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Sep 20, 2022

College degrees. It’s no wonder they’ve long been coveted. As recently as 2017 not having one was a serious impediment to employment and opportunity. Some 51% of all US jobs required one [according to data by Emsi Burning Glass, a labor-market analytics firm]. And some employers still prize them above anything else. Even last year, Microsoft required a college degree for 70% of its total job postings.

But as this years’ newest crop of college students (some 20 million of them), start their own four-year courses, could they be amongst the last that (really) actually need them? And isn’t it about time employers started telling them they could be wasting their time?

The answer could well be yes. According to recent research by The Burning Glass Institute, 63% of employers are now in the midst of a ‘structural reset’ – that is permanently resetting their post-pandemic entry requirements. Yes, it’s partly in response to a skills shortage (having a strict degree requirement eliminates the two-thirds of Americans that don’t have a college education) – but experts argue this change of mindset will not go backwards, and that the trend for not needing a degree will only intensify. In fact The Burning Glass Institute predicts 1.4 million jobs will open up to workers without college degrees in the next five years.

Firms are already ditching degrees

Companies already ditching degrees include Accenture (where just 26% of postings required one), and Bank of America, which no longer requires college degrees for the majority of its entry-level jobs. Google, Penguin Random House, Costco Wholesale, Hilton, Apple and Home Depot have all done the same, by spurning their need for one. Today, at computing giant, IBM, a staggering 50% of its advertised jobs are now open to those who don’t have a four-year college degree.

As IBM’s HRD, Nickle LaMoreaux says: “We have structured apprenticeship program instead, and an internal learning platform – a sort of ‘Netflix for learning’ – that is tailored to the individuals’ skillset IBM’s needs.” She adds: “Our organization has hired many people without a college degree, which topples a barrier to entry that’s kept minority groups out of future-forward jobs for a long time.”

Enrollments are falling too

To be fair to students, enrollments have been falling for some time. But data suggests this year’s intake is substantially – around 3.29% lower – than last year. While it may not sound much, it represents the most significant rate of decline since 1951. In fact, since 2010, overall enrollment has declined 9.6%.

Cost has undoubtedly become a factor. Data released by Best Colleges last month revealed the average total cost for a year of college at a four-year school – including tuition and fees, on-campus room and board, books, supplies, and other expenses — was $35,551. What’s more, college tuition has tripled in cost the past 50 years (1970-2020), and has more than doubled in the past 30 years (1990-2020).

Employers and job seekers are in agreement

So are employers and their potential employees coming to a unique point of alignment, where both are simultaneously coming to the conclusion that a degree is less important?

They could well be. Degree-inflation – the practice of companies requiring a degree even though they may not have been necessary – was rampant in the 2010s, and caused enrollments to global universities to more than double between 200-2014. But since then, companies have gotten more and more worried about the work-readiness of those leaving higher institutions.

For example, three in four US employers now say they have a hard time finding graduates with the soft skills their companies need, while in a 2019 report, the Society for Human Resource Management found that 51% of members said education systems have done little or nothing to help address the skills shortage.

It found the top missing skills include problem solving, critical thinking, innovation and creativity, the ability to deal with complexity and ambiguity and communication. Meanwhile, in the same year Amazon launched a $700m program to provide education and training to its existing degree-less workers – with it predicting it was more cost effective to train incumbent workers for management positions than rely on graduates.

“We’ve ditched degrees”

One firm that knows all about reappraising the value of degrees is Michigan-based Company Folders, which supplies products including document holders, report covers, binders and presentation folders. It’s just announced that it’s dropped the requirement for a degree, as its CEO Vladimir Gendelman explains:

“We had a copywriter, who became my executive assistant, and soon she wanted to move to a sales role. She didn’t have our normal requirement – a degree – but she was enthusiastic, and so we decided we would give her a try. Very quickly, she became one of our best performers because her attitude and willingness to learn was fantastic.”

According to Gendelman, “attitude eats education for breakfast,” and after being shown what a non-degree educated person could bring to the business, he decided to review all the roles in the company. In doing so he came to the conclusion that a degree was not essential.

He says: “We came to question whether we were limiting our talent pool by having this requirement. I think – like other companies – we fell into the trap of assuming we needed degree-educated people.” He adds: “But it’s clear college doesn’t always get people ready for work. What companies really need are people who can just figure things out, and have a great attitude to work.”

Gendelman says he wishes “he’d realized this earlier,” and in job interviews he says he has introduced more personality tests and basic problem solving to gauge people’s problem-solving and soft skills.

So does he have a message for other employers? You bet he does: “Give opportunity to people you may be overlooking. You don’t need to insist young people need a degree. You just have to look at what their potential is.”

Degree or not degree?

  • In 2017, 51% of US jobs required a degree. By 2021, that share had declined to 44%.
  • At Accenture the share of postings specifying a Bachelor of Arts degree or higher fell from 54% in 2017 to 43% in 2021.
  • Accenture wants to fill 20% of its entry-level roles from its apprenticeship program for its fiscal year 2022, an increase from 15% from the last year.
  • In 2018, Bank of America launched its Pathways program to correct misconceptions around college degree requirements and boost outreach to “valuable talent” in local communities.
  • Google now considers a range of education beyond formal university for potential hires, including certificates, such as Google Career Certificates for certain roles.

AI can better identify talent:

Recent research by the Society for Human Resource Management found that nearly one in four human resource professionals say they use artificial intelligence (AI) in their recruitment and hiring processes. Respondents to the research said AI can spot potential better, and the software they use often comes back matching those who don’t have a four-year degree.

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