Employers are loosening degree requirements. But will it last?

New York—Businesses across almost every industry are struggling to find enough workers. And there’s been plenty of anecdotal evidence that they’re pulling out all the stops to attract people: boosting wages and benefits, paying people to show up for interviews, and loosening minimum qualifications for many jobs—including requirements for college degrees.

That coincides with a growing push among equity-minded businesses and advocates to rethink using the degree as the primary proxy for career skills. More than 80 major employers that are part of Business Roundtable—such as Bank of America, United Airlines, and Lockheed Martin—launched an initiative late last year to rewrite job descriptions and transform assessment processes to focus more on true competencies. And another major business coalition, OneTen, has pledged to upskill and hire one million more Black Americans in the next decade, with a focus on skills first. 

But until recently, most of the news around loosening degree requirements in the past year has been anecdotal or promises about the future. Now there’s data: AP News, for example, recently reported that ZipRecruiter data shows the percentage of job postings requiring a bachelor’s degree fell to 7 percent between January and June of this year, down sharply from 11 percent the year before. That follows a decline of almost 4 percentage points between 2016 and 2020. 

Some of that represents churn in sectors that were hard hit in the pandemic and typically don’t require college degrees, said Elise Gould, senior economist at the Economic Policy Institute. 

“Who was hurt by the recession? We know it was disproportionately lower wage, lower hours workers who were hit a lot in leisure and hospitality,” she said. “You’re going to see an uptick in job postings that don’t require a college degree simply because that is where the deficits lie.”

The big idea: But even so, an actual shift in requirements does seem to be underway. Labor insights firm Emsi Burning Glass, for example, found that the trend is occurring even after controlling for churn in roles that don’t typically require a degree. The firm has noted a 4 percentage point decline in postings requiring a bachelor’s degree since early 2020, said research manager Layla O’Kane. 

“We’re seeing it both across the job market in general but also within specific occupations, so it’s not only driven by changes in the composition of the labor market,” O’Kane said. “There are more jobs right now than there are people to fill them, so in an attempt to widen the pool of applicants that are available to them, [employers] are removing some of these requirements.”

A key question, of course, is whether this will last. Brad Hershbein, a labor economist at the W.E. Upjohn Institute for Employment Research, said that the raising and lowering of requirements is a typical part of the business cycle—but his research shows the general trend is still to increase requirements somewhat over time.

Usually, however, it’s recessionary cycles that drive the overall increase. And we’re not seeing that this time. 

“Generally when employers do raise requirements, like they do during a recession, it comes back down some of the way as the economy improves but not all of the way,” Hershbein said. “Some of those requirements actually stay because the businesses use that time to change how they actually produce.”

Whether this current cycle will result in a reversal of that overall trend in part depends on what employers learn from the experience, he said.

On the job: Desirée Jewell, vice president of marketing and communications at the nonprofit SkillUp, knows the employer experience firsthand. SkillUp works to connect displaced workers to jobs in high-growth industries, and it has removed degree requirements for many of its internal roles. Jewell is personally looking to hire a marketing manager for the company, and she said the shift in requirements has opened up the door to more talent, such as candidates who marketed for family businesses for years. 

Nevertheless, she said, most candidates have bachelor’s degrees and many have MBAs. It can be difficult for job seekers to even know where to find professional positions without degree requirements.

“There’s so much more we need to be doing to not only make those roles exist but make them accessible,” she said.

Looking Ahead

O’Kane of Emsi Burning Glass said she believes the trend toward skills-based hiring could be long-term. In many cases, employers have been requiring a bachelor’s degree as a proxy for soft skills or other competencies, even in positions where specialized or high-level knowledge isn’t really necessary. 

“As employers realize that they can get really qualified applicants, candidates, and employees by focusing on skills, it’s pretty likely that this will continue,” she said.

The conversation is as much about equity as it is about economic development. Roughly 68 percent of the American public lacks a bachelor’s degree, but that number increases to roughly 78 percent for Black Americans and 84 percent for Hispanic Americans. In addition to shutting workers out of economic opportunity, degree requirements can also limit the pool of talent that companies are able to pull from as well as hold the country back from economic growth. 

Gut check: But even though some employers may no longer be explicitly requiring a college degree, whether they will actually hire more high-school-educated workers still remains to be seen. Doing so can require a cultural shift in a company, said Cristian Sirera, senior manager of corporate partnerships with Opportunity@Work, a nonprofit that helps employers with inclusive hiring. 

“You have to make sure it’s top-down and implemented throughout the hiring team, training the hiring team to get out of their comfort zone and to start looking at candidates in a holistic way,” he said. “It’s going to come with a little bit of a shock to the system.”

Opportunity@Work has identified about 30 million workers who already have the skills to fill roles that pay 70 percent more than what they are currently making. 

Anthony Carnevale, executive director of the Georgetown University Center for Education and the Workforce, said he is not convinced that a significant shift in hiring is truly happening. While ongoing demographic trends, such as declining fertility and a shrinking labor force, may in time put more power in workers’ hands, credentialism is a tide that will likely not be turned. Looking past degrees can expand options for employers, but it also typically adds costs both in the search process and in rolling the dice on workers who prove to be a bad fit.  

“The reason they use credentials is it works,” he said. “We’ve got 40 years of it now at the postsecondary level and there have been hundreds of millions of hiring decisions made and employers seem to think it works.”

Inclusive Growth in the Nation’s Biggest City

Broadway in New York City. (Jason Briscoe/Unsplash)

For a deeper look, take New York City. It illustrates the nuance in any nationwide labor market trend. Unemployment across the country is down to 5.4 percent, but that figure is significantly higher in some metropolitan areas and cities, including New York. The unemployment rate in the city was 10.5 percent in July, roughly three percentage points higher than the state and 2.5 points higher than the general NYC metro area, which includes suburbs. 

Jose Ortiz, Jr., CEO of the New York City Employment and Training Coalition, said the movement to look past college degrees in hiring is still burgeoning in New York. One reason, he said, is that employers in the city are accustomed to being able to attract top talent from colleges across the country. Workforce development in the city is also more heavily controlled by nonprofits—and thus more fractured—than it is in many other places, where the community colleges dominate. Local organizations can bring greater cultural competency, Ortiz said, but their prominence means non-degree training in New York can be especially difficult for businesses and workers to navigate. 

“It’s not fully nascent but is something that requires significant work,” he said. “[Employers] are looking for the most qualified talent and because of that, that often does not include the traditional workforce development system.”

Marjorie Parker, president and CEO of JobsFirstNYC, which works on education and training for young adults, said part of the work of organizations like hers is to make sure that employers are staying honest about the skills they really need and their willingness to hire people without experience. Sometimes employers realize during training that they need additional skills that weren’t advertised.

Ortiz said more work needs to be done to ensure that everyone can share in New York City’s prosperity. Beyond changes by employers themselves, he said, the city needs to address structural barriers to employment, such as discrimination and insufficient access to quality childcare, healthcare, and housing.

“Is somebody food secure? Do they have a strong education system in their communities, specifically K-12 for their children? Is there proper infrastructure? Are they able to get around to school and good paying jobs? Do they have disabilities and other accessibility issues? Is racial and social justice a concern for them?” he said. “Without consideration for those you can’t come up with these truly equitable plans.”

Parting thought: Gould, of the Economic Policy Institute, also hopes to see wider change. No matter the education requirements of a given job, she said, work should provide livable conditions and wages. Raising the minimum wage, strengthening and enforcing labor standards, and making it easier for workers to collectively bargain would go part of the way towards that goal, she said. 

“You’re not going to solve the labor market problem for these workers on the whole by educating a larger group of workers,” she said. “There will still be X million jobs that don’t require a college degree. Let’s make those jobs family-sustaining, good jobs.”

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