With the deadline for college enrollment upon us, millions of high school seniors, and their parents, are grappling with the gamble of a four-year degree. College is a life-altering investment and consequential financial commitment. And they’re making it at a time when many companies are dropping long-standing requirements for a bachelor’s degree from job descriptions.
This can ring alarm bells for anyone who would pay, on average, $125,000 for a four-year degree. Before we panic, let’s ask the following:
- Are companies really hiring more non-graduates?
- What does that mean for students who invest in a college education?
- How do we ensure that investment will pay off in a rapidly changing job market?
The skills-based hiring movement is here
A recent study from Intelligent.com found that 45% of companies plan to eliminate degree requirements for certain positions in 2024. Many have already done so. The number of jobs requiring a bachelor’s degree fell to 44% in 2022, down from 51% in 2017.
In dropping these requirements, companies are shifting the focus to skills-based assessments—paying less attention to accolades and more to demonstrated skills.
This skills-based hiring shift is a response to a collision of cultural moments. When companies returned to hiring, post-pandemic, they struggled to find the talent they needed. Then the once insidious AI became explosive—eliminating certain jobs and reshaping others. Meanwhile, enrollment has been dropping in colleges and universities across the country for years; in the last decade, the percentage of young adults who think college is “very important” dropped a staggering 74% to 41%.
Gone are the days when a diploma was a sure thing; employers no longer trust that college graduates will arrive with the skills they need to get the job done. (They’re even questioning the value of Ivy League degrees, which once guaranteed a resume would land on top of the pile.) By casting a larger net, companies hope to find promising applicants who were once disqualified for not having a bachelor’s degree.
As it turns out, the skills-based hiring movement is more talk than action. Harvard Business School and The Burning Glass Institute recently studied 11,300 roles for which a bachelor’s degree requirement was removed from the job description. Of those, only 3.5 percent were filled by non-degree-holding candidates. That’s a barely perceptible uptick when applied to the broader workforce.
College graduates are still more likely to get hired. But what happens when they do?
The bigger issue: A growing skills gap
The Boston Globe reported last week that only 46% of New England adults believe college is worth the expense. The article highlights how college is riskier today than ever before, due to rising tuition costs and higher education’s lagging ability to prepare students for a tumultuous job market.
They aren’t wrong: the value of higher education has waned. As a former college president and current scholar at Harvard University, I don’t say this lightly: Students and their parents are right to be concerned. But not because companies are hiring non-degree holders over college graduates. They should be worried, instead, about whether or not their college education will properly prepare them for the future of work.
Albeit slow-moving, the skills-based hiring movement is reflective of bigger issues. Higher education is failing to keep up with broadening globalization and a rapidly evolving technological landscape. There’s a gap between what companies need and what recent college graduates bring to the table. Companies, in turn, are investing more in on-the-job training and hiring from the gig economy, where many workers are continuously educating themselves.
Leading companies are now spending up to 1.5% of their annual budgets on education and training for current employees. Amazon is one of them: In 2019, a $700 million initiative was launched to retrain 100,000 workers, about a third of its workforce.
While AI is often positioned as the job villain, it’s also playing a major role in helping employers train their staff—to meet the new demands of the AI landscape. Accenture recently invested $1 billion to launch LearnVantage, an AI-powered tech education platform that builds personalized learning paths for employees to gain new skills, like data analysis and AI. Companies that do invest in AI training are also adding more jobs.
Higher education must fill the gap—but students can, too.
If companies are re-educating on the job, instead of relying on colleges and universities to teach those skills to each new class of job seekers, why bother with college?
This question keeps me up at night. It’s why I wrote The College Devaluation Crisis: Market Disruption, Diminishing ROI, and an Alternative Future of Learning, to urge educators and administrators to act quickly and overhaul their curricula—and to do so continuously—so that college graduates are better prepared for today’s job market. But high school seniors don’t have time for higher education to get it together. Yet, there is still great value to be found on college campuses. Broad exposure to the liberal arts and development of analytical and critical thinking skills are invaluable and unique to the college experience. This focused time of growth prepares students to become not only professionals but thoughtfully engaged members of society.
College is still worth it—if students are willing to take the reigns and go after the skills they need for the jobs they want. Today’s students can’t just show up to class and trust that earning a diploma will also earn them a job. They’ve got to be savvy and intentional about where and what they study and how they supplement classroom time with real-world training. Making a college education worthwhile is a lot of work. So before deciding where to do all that work, students should:
- Pick a school that’s innovative. Students should consider whether a school is adapting and building curriculum and practical channels to fill the skills gap in the job market.
- Focus on work opportunities. Internships and work-study experience are crucial, as workplaces are changing much faster than classrooms. Look for programs that get students on the floor as much as possible.
- Look at where upskilling corporations are recruiting. Which companies are investing in their employees’ ongoing education and which schools are those companies hiring from?
- Consider supplementing. It’s understandable to expect an expensive college education to cover all the skills you’ll need for your first job, but students today can often benefit from additional training. Platforms like Handshake, Guild, and Grow with Google (I present case studies of all three and others in my book) are more nimble in their offerings than historic institutions, and they focus on evolving technological skills. It’s typically not realistic to add more work to a full college course load, so students should use the time they do have wisely—like gap years and summer vacations. Once they’re job hunting, they can look for opportunities to continue adding value to their resume.
I fervently believe that a college education is still worth it. But, new data shows that college, alone, isn’t enough. If you’re going to invest in higher education, you must also resolve to squeeze as much value from those years as possible—and then some. Much of that value will be found in the classroom, but even more can be found off-campus, online, and within each student’s commitment to their unique professional path.