As companies enter a fierce war for talent, they have one simple tactic at their disposal that could help unlock vast pools of potential talent: eliminate the degree requirement for open jobs.
In the years prior to the pandemic, blue-chip companies like Apple, Google, IBM, and Bank of America turned heads with announcements that they would no longer require applicants for certain jobs to hold a degree, including for such posts as senior manager of finance.
But a few years after their announcements, these companies are mainly still notable for being the exceptions to the rule in a sea of employer degree requirements that have held back students, society, and the companies themselves. Despite the headlines, the college-degree stranglehold had actually been growing in recent years.
Degree inflation is the practice of requiring college degrees for positions that formerly didn’t require them. According to research from the Harvard Business School, 6.2 million workers were at risk thanks to degree inflation, “meaning their lack of a bachelor’s degree could preclude them from qualifying for the same job with another employer.”
The practice comes with significant costs, according to that same study. College graduates who fill roles that formerly didn’t require a degree earn higher salaries, leave their jobs more often, are less engaged, and don’t produce more than employees in the same role who lack a degree. Yet many employers use college degrees as a screen to help them sort through voluminous numbers of job applications, even when the credential doesn’t relate to how an individual performs in the job.
The power of the degree made some sense in years past. When hiring, employers look for signals of ability, experience, character, and personality fit. For people without experience, employers default to reading the signals their educational credentials provide. If someone doesn’t have a college degree, society has assumed that prospective employee to be of lesser quality than someone who does.
Years ago, when colleges were the only place to learn higher-level knowledge, develop corresponding critical-thinking skills, and join powerful social networks, this arrangement had sufficiently few false negatives. In other words, few hyper-talented people chose not to go to college.
But universities no longer have a monopoly on providing access to knowledge, skills, and a network. The Internet, online learning, and social media have changed that.
Indeed, forward-thinking companies aren’t just waiving degree requirements, but they are leaning into providing education and training themselves to recruit and upskill promising talent.
Some hiring managers, however, haven’t just failed to keep up but have gone backward, which is hurting their companies—and their employees.
In research over the last several years, a team of researchers and I collected and analyzed more than 200 personal stories and conducted surveys of more than 1,500 students who have chosen different paths for higher education to understand what was causing them to enroll. What we discovered was that a significant group of students enrolls to simply do what’s expected of them.
This group of students has little intrinsic motivation or energy for going to school to get a degree. They are completely apathetic about their choice.
They are enrolling because it’s the next logical step in their lives that someone else—a family member, their employer, or their peers in society—expects them to do. It’s that expectation that drives them to make a decision that, in many cases, results in a subpar outcome. According to our research, 54% of students were dissatisfied with their schooling experience, and a whopping 74% transferred or dropped out.
Employers are playing a starring role in creating and shaping those expectations.
Many students we talked to in our research who were employed currently but didn’t have a degree were attending school part-time. Why? Because they felt their employer expected them to go back to college, even though there was no obvious or compelling reason to attend. In other words, the skills they were learning in the degree program were irrelevant to what they would be doing at work, and often the only reason they had enrolled was because the employer would foot the bill through a tuition reimbursement program, for example.
But increasingly, there are solutions to this problem. Some employers are working to focus on the competencies—the knowledge, skills, and dispositions—employees must have to succeed and grow as opposed to their credentials.
Pre-hire assessments that measure specific competencies and aptitudes are growing, according to a study by Ithaka S+R. Organizations like the Institute of Management Accountants are offering certifications, such as the Certified Management Accountant program, to focus on the actual competencies that a modern-day financial professional needs, including in areas of technology, data analytics, ethics, and decision-making. And companies like Walmart and IBM are focusing their education and training on the needed skills and competencies of their present and future workforce.
To bolster the success of individuals who need education, we need to unleash their intrinsic motivation, not force them into a subpar choice. That means helping individuals broaden their set of desirable choices so they can find the right fit for them, not limiting their choices by requiring specific, sometimes outdated credentials like a college degree.
It’s time for employers to play a starring role in that movement.
