In just about every job, workers' skills are more important than where they went to college-or, as is increasingly the case, whether they went to college at all.
A tight labor market in which the number of open jobs exceeded that of workers looking to fill them led more and more employers, including Fortune 500 companies like Google, IBM, and Apple, to eschew long-standing degree requirements for applicants. And the wide availability of remote work during the pandemic has opened the floodgates for skills-based jobs.
In November 2022, 41% of U.S.-based job postings required at least a bachelor's degree, according to a new analysis by think tank Burning Glass Institute reported by the Wall Street Journal. That's a drop from 46% in early 2019. Both applicants and companies are reaping the benefits of the change.
Prioritizing skills over degrees can be a boon for companies struggling to attract or retain talent, especially when workers can feasibly learn skills on the job. That's on top of the fact that removing degree requirements vastly widens the candidate pool-especially for workers in underrepresented groups.
Consider General Motors, which removed degree requirements from many job listings. Telva McGruder, its chief diversity, equity, and inclusion officer, told Fortune's Phil Wahba degrees aren't "necessarily the be-all, end-all indicator of someone's potential."
In 2016, IBM coined the term "new collar jobs" for roles that require specific skills rather than specific education. The percentage of job openings at the tech giant requiring a four-year degree dropped from 95% in 2011 to less than half in January 2021. Ginni Rometty, who was CEO when the term was coined, told Fortune CEO Alan Murray that hires without college degrees performed just as well as Ph.D. holders from top universities.
"College degrees are out of reach for many Americans, and you shouldn't need a college diploma to have economic security," Google's president of global affairs, Kent Walker, wrote about Google's career certificates in July 2020. "We need new, accessible job-training solutions-from enhanced vocational programs to online education-to help America recover and rebuild."
Skills over degrees is good business
Prioritizing workers who can do the job-regardless of pedigree-isn't just open-minded: It's good business. So says LinkedIn CEO Ryan Roslansky, who told the Harvard Business Review that a "skills-first mentality" represents the adaptive leadership bosses need right now.
Offering more opportunities to larger talent pools can be a saving grace during a tight labor market, he explained, pointing to the thousands of food service workers laid off early in the pandemic. The average food service worker had 70% of the skills they needed to be an entry-level customer service agent, the most in-demand role at the time. But most remained unemployed, he said, while customer service jobs went unfilled.
"If we had just taken a view on what are the skills necessary; who has those skills; how can we help them acquire a couple of skills to help them become employed; we would have found ourselves in a much more efficient labor market," Roslansky said.
To be sure, going to college remains a strong business decision, even amid the crushing student loan debt saddling millions of attendees. According to the Social Security Administration, men with bachelor's degrees earn approximately $900,000 more than high school graduates over a lifetime; women with bachelor's degrees earn $630,000 more. For men with graduate degrees, that figure jumps to $1.5 million more in median lifetime earnings than high school graduates-and to $1.1 million more for women with graduate degrees.
Those are profound gaps to bridge, even with the sharpest skills.
This story was originally featured on Fortune.com
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