Skip to main content
Blog

Skills-based hiring is on the rise

By June 27, 2022No Comments

Across a wide range of roles, employers are beginning to prioritize job candidates’ skills and prior work experiences over their scholastic diplomas, according to a recent report authored by professors at Harvard Business School and published by the Burning Glass Institute.

Analyzing data from 51 million job postings between 2017 and 2020, the Emerging Degree Reset report reveals a sharp decline in the number of employers requesting college diplomas when hiring—opening up a wealth of new opportunities for the two-thirds of Americans who do not have a college education.

Based on current trends, the report projects that an additional 1.4 million jobs could open to workers without college degrees over the next five years, suggesting a reversal of the “degree inflation” phenomenon that has taken root in the United States over the past two decades.

What is degree inflation?

Starting in the early 2000s, employers increasingly began to add four-year college degree requirements to job descriptions that did not previously require degrees—even though the jobs themselves did not require college-level skills. Known as “degree inflation,” the trend precludes millions of workers from employment in primarily “middle-skill” jobs that in past generations did not require a degree.

“In other words, the people currently doing the work don’t have degrees, but as they retire or leave their positions, their replacements will be expected to,” journalist Kate Morgan wrote for the BBC.

For example, a 2018 study from Harvard Business Review found that only 16% of supervisors of production workers currently hold a college degree. However, 67% of job postings for these positions require bachelor’s degrees. This creates a “degree gap” of 51%.

The consequences of degree inflation

Requiring four-year degrees for roles that can be fulfilled without a college education has consequences for employers and employees alike.

“Some time ago, we moved to this system of college credentials being required for jobs that simply don’t need college degrees,” wrote Harvard Business School Professor, Boris Groysberg, in a technical note published in February 2022.  “The bars were set too high—artificially high—and both companies and workers have paid the price as a result.”

The most obvious consequence is the exclusion of qualified workers from employment opportunities—specifically workers of Color, a demographic who, because of historical inequities, have college graduation rates far below the national average. When compared to white and Asian workers, college-degree requirements clearly and disproportionately penalize Black and Hispanic workers.

Employers, too, are negatively impacted by degree inflation. The authors of a 2018 study by Harvard Business School found that job openings with a bachelor’s degree requirement take longer for employers to fill than equivalent job openings without degree requirements.

Moreover, college-educated employees who are “over-educated” for their roles tend to leave their jobs at a faster rate than those without, creating elevated turnover rates for the organizations that hire them.

Change on the horizon?

Demand for job recruits to have college degrees dropped for 46% of middle-skill positions and 31% of high-skill positions between 2017 and 2019, according to the report, signaling that employers are becoming more willing to consider workers’ specific job skills and prior experiences over their formal education.

As COVID-19 spread worldwide in 2020, job vacancies soared. In order to fill positions, employers in fields from medical to legal dropped diploma requirements in hopes of widening their applicant pools.

Notably, the report specifies that 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 potentially permanent shift in hiring practices.

The benefits of these structural resets are plenty, according to the report’s authors. When employers drop degree requirements, they deepen their hiring pools and are compelled to become more specific about the skills and capabilities that they are looking for in job candidates.

“As such, the degree reset does not seem to reflect any diminution in the complexity of work; quite the contrary, jobs that undergo a degree reset are more likely to specify high-level skills,” the report’s authors write.

Doing away with degree requirements will also compel employers to develop new, creative ways of testing the capabilities of applicants, like job auditions, take-home tests, and apprenticeship programs, instead of operating on the false assumption that the existence of a degree equates to job competency.

“More employers need to set aside dated assumptions and revisit their use of such blunt instruments to assess the worthiness of willing applicants from a shrinking labor force,” the report’s authors write. “That would mark an important next step in helping the previously overlooked to pursue attractive career pathways – even without a four-year degree.”


ABOUT THE AUTHOR

Lia Tabackman is a freelance journalist, copywriter, and social media strategist based in Richmond, Virginia. Her writing has appeared in the Washington Post, CBS 6 News, the Los Angeles Times, and Arlington Magazine, among others. She writes weekly nonprofit-specific content for 501c.com.

(Image by DomenicBlair from Pixabay.)

501c Services newsletter sign up - popup graphic envelope letter

Keep up with
the news

Subscribe to our monthly newsletter for timely updates, news, and events.

close-link