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Employers Pulling Back From College Degrees and Toward Skills-Based Hiring

February 9, 2022 by Emsi Burning Glass

When companies are looking for new talent, a college degree is often a starting point—but it doesn’t need to be. 

A new report from The Burning Glass Institute has found that many employers have begun a “degree reset” for a wide range of jobs, requesting specific skills instead of relying on a college education. 

“Jobs do not require four-year college degrees,” the report’s authors write. “Employers do.”

  • By analyzing over 51 million job postings using Emsi Burning Glass data dating back to 2014, the report found a significant decrease in employers’ demand for a bachelor’s or post-graduate degree. 
  • Between 2017 and 2019, close to 46% of middle-skill and 37% of high-skill occupations experienced a reset in their education requirements. 
  • Often, postings for those jobs now list hard (technical) and soft (social) skills in place of a bachelor’s degree, a process referred to as “downcredentialing.”
  • This trend indicates more opportunities for more workers—the next five years could see 1.4 million jobs open up to those without college degrees, creating a path toward upward mobility.

The degree reset reverses a pattern established after the Great Recession, when more employers could afford to raise the bar and require more education, even for roles that traditionally did not require a bachelor’s degree. This suggests employers had previously used degrees as a stand-in screening system for the soft skills needed in their employees.

Past The Pandemic

Much of the tension in the current market is attributed to the global disruption of Covid-19, but the data show that the trend was already underway before March 2020. The authors of the report found that only 27% of the postings that dropped requirements could be considered part of a “cyclical reset,” where the shift appeared to be a direct response to the coronavirus and may reverse when conditions change. 

More significantly, 63% of the affected jobs were adjusted between 2017 and 2019, before 

Covid had caused any impact. This suggests a more fundamental and lasting change that will likely endure after the end of the pandemic, and could also cause some of the cyclical changes to become permanent. 

A Competitive Edge

In the current tight labor market, demand for workers far exceeds the supply. By requiring a bachelor’s degree, employers immediately disqualify the 64% of working-age Americans who do not have one. Over the past several years, many companies have found this unsustainable.

For example, IBM announced in 2021 that it had removed the degree requirement for over half of its US job postings. Many employers have done likewise, and so has the government: the White House said in June 2020 and January 2021 it would pursue a skills-based approach and limit educational requirements for certain employees.

This could also help reduce inequity in the workforce, as argued in a previous paper from The Burning Glass Institute, because those from Black, Latino, and other underrepresented communities are far less likely to have bachelor’s degrees than their white and Asian peers—and earn less over the course of their careers as a result. The degree reset could change that.

The shift is mutually beneficial for employers and workers. Companies are in a fierce competition for talent that shows no signs of opening up soon; employers who hire based on skills rather than degree gain a competitive advantage because they have access to thousands more potential employees than employers who do not. Workers, by the same token, have greater access to well-paying careers. 

This reset indicates major implications for how companies find talent, changing the hiring market for countless employers and millions of workers in the coming years. The full report, “The Emerging Degree Reset,” is available from The Burning Glass Institute here.

 

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