Employers Open to Ditching Degree Requirements When Hiring

​Nine in 10 employers report being ready to accept candidates without four-year college degrees to fill positions in an increasingly tight labor market.

Companies are open to hiring candidates with a recognized certification (66 percent), a certificate (66 percent), an online degree from massive open online courses (47 percent) or a digital badge (24 percent) in lieu of a bachelor's degree, according to a survey of 600 HR leaders conducted in March by The Learning House, which provides technology for managing online degree programs, and Future Workplace, an HR advisory and research firm.

"Given the skills gap today and record-low unemployment, this makes complete sense," said Zoe Harte, senior vice president and head of HR and talent innovation at Upwork, an online marketplace for freelance talent. "Our education system is not keeping up with the needs businesses have, and what is most important today should be proof of skills and the ability to deliver results. This also helps to create a more equitable playing field for applicants and will therefore move diversity of thought and innovation forward."

The trend toward loosening hiring requirements gets nods of approval from labor market experts and job seekers. But when Dan Schawbel, a partner and research director at Future Workplace, did further research, he concluded that while employers are nearly unanimous about being open to hiring candidates without college degrees, most of them aren't doing that. "They say they're open to it, but they're not hiring those candidates," he said. "Some companies are publicly stating they will look past the four-year degree, but it's still pretty rare."

Degree Inflation Increasing

For the past several decades, the nation has operated under the principle that the surest path to labor market success is through a bachelor's degree at a four-year college or university, said Mark Schneider, vice president at the American Institutes for Research and a visiting scholar in education policy studies at the American Enterprise Institute. "If we move beyond our current fixation on the bachelor's degree and … include all the postsecondary pathways at our disposal, far more options emerge."

Some examples of companies that have embraced these other options:

• Brand-name firms like EY and PwC made announcements that they were eliminating degree requirements for some of their entry-level jobs in the U.K. in 2015 in favor of administering prehire tests and assessments.
  
• IBM is building pipelines of nontraditional talent.
  
• Technology companies like GE Digital and Intel have been seeking talent from other educational streams, such as coding programs.
  

But recent research shows that degree inflation—the rising demand for four-year college degrees for jobs that previously did not require them—overall is increasing.

According to a 2017 report from researchers at Harvard Business School, Accenture and Grads of Life, more than 6 million jobs in the U.S. are now at risk of degree inflation, hindering recruiting efforts and constraining career pathways for middle-skilled workers.

"Postings for many jobs traditionally viewed as middle-skill jobs that require employees with more than a high school diploma but less than a college degree in the United States now stipulate a college degree as a minimum education requirement, while only a third of the adult population possesses this credential," said Joseph B. Fuller, a professor of management practice at Harvard Business School and a co-author of the report.

Fuller and his fellow researchers analyzed 26 million job postings in 2015 and found that for middle-skill occupations, there were wide variances between the number of job postings requiring a college degree and the number of workers in that industry who had a degree. Some positions with the largest degree gaps were supervisors, support specialists, sales representatives, inspectors, clerks, secretaries and administrative assistants. For example, 67 percent of production supervisor job postings asked for a college degree, while only 16 percent of employed production supervisors had one.

"In some occupations such as computer support specialists and in some metropolitan areas with a relatively higher share of college graduates, more than 50 percent of jobs that traditionally required middle-skilled workers now seek graduates," Fuller said.

Practicing What They Preach

Penguin Random House removed degree requirements from its job ads years ago, said Paige McInerney, vice president of human resources. Except for specialized jobs where a degree is necessary, such as for attorneys and certified public accountants, job ads ask for a college degree or equivalent experience—or don't mention a degree at all.

"I knew that there were people successfully running large segments of our business who didn't have a degree, so requiring someone to come in entry level and saying that they had to have a degree seemed unnecessary," McInerney said. "It just didn't seem right or make any sense. People are hired at Penguin without college degrees, though the rate isn't very high as most of our applicants do still have them."

McInerney was not surprised at the findings that most companies have not loosened their hiring requirements. "Companies can say they have this policy or practice but if you don't change the process, it doesn't mean much at the end of the day," she said.

Penguin Random House is trying to deliver on its aim to broaden its applicant pool, but the majority of applicants the company attracts for its publishing jobs are college-educated. "Changing our requirements didn't drastically change our candidate pool," she said. "Our big challenge is getting the word out about jobs in publishing to people who aren't in college or don't have a college degree. Awareness about jobs in publishing often seems to be gained only within the higher education experience. But we are working to change that." 

Accepting the challenge, the company has done more outreach to find applicants outside four-year college settings—working with community colleges and community organizations—and is engaging in more resume-blind hiring, where recruiters don't review resumes at all early in the process, and instead screen candidates with skills-based questions.

IBM was motivated to search for new sources of talent—including those without bachelor's degrees—after not being able to fill critical skills gaps. "We want to bring in people with nontraditional backgrounds who built skills through coding camps, community colleges, or modern career education programs like our P-TECH model or new apprenticeship programs, and we want to attract people re-entering the workforce or relaunching their career," said Kelli Jordan, IBM's talent leader for new-collar initiatives. New-collar jobs are defined as high-skill, tech-based jobs in growing fields like data science, cloud computing and cybersecurity that don't require traditional four-year degrees.

Reportedly, about 15 percent of the people IBM hires in the U.S. don't have four-year degrees.

In June 2017, the company announced that it would be partnering with community colleges across the U.S. to better prepare more students for new-collar career opportunities.

The company also wants to create more jobs for people in parts of the country where technology jobs are scarce and to lead the way in making the industry more diverse. "We aren't replacing or devaluing the four-year college degree, but rather opening the aperture to bring in more candidates from all types of backgrounds who have learned their skills in a variety of ways," Jordan said.