Purpose: This study explores the perceptions of Australian employers regarding the benefits and challenges of micro-credentials within higher education and enablers of their effectiveness. Design/methodology/approach: A qualitative approach that included 11 semi-structured interviews with employers affiliated with an Australian university was used. A deductive thematic approach was employed to analyse the data. Findings: Micro-credentials were generally seen to be beneficial for an array of people, including employees, employers, customers and communities -- stakeholders in all environmental layers of micro-credentials' ecological system. Findings also indicated that both challenges of micro-credentials and enablers of their effectiveness depended heavily on attributes of learners, employers and higher education providers. The conclusion is that, based on the evidence of this study, micro-credentials within higher education are worth trialling. Originality/value: Although research interest in micro-credentials is growing, few empirical studies have investigated micro-credentials' benefits, challenges and enablers of effectiveness, especially from the perspective of employers. The study carries practical and policy implications for those involved with micro-credential research and development.