, “What is your thoughts?” or remark that “We losed a good person,” she says their deficits in speaking, writing, and making presentations are more than an irritation to her. They detract from the whole organization’s image of competence and professionalism. “Frankly, it’s embarrassing.”

Marnie Barnhart, manager of recruiting and human resources for Leeann Chin, Inc., sees online graduates missing other abilities, including people skills. “Our organization places a higher value on candidates with traditional college experience and degrees,” Barnhart writes in an email to Twin Cities Business. “College students build significant experience and EQ [emotional quotient] as they learn to adapt and interact with students and staff in face-to-face situations in the classroom, study/work groups, [or with] lab partners.”

Barnhart hires both headquarters staff and restaurant managers, and she looks for people who can take an active leadership role, which raises another concern: “It’s my perception that traditional colleges require students to be more aggressive to succeed due to more rigorous academic coursework and classroom standards. On the contrary, I have the perception that alternative post-secondary programs promote an environment where candidates may still succeed despite having passive personality characteristics.”

But in some companies, the requirements of the workplace are changing, Phillips points out. It’s true, she says, that social interaction and emotional connectedness are significantly “superior in residential learning.” The flip side is that technical skills and virtual communication are built by working online, and “many workplaces are looking for that because they build virtual teams.”

Integrating All the Best Parts

The HR managers interviewed for this story say the credentials are few and far between that would signal “strong candidate” to them right out of the box. Both Barnhart and McGough say a degree from the University of Wisconsin–Stout is one that stands out. In their experience, graduates from Stout’s retail and hospitality management programs have proven to be valuable and successful employees. Normandale Community College “has a really good program in hospitality management as well,” Barnhart adds.

What if more degrees had that kind of instant “readability” for employers? An initiative from Southern New Hampshire University is designed to move higher education in that direction.

SNHU is a private, bricks-and-mortar school in Manchester and the fourth-largest nonprofit provider of online higher education in the country. Last year, it launched College for America, whose graduates can earn an associate’s degree without ever taking a course or completing a credit. Instead, for $2,500 a year, they will learn and demonstrate mastery of 120 specific “competencies,” including: “can distinguish fact from opinion,” “can generate a variety of approaches to addressing a problem,” and “can convey information by creating charts and graphs.”

Competencies are grouped into nine “priorities employers seek,” SNHU says, and they’re the very same foundational skills that seem to lurk in all conversations about what higher education needs to be teaching: communication, collaboration, critical thinking, and so on. Students can only enter the College for America through their employers, and some companies are subsidizing enrollment for their workers. Participants include Northeast Delta Dental, FedEx Express, ConAgra Foods, Sodexo, and Panera Bread.

Early this year, the U.S. Department of Education approved College for America’s request to receive federal financial aid. Department Undersecretary Martha Kanter reportedly praised the school as “the kind of innovation we hope to see across the nation.” But College for America, which was started in part with funding from the Bill and Melinda Gates Foundation, has plenty of detractors. They criticize the narrow, assembly-line nature of the teaching and what amounts to standardized testing of students’ abilities. As one commenter in the online Chronicle of Higher Education said, “Hello, No Child Left Behind for higher education.”

More promising in the view of many educators are the ways online and classroom learning are being integrated. One of the best known examples is the concept of the “flipped classroom.” Historically, a teacher delivers information in the classroom by lecturing. Students gather more knowledge through reading and then they do homework to apply what they’ve learned. A flipped classroom inverts that pattern. Information delivery happens at home, through online lectures and reading. Then students apply their new knowledge by doing projects in the classroom, sometimes using an online environment. A teacher, maybe aided by tech monitoring and analytics, can see a student’s problem-solving in progress and give individualized, on-the-spot tutoring where there’s a gap in understanding or ability.

At the University of Minnesota–Rochester, Chancellor Stephen Lehmkuhle has been a champion of ideas like flipped classrooms. When the new campus, which focuses on life sciences, health care, and biomedical informatics, welcomed its first group of undergraduates four years ago, they entered classrooms where there was no “front of the room” and no intention of delivering lectures. Students spend class time actively using and demonstrating what they’ve learned, while professors watch them work and ask them questions. In May, when the Star Tribune covered the school’s first commencement ceremony, one graduate described his four years in the program saying, “They really set you up to be a thinker, not just a worker.” Hamline University, St. Mary’s University, and others in Minnesota are also beginning to flip classrooms and borrow from online education on their traditional campuses.

Will those changes make it any easier for an HR manager to know what the degree on the résumé means? Not likely. In fact, just the opposite. The BA or BS or MBA will represent an even bigger range of possible educational experiences and outcomes. But if one outcome is more people with the right technical and foundational skills to keep companies growing, that will be more than enough to make employers happy.