Focusing on skills can also be a way to keep
people within an organization, not just hire
them, according to Jon Lester, the vice president
of HR technology, data, and AI at IBM.
He told BI that nearly a decade ago, the average
IBMer spent 31 hours a year learning new skills.
By 2023, that was up to 87 hours. All of this
learning, Lester said, assists with retention. It
also sits at the heart of how IBM compensates
its employees, he said.
"People get salary increases mostly because of
the skills they've learned," Lester said.
". . .learning new skills. . ." Presumably a reference to badges. If so, acquiring badges does not equate to learning new skills.
https://www.businessinsider.com/employers-dropping-degree-requirements-slow-to-hire-for-skills-2024-10
By: Tim Paradis
Oct 20, 2024, 9:48 AM CDT
• Some employers are waiving degree requirements, yet it's not leading to widespread hiring.
• Employers might not ask if you have a degree, but many still care.
• Hiring for skills, not pedigree, could help millions of US workers shut out of certain roles.
When a job posting states that the role doesn't require a degree, Ranji McMillan starts to worry.
More than likely, she said, the job will be in sales or involve work that's not a good match for her experience.
"If someone says that they're not looking for a degree, you have to look at what they want you to do because it just seems like they're going to give you cr-p work," McMillan told Business Insider.
McMillan is 42 and lives in the Northridge section of Los Angeles. She's been looking for work for more than a year and a half. McMillan has an associate degree but not a bachelor's. Yet, she has more than a decade of experience managing the merchandise used in photo shoots for big-name retailers.
When she looks at job listings, she estimates that she runs into a formal degree requirement most of the time.
McMillan is one of millions of US workers bumping up against what's sometimes called the paper ceiling. It's happening even as more employers are setting aside requirements that applicants for some jobs have bachelor's degrees. The goal is often framed around wanting to hire for skills, not pedigree, yet many bosses have been slow to take the next step: actually bringing on workers who don't hold four-year degrees.
David Deming, a professor of political economy at Harvard's Kennedy School, told BI that while some employers might no longer require a bachelor's degree for certain roles, those doing the hiring still might care whether an applicant has one.
"Firms are wanting credit for removing a requirement, but that doesn't necessarily mean they're changing their hiring at the end of the day," he said.
Deming said many employers look upon a worker with a four-year degree as an investment — one that can be molded into what the firm wants.
Hiring based on skills
The Burning Glass Institute, a nonprofit that examines the future of work and learning, and Harvard Business School found in a study released in early 2024 that even when employers hire people without four-year degrees for roles that once required them, it doesn't occur in large numbers.
Hiring for skills or experience rather than for formal education accounted for just one in 700 hires in 2023, the study found.
The researchers examined more than 11,000 roles at large firms and compared hiring at least a year before and after the employer ditched a degree requirement. The study reviewed changes in roles from 2014 to 2023.
Reluctance by some employers to bring on workers without four-year degrees matters because only about 36% of people 25 and older in the US had a bachelor's degree or higher in 2023, according to the Census Bureau.
In part, that's because the high cost of tuition can be a major barrier.
A boost for employers
Adding workers based on their abilities rather than what's on their résumé can be a win for business. The consulting firm McKinsey & Company, citing research, notes that hiring for skills is "five times more predictive" of how someone performs on a job than hiring based on educational attainment and more than twice as predictive than hiring based on a person's work history.
Boston Consulting Group research found that those hired based on their skills tend to get promoted at about the same pace as traditional hires yet stay with an employer for 9% longer.
Still, Mona Mourshed, the founding CEO of Generation, a nonprofit network focused on economic mobility, told BI that while many notable and large organizations support skills-first hiring, "the vast majority of employers are not there yet in terms of their practice."
She said Generation recently completed nearly 100 interviews with large and midsize employers around the world, including in the US, asking what goes into their hiring decisions. Much of it, she said, comes down to hiring managers wanting to limit risk. Often, it's easiest to go with a résumé that looks similar to what previous hires have had, Mourshed said.
"Employers will only hire a different profile when they are desperate for talent," she said.
Mourshed said that even for organizations that might be open to looking first at skills, cuts to HR departments in recent years have stretched some recruiting teams. That means there could be fewer people to take a second look at someone who doesn't hold the typical academic qualifications, she said.
The 'easiest and laziest filter'
Chris Hyams, CEO of Indeed, told BI that for many jobs, employers simply default to the degree.
"What people are looking for, because it's the easiest and laziest filter, is a four-year degree from a 'good school,'" he said.
But that's often short-sighted, Hyams said. He pointed to the plight of his brother-in-law, whom Hyams described as "a brilliant guy" who didn't finish college. Instead, he built and ran a music studio before becoming a Salesforce administrator, Hyams said. Yet, he has had a difficult time finding work after losing his job about a year and a half ago.
"He's been the finalist for five different positions where they said, 'You're actually the best candidate we interviewed, but we require a four-year degree,'" Hyams said. "It's the d-mbest thing."
According to BCG, there are 70 million workers in America who are so-called STARs — skilled through alternative routes.
Workers will need more training
In the coming years, many workers will need more, not less, learning to do their jobs. The US Department of Education forecasts that by 2027, 70% of jobs will require schooling or training beyond high school.
Often, that might mean a four-year degree. Researchers at the Georgetown University Center on Education and the Workforce estimate that 42% of jobs in 2031 will require candidates to have at least a bachelor's degree, while 28% of jobs will need someone to have a high school diploma or less.
Bethlam Forsa, CEO of Savvas Learning Company, which produces instructional materials for kindergarten through high school students, told BI that there's often a gap between the "job-ready" skills students possess and what employers seek. She said research has shown that students who don't want to attend college are often not told about alternative paths like internships or career and technical education programs.
"We have a system that's primarily college-bound," Forsa said.
She also said employers might need to adapt their evaluation methods to better assess what job seekers can do. Employers could, for example, look to any certifications an applicant might have earned as a way to hire for skills, not a college degree, Forsa said.
The research firm Gartner reported in July that 74% of HR leaders it surveyed believe that most employers are shifting the focus of how they manage talent to skills. Yet only about four in 10 surveyed reported that their organizations had implemented processes that would enable this to play out.
Focusing on skills can also be a way to keep people within an organization, not just hire them, according to Jon Lester, the vice president of HR technology, data, and AI at IBM.
He told BI that nearly a decade ago, the average IBMer spent 31 hours a year learning new skills. By 2023, that was up to 87 hours. All of this learning, Lester said, assists with retention. It also sits at the heart of how IBM compensates its employees, he said.
"People get salary increases mostly because of the skills they've learned," Lester said.
Research supports that thinking. According to McKinsey, skills learned at work contribute 46% of the average person's lifetime earnings.
For her part, as McMillan continues to search for a job, she often breaks down in tears — sometimes several times a week.
She said she's been filling out surveys and doing whatever else she can to earn a few extra dollars. Last month, a friend gave her a $50 grocery store gift card to help her get by.
When McMillan looks at job listings and contemplates whether a degree is necessary, she said she thinks that even if she had a bachelor's, it would have "dust on it by now."
"I definitely would have had to evolve by now if I did get that 20 years ago," she said.