Want The Best Talent? Prioritize Skills Over Credentials
The "paper ceiling" is keeping the best job candidates out of the talent pool at a time when CEOs need them most.
For years now, there has been a lot of discourse around the real value of a college degree. A few decades ago, conventional wisdom told us that a four-year degree would just about guarantee someone a well-paying job in their field of study. And for a while, that was true for many. Undergraduate degrees opened many doors and graduate degrees opened even more. But more and more jobs include degree requirements that screen out skilled applicants and widening the opportunity gap. We’ve reached a point where a college degree has become a minimum requirement for many jobs. With the rising cost of education and the growing availability of independent learning resources, degree requirements are becoming a detriment to both employers and job seekers.
I recently posted an article to LinkedIn that examines why some of the largest and most well-known companies in the U.S. are moving to a skills-focused hiring model. The piece positions skills-based hiring as a potential solution to the labor shortage, and as a way for companies to close existing skills gaps. The high level of engagement and number of impressions the post received surprised me. People are passionate about this topic and they have strong opinions on it.
I think it’s important to clarify that education and advanced certifications are important and should hold value in the workplace. But they are most relevant when they directly correlate to a candidate’s ability to do the work required of them. There are better ways, such as skills assessments, to gauge candidates’ aptitude rather than relying on paper credentials. After all, degrees and certifications are only one part of the hiring equation. And I hope most would agree that, at the end of the day, the best person for a job is the person who can do the job best.
The Consequences of Degree Requirements
For a long time, certain skills and topics were only taught in a university setting or through specialized training programs. But for most of the last 100 years, most people could find gainful employment without degrees and certifications.
Fast-forward to 2022 and most entry-level jobs require at least a four-year degree. And many jobs that previously only had a degree requirement now require other advanced certifications. Between 1980 and 2015, occupations requiring a higher level of job preparation grew by 68 percent whereas occupations requiring less preparation increased by only 31 percent.
Using a four-year degree as a proxy for employability shuts out the most economically vulnerable job seekers. The focus on degrees creates exclusionary conditions that contribute to a lack of upward mobility. The impact is most severe on already marginalized communities, especially Black and Latino workers along with rural workers and veterans. Screening by college degree eliminates 76 percent of Black adults and 83 percent of Latino adults from the available talent pool. People from marginalized communities often lack the resources needed to “buy into” the fields they would like to pursue, even though they are entirely capable of learning the necessary skills.
Degree requirements and credentialism also create a double barrier for people impacted by incarceration. As they navigate the already heavy social stigma that comes with their criminal convictions, mandatory credentials only serve to close them off from more opportunities. (As a side note, employers can benefit from hiring second-chance workers with The Work Opportunity Tax Credit (WOTC), a federal tax credit for hiring individuals who have consistently faced significant barriers to employment. Many people who are incarcerated already have or can build valuable skills, and most are eager to turn their lives around after they are released from prison.)
A Mismatch with Reality
These barriers don’t just impact job seekers, they impact the economy. Low levels of college education among racial and ethnic minorities and low-income Americans cost the U.S. economy nearly $1 trillion a year in forgone earnings, consumer spending, and tax revenue combined with potential savings on social services.
A recent report by Cengage Group shows that 62% of all employers surveyed believe a degree is necessary for their candidates. However, fewer than 50% of all adults in the U.S. have a bachelor’s degree and many have the skills to do the required work via other credentials such as online learning, prior work experience, or other training.
Back in September, the Ad Council and Opportunity@Work, along with nearly 50 national organizations and companies launched Tear the Paper Ceiling. The “paper ceiling” describes the many factors working against those without college degrees who are seeking employment in skilled professions. The campaign asks decision-makers to remove the barriers blocking more than 50% of workers in the U.S. from accessing upward mobility through skilled jobs.
Initiatives like Tear the Paper Ceiling are important because many available jobs that require a degree or advanced certification today previously did not. The people currently working in these roles don’t have degrees, but as they retire or resign, their replacements will be expected to. This leads to “degree inflation” and it’s created a system where companies are struggling to fill open roles while experienced, willing workers are left out in the cold.
Tearing the Paper Ceiling
More and more companies are seeing the benefits of skills-focused hiring as it continues to grow in popularity. General Motors, Google, EY, Microsoft and Apple, among others, have removed degree requirements for many roles.
Skills-based hiring enables more informed hiring decisions while allowing companies to consider less “traditional” candidates. A bartender without a degree, for example, can likely translate their customer service skills to a call center environment. Ultimately, adopting skills-based hiring practices allows companies to achieve several goals. Screening for relevant skills helps lower recruiting costs by ensuring hiring managers bring on the right new employee the first time around. It also enables companies to close skills gaps, increase productivity and improve retention by bringing in employees who are equipped to perform well.
Creating skills-based pathways for career advancement is also important and helps make companies more resilient in a recession. Instead of leaning on an MBA or other advanced degree requirement, employers can assess the specific skills required for management and leadership roles. From there, employers can identify skills gaps between lower-level and higher-level positions and develop training and transition plans to help employees move up internally. This skills-first approach to internal mobility creates a more equitable environment for everyone.
The company I lead has fully solidified my position on the value of skills over paper credentials. Most of our workforce are incarcerated women—many of whom entered prison without a high school diploma. Despite lacking any advanced degrees or certifications, each of these women has become a highly skilled and capable sales and marketing professionals. They support multibillion-dollar companies across various industries, and many have gone on to be hired by our clients and partners after they’re released from prison.
These women are proof that excellent training, real-world experience and eagerness to learn are more important determiners of success in a role than a degree or certificate.
Business leaders have an incredible opportunity to improve conditions for employees, their companies and our economy. But we must first stop clinging to the notion that degrees are the best benchmark for talent.
Chris McGugan is the CEO of Televerde, the preferred global revenue creation partner supporting marketing, sales, and customer success for B2B businesses around the world. Seven of Televerde's 10 engagement centers are staffed by incarcerated women, representing 70 percent of the company's 600+ global workforce.
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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