A tightening pool of talent — both contingent and direct hire — has pushed program managers to seek new pipelines of talent and review their standard requirements.
Many employers are finding that candidates with impressive academic qualifications can lack the specific skills necessary to hit the ground running on day one and need additional hands-on training. And from the candidates’ perspective, the ever-increasing cost of a college education puts a bachelor’s degree out of reach for many talented people.
Could a hiring approach focused on skills provide more opportunities to a wider demographic of potential talent and create a bigger talent pool for your organization?
Reducing Degree Inflation
Two decades ago, companies began adding degree requirements to job descriptions, even though the jobs themselves hadn’t changed, according to The Harvard Business Review. But following the Great Recession of 2008-2009, many large corporations backed away from the trend — sometimes dubbed “degree inflation” — and eliminated degree requirements for much of their hiring.
Educators from Harvard Business School last year partnered with the Burning Glass Institute to analyze more than 51 million jobs posted between 2017 and 2020. The research found many companies are moving away from degree requirements and toward skills-based hiring, with employers reducing or degree requirements in job postings for a wide variety of roles.
The change is most noticeable for middle-skill positions, defined as those requiring some post-secondary education or training but less than a four-year degree. To a lesser extent, the change is also noticeable at some companies for higher-skill positions.
“Employers are resetting degree requirements in a wide range of roles, dropping the requirement for a bachelor’s degree in many middle-skill and even some higher-skill roles,” states their report, “The Emerging Degree Reset.” “This reverses a trend toward degree inflation in job postings going back to the Great Recession. And while the Covid-19 pandemic accelerated this process, this reset began before the crisis and is likely to continue after it.”
Between 2017 and 2019, employers reduced degree requirements for 46% of middle-skill positions and 31% of high-skill positions, the research found. Among the jobs most affected were those in IT and managerial occupations, which were hard to fill during that period. Only 27% of the changing occupations could be considered “cyclical resets,” or short-term responses to the pandemic. The majority, 63%, appear to be “structural resets” that began before the pandemic, representing a measured and potentially permanent shift in hiring practices.
The report also found that when employers remove degree requirements, they become more specific about the needed skills in job postings, spelling out the soft skills that may have been assumed to come with a college education, such as writing, communication and being detail oriented.
“Degree resets occurred in multiple sectors before the onset of Covid-19 and accelerated as a function of the pandemic, spreading to new occupations,” the report states. “If these trends continue, we project that an additional 1.4 million jobs could open to workers without college degrees over the next five years.”
Hiring Managers on Board
More than half of hiring managers, 53%, reported their company eliminated the requirement for a bachelor’s degree in some or all roles where a bachelor’s degree is not essential, according to a survey of 1,000 US hiring managers conducted in January by Intelligent.com, a resource for online degree rankings and higher education planning.
Of those who eliminated the requirement for a bachelor’s degree, 60% said they did so for entry-level roles, while 57% removed the requirement for midlevel positions and 33% for senior-level positions.
When asked why their company eliminated the requirement for a bachelor’s degree, 64% of hiring managers said it was to increase the number of applicants. Additionally, 58% of hiring managers reported the company removed the requirement to create a more diverse workforce, and 59% said it was eliminated because the company believes there are other ways to gain skills.
“The majority of what one learns in order to obtain a college degree is not actually used in the workplace,” said Intelligent.com Chief Career Advisor Stacie Haller. “With the exception of professional services such as accounting and law, the value companies see in a candidate having a bachelor’s degree is evidence that the applicant is able to learn, meet deadlines, etc.”
Haller noted that work experience and some testing in the hiring process can equally demonstrate that a candidate has these skills.
“Plus, when it comes to a new job, many of the skills needed to perform well require training once hired anyway. Companies are now realizing they can train for the skills they need, and the degree requirement just needlessly eliminates strong candidates.”
Talent Taking Note
As for the job seekers, they also increasingly question the value of a four-year degree.
While colleges have been hit with enrollment declines and growing sentiments that a four-year degree is no longer “worth it,” many trade programs across the country are experiencing the opposite — enrollment is increasing, Business Insider reported, citing research from the National Student Clearinghouse.
“I say if you find out college isn’t for you, you don’t learn that way, you’d rather learn hands-on — stay out of student debt, try out a trade,” Nathan Allred, a sheet-metal apprentice, told Insider.
“I’m able to raise my family,” he added. “I love what I do, and I just work with a great group of people, and I have my career set.”
Look for part two in an upcoming issue of CWS 3.0, which will address ways CW program managers can approach skills-based hiring at their organization.