Rarely is there an opportunity for a simple policy change to create a “win-win-win” by benefiting multiple stakeholder groups at the same time. Yet, advocates say this is the case with “skills-based hiring,” which focuses on the actual skills and qualifications someone brings to the job instead of just the degree they’ve earned.
For job seekers, this practice can open up many more possible career paths and make it easier to find work or change careers. For the companies that adopt this approach, it expands the pool of eligible candidates they can choose from, which can alleviate hiring challenges.
This excerpt comes from the current issue of the Community College Journal, the bimonthly magazine of the American Association of Community Colleges.
And for community colleges — which have been laboring for decades to overcome assumptions that an associate degree or certificate is inherently inferior to a four-year degree — skills-based hiring could encourage employers to assign more value to the credentials they offer.
For years, labor experts say, many companies have engaged in “degree inflation” by requiring at least a bachelor’s degree for jobs that community college graduates should be qualified for.
“Too often, the paper ceiling limits our students and prevents employers from assessing candidates’ hands-on experience and ability to hone skills on the job,” says Steve Partridge, vice president of strategy, research and workforce innovation at Northern Virginia Community College (NOVA).
There is evidence to suggest this trend may be reversing. Spurred on in part by the labor shortages caused the pandemic, a growing number of employers are eliminating their degree requirements in favor of a skills-based approach to hiring. This practice has gotten a significant boost in recent months from organizations such as the Business Roundtable and Opportunity@Work, a D.C.-based nonprofit that advances economic mobility.
Community colleges and their students stand to benefit from these changes. What’s more, the messaging and strategies being used in these campaigns could help community college leaders effectively communicate the value of their programs and graduates to local employers. That’s good news, because there is still a lot of work to be done in this area.
Recalibrating job requirements
Harvard Business School and Lightcast (formerly Emsi Burning Glass), a leading authority on job skills and labor market dynamics, analyzed more than 51 million job postings from 2017 to 2021 and found that employers are resetting their degree requirements for a wide range of job functions, dropping the requirement for a bachelor’s degree in many middle-skill and even some higher-skill roles.
“This reverses a trend toward degree inflation in job postings going back to the Great Recession,” the Burning Glass Institute wrote in a report on this research, called “The Emerging Degree Reset.” “And while the Covid-19 pandemic accelerated this process, this reset began before the crisis and is likely to continue after it.”
Employers have dropped their requirements for a bachelor’s degree for some 46% of middle-skill jobs and 31% of high-skill jobs since 2017, the report says. This shift has occurred to some degree in nearly two-thirds of occupations, with the biggest declines in careers such as finance, business management, engineering and healthcare.
For example, IBM announced in 2021 that it had stripped bachelor’s degree requirements from more than half of its U.S. job postings and will continue to rethink the usefulness of degree requirements in the future.
Google has also retooled its practices to focus more on skills-based hiring.
“For almost every role at Google, a four-year degree is not required,” says Amanda Brophy, director of the Grow with Google initiative. “We know that anyone can qualify for in-demand jobs if they have the right training, regardless of their education level. Our focus is on demonstrated skills, and this can come through degrees or through relevant experience, such as Google Career Certificates.”
These certificates are industry-recognized credentials that help job seekers demonstrate job readiness, Brophy says — and many people have completed them to switch careers or upskill. In addition, Google has built a consortium of more than 150 employers — including Walmart and Verizon — that recognizes these certificates in their hiring process.
The Burning Glass report notes that shifting to skills-based hiring can help grow the workforce at a time of severe talent shortage.
“In 2021-22, the U.S. economy experienced the most severe talent shortage in recent decades,” says Gad Levanon, chief economist for the Burning Glass Institute. “One of the most frequently used measures of shortage is the ratio of job openings to unemployed workers. There is usually less than one job opening per unemployed person. In recent months, it almost reached a 2-to-1 ratio.”