American companies have a problem. Over the past decade, they have begun to demand a bachelor’s degree in hiring workers for jobs that traditionally haven’t required one. This uptick in credentialing, or “degree inflation,” rested on the belief that these college-educated employees would be smarter, more productive, and more engaged than workers without a degree. That said, the pool of college graduates is limited. Only a third of the US adult population has earned a four-year degree. The result is a misalignment between supply and demand for these kinds of jobs.
At the same time, college graduates filling these middle-skills positions (those that require more than a high school diploma but less than a college degree) such as supervisors, support specialists, technicians, sales representatives, data analysts, and production managers are costing companies more money to employ, tend to be less engaged in their jobs, have a higher turnover rate, and reach productivity levels only on par with high school graduates doing the same job.
This combination of underachievement and misalignment hurts both US competitiveness and working-class Americans seeking a career path toward a decent standard of living.
“DEGREE INFLATION IS NOT JUST HURTING INDIVIDUAL WORKERS; IT UNDERMINES AMERICAN COMPETITIVENESS”
How did this happen? During the Great Recession of 2006-2008, unemployed college graduates were willing to take jobs for which they were clearly overqualified. Baristas with bachelor’s degrees became the popular image, creating the impression that degree inflation was the result of excess supply, a weak job market, and overly opportunistic human resource departments. To upgrade the quality of the workforce, why not get a college grad for a middle-skill position?
After examining more than 26 million job postings and surveying 600 business and human resource executives, however, as part of a research project between Accenture, Grads of Life, and Harvard Business School, we concluded that this explanation was incorrect. Instead, we found that employers were increasingly inflating the educational requirements for jobs usually held by high school grads. We also found that automated hiring tools excluded applicants with relevant experience simply because they lacked a college degree. In many cases, qualified candidates never even got the chance to apply for a position.
In a typical middle skills job title such as production worker supervisor, we found that 67 percent of the job postings required a bachelor’s degree or higher; yet just 16 percent of workers already in that position held such a degree. That sort of disconnect leaves many jobs unfilled, despite the fact that degreeless middle-skill workers with relevant experience may be available. Taking a broader view, we believe as many as 6.2 million workers could be affected by the practice of degree inflation.
It is time for employers to consider alternatives. If they believe that applicants without a college degree are somehow lacking, they should consider investing in talent development pipelines that employ work-based-learning opportunities, co-op programs or paid apprenticeships. Companies, educators, and policymakers need to work together to bring about a systemic shift in the way middle-skills workers are prepared to enter the workforce by encouraging adoption of such approaches.
Lifepoint Health, a $6 billion company with 72 hospitals in 22 states and 46,000 employees, has started to view its hiring practices through a new lens. The company grew significantly by acquiring hospital systems around the country and found there was a wide disparity in job descriptions among various facilities. One hospital would post a job requiring a four-year college degree, while another would advertise the same job without it. Since the degree requirement hampered hiring efforts, particularly in rural communities, Lifepoint launched an organization-wide effort to address the problem by systematically reviewing all job descriptions to identify the specific skills associated with each position.
Does this job really require a college degree, its HR team asked, or can we provide the training ourselves to develop the necessary skills? Job descriptions were then updated to reflect needs and skills to attract competent candidates, regardless of educational status. A number of other organizations such as Hasbro, CVS Health, and State Street have adopted similar approaches, recognizing the need to return to fundamentals and invest in grooming talent.
In today’s economy, we cannot afford to let the lack of a college degree become a barrier to entering the workforce or seeking their careers. Competency is more important than credentials. Degree inflation is not just hurting individual workers; it undermines American competitiveness. American companies can’t let that happen.
