The Job: Slow Shift to Skills

Gains in nondegree hiring aren’t happening at scale yet, even in Texas.

We came up short in a hunt for Texas employers that are hiring serious numbers of workers without four-year degrees for roles that traditionally require them. Also, an industrial services company goes big on apprenticeship and certification, and Bill Gates talks with Sam Altman about AI and jobs.

Little Movement on Nondegree Hiring

Texas seems like the right place to look for employers that have begun hiring large numbers of workers without four-year degrees for roles that have traditionally required them, in part because of momentum around the state’s infusion of serious new money into community colleges, including for short-term “credentials of value.”

Yet after months of trying, we largely struck out in a hunt for examples. There is progress on nondegree hiring in Texas, Lilah Burke reports for Work Shift, but you have to squint to see it.

The hype around companies dropping degree requirements in hiring does not appear to be translating into widespread action. In fact, credential creep continues in the U.S. labor market. Yet it’s probably too early to dub this movement a dud.

Removing degree requirements is merely a first step. To hire workers without relying on the signal of a degree requires different ways of determining what job candidates know and can do. And a shift from credential-based to skills-based hiring remains more aspiration than reality.  

Plenty of economic data is available on educational attainment and the labor market, Jed Kolko, the under secretary for economic affairs at the U.S. Department of Commerce, said on a recent episode of a podcast hosted by Jobs for the Future. But comprehensive data on skills, or even agreed-upon definitions and lists of skills, are lacking.

“That makes it harder to track how much skills-based hiring is going on,” Kolko says, “and to incorporate skills-based hiring into job-search systems.”

Some companies are moving forward. IBM is likely the world’s leader in nondegree and skills-first hiring. The company’s share of U.S. hires without four-year degrees was approaching 20% last year.

Accenture also is worth watching. In Texas, the professional services giant has partnered with UpSkill Houston, an employer-led initiative, for a project focused on the hydrogen industry. Accenture is helping to determine which jobs don’t require four-year degrees, Burke reports, and to find overlaps in skills with common occupations in disadvantaged Houston neighborhoods. The goal is to help those workers get short-term training to break into the booming hydrogen field.

Likewise, Southwest Airlines recruits junior technology associates through partnerships with Per Scholas and other training providers. But that program—like other promising strategies aimed at workers without four-year degrees—remains quite small, with just a dozen or so participants.

Real progress in efforts to increase mobility for nondegree workers is unlikely during the next couple years, Joseph Fuller, a professor at Harvard University’s business school who co-leads its Managing the Future of Work initiative, recently told me.

Yet Fuller is bullish on skills-based hiring becoming a real thing in five to 10 years. That’s because he predicts that AI will create the data to solve the skills taxonomy problem Kolko describes. And if skills-based hiring allows for serious movement for workers without bachelor’s degrees, Fuller says the future will look like where Texas is headed.

Credentialed Apprentices in Construction

Hiring for well-paying jobs in the trades and transportation has been on the rise in Texas, Burke reports, with cranes and new warehouses popping up in greater Dallas, Houston, and San Antonio.

Those jobs typically don’t require degrees. But the industrial construction boom in Texas is encouraging some employers to get more creative in hiring. And some are giving registered apprenticeships a whirl to develop a better pipeline of talent. The apprenticeships include classroom learning and, often, a path to a portable, stackable credential.

“Our industry has a workforce shortage,” says Zeke Smith, director of leadership and workforce development for Apache Industrial Services. The Texas-based company created its registered apprenticeship program in 2020 to train and recruit carpenters, industrial painters, insulators, and other workers.

The goal was to help make this an attractive career again, Smith says. “Let’s go out and find folks.”

Motivation is the key for Apache’s apprentices, who don’t need any college credits to participate. The program has seen steady growth, employing 150 apprentices so far, with more to come, including regional cohorts that cross state lines.

Apache has worked with K-12 school districts to promote the apprenticeships. It also has partnered with community colleges in Texas, including on coursework for the two-year apprenticeship’s classroom component. Completers earn journeyman certifications, which help them advance at Apache and beyond.

The Kicker: “We get you into this industry,” Smith says, with safety training and a credential. “If you move on, great.”

North Carolina’s Community Colleges Make a Big Bid to Stay Relevant

The system is poised to ask state legislators to overhaul its funding to focus on how well colleges prepare students for high-demand, well-paying jobs.

Altman on AI and the Labor Market

In a recently aired episode of his podcast, Bill Gates interviewed Sam Altman. The OpenAI CEO described potential productivity gains companies could get from AI, as well as which jobs and industries could see the first big impacts.

Right now, Altman said, AI systems can do tasks, not jobs. The resulting boost is most obvious in coding, where the technology is “massively deployed and at scaled usage.” A programmer currently can use AI tools to speed up their work by about 3x, he said.

The benefits go well beyond doing three times the work, though. Altman said developers can use their time and brainpower to do higher-order thinking. “It’s like going from punch cards to higher-level languages didn’t just let us program a little faster, [they] let us do these qualitatively new things,” he said.

Beyond coding, Altman said he’s most excited about the productivity improvement curve for healthcare and education. And that curve will be steep for the next five or 10 years, he said. “These are the stupidest the models will ever be.”

The resulting technological revolution will be much faster than previous ones, Altman predicted, where a massive percentage of jobs change over a couple of generations.

“That’s the part that I find potentially a little scary,” he said, pointing to “the speed with which society is going to have to adapt, and that the labor market will change.”

Industrial Automation: The technology’s application for manual labor, including through the use of robotics, largely has been on the back burner in recent years, Gates noted.

OpenAI worked on robotics early on. But Altman said the company realized it needed intelligence and cognition first before turning to how to adapt AI to physicality. But OpenAI always planned to come back to robotics and has started investing in that space. If AI becomes more practical for robotics, Altman acknowledged that could lead to rapid changes for blue-collar work.

Even so, AI’s likely disruption to jobs isn’t following the pattern envisioned by most experts.

“The consensus prediction, if we rewind seven or 10 years, was that the impact was going to be blue-collar work first, white-collar work second, creativity maybe never, but certainly last, because that was magic and human,” Altman said. “Obviously, it’s gone exactly the other direction.”

Open Tabs

Healthcare High Schools
Bloomberg Philanthropies announced a $250M program to create new high schools around the country that will graduate students directly into high-demand healthcare jobs with family-sustaining wages. The initiative features partnerships between public K-12 systems, community colleges, and hospitals in 10 regions. It will serve roughly 6K students at full capacity. Students will be offered work-based learning and the ability to earn industry credentials.

Supply and Demand
Community colleges are not keeping up with demand for training in fields with employment growth, according to new research by Michel Grosz, an economist at the Federal Trade Commission. The study analyzed program-level data for California community colleges and found that an occupation’s share of degree and certificate completions grew by half a percentage point for every percentage-point increase in its share of employment.

Short-Term Training
Many workers without four-year degrees who participated in a focus group conducted by the Federal Reserve System reported pursuing unconventional, short-term skills building opportunities. They had varied and often limited success in securing quality employment, write researchers with the Atlanta Fed, suggesting a need for closer examination of how employers value nondegree credentials and less formal skills-building.

Manufacturing and Higher Ed
In New Jersey, colleges and employers are charged with rolling out integrated education and career pathways in manufacturing, under a law signed this week. The state is providing $10M to colleges to advertise the new programs to students. The law builds on broader work the state is doing through its Pathways to Career Opportunities initiative, intended to bring higher education and industry together around high-growth jobs.

AI and Productivity
Fully 91% of business leaders expect AI to increase worker productivity at their organizations, according to a survey conducted by Deloitte across 16 nations. A vast majority of respondents (72%) expect AI to drive changes in their talent strategies during the next two years. But the survey uncovered a relative lack of preparedness in that area, with just 47% saying they sufficiently educate employees about the tech’s capabilities, benefits, and value.

AI and Career Plans
About 11% of undergraduates say AI has had a major impact on their career plans, according to a new national survey of students at two-year and four-year colleges by Inside Higher Ed and College Pulse. Notable differences emerge by gender, income, and first-generation status—with men twice as likely as women to say AI has had a big impact on their career plans. Higher-income students and those with a family history of college-going also are more likely to say AI is influencing their choices.

Apprenticeships and Degrees
Multiverse and Northeastern University have created a new degree pathway for apprentices. Learning and work experience earned by Multiverse apprentices (including alumni) now will be recognized with credits that count toward a Northeastern degree. The U.K.-based Multiverse last year received degree-awarding powers in that country. However, the company had recent layoffs linked to its U.S. expansion plan, The Telegraph reported.

Skills and LERs
A new project from the National Governors Association and Jobs for the Future seeks to help state policymakers with skills-based training and hiring practices and to support states with learning and employment record (LER) systems. Also, an updated report from SmartResume seeks to make sense of the complex LER ecosystem by charting which entities issue, share, and consume LER data to support skills-based hiring.

Two school snow days during a short workweek have put a damper on my productivity. But childcare snags are much easier for people like me, with flexible jobs and the WFH option. I hope you all are surviving the winter weather. Catch you next week. —PF

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