How Eliminating Degree Requirements Can Save You Time, Money, and Turnover
Posted 9th June 2021 • Written by Laura Hilgers on LinkedIn • • • • •
If you want to fill positions more quickly, save your company money, and reduce turnover, then you might consider ditching the college degree requirements in your company’s “middle-skills” job descriptions.
That was the consensus of a study, Dismissed by Degrees, published by researchers from Harvard Business School, Accenture, and Grads of Life in 2017. The study is worth revisiting now because of the increased interest in skills-based hiring.
Dismissed by Degrees analyzed 26 million job postings and surveyed 600 business and HR leaders, focusing specifically on middle-skills jobs. These are roles that require more education than a high school diploma but less than a four-year college degree. They include supervisors, support specialists, sales representatives, inspectors, secretaries, and administrative assistants.
Historically, employers didn’t require four-year college degrees for these positions. But many companies have made them a requirement over the past several decades, resulting in what the authors call “degree inflation.” When the report was published, 6 million U.S. jobs were at risk of degree inflation.
Since that time, a number of organizations have relaxed their degree requirements. “Companies like Google, Facebook, Walmart, and Accenture revisited policy positions and withdrew absolute rules that ‘We only hire people with four-year degrees,’” says Joe Fuller, a Harvard Business School professor and one of the study’s authors, “although one could say it was a bit cheeky for Facebook to have a degree requirement because their founder and CEO didn’t earn a degree.”
Another Harvard study published in 2018 found that social skills — the ability to interact effectively with others — have become increasingly desirable to employers. “And because employers don’t have good ways to test those skills,” Joe says, “they often fall back on proxies like degree attainment as, frankly, a lazy person’s way to feel better about the choices they’re making.”
In other words, degree inflation remains a problem. Here are four key takeaways from Dismissed by Degrees that can help you hire the best person for the job, whether they have a degree or not.
1. Identify which of your middle-skills positions are at risk of degree inflation — and determine the skills that are really needed for those jobs
Three in five employers surveyed for Dismissed by Degrees reported difficulty filling middle-skills jobs and two-thirds agreed that requiring a bachelor’s degree made those jobs harder to fill.
You can avoid these difficulties by identifying your company’s middle-skills positions and looking at whether they’re at risk of degree inflation. To put it in perspective: The study found that 67% of production supervisor job postings asked for a college degree — even though only 16% of the people employed in that role at the time had one.
Look at each of your job descriptions and ask: Do candidates need to be good at interacting with the public or proficient in Microsoft Excel? Or do they need a B.A. in, say, medieval French literature? If the degree is unnecessary, eliminate the requirement.
This will open the door to a huge number of workers — including military veterans, who have often worked with very advanced technology — who have relevant work experience.
2. Evaluate the hidden costs of hiring candidates with a college degree
Companies may not realize it, but it costs a lot more to hire someone with a college degree — and the costs are sometimes hidden. Employees with four-year degrees command higher salaries and tend to be less engaged in their jobs.They also have a higher rate of voluntary turnover (39%) than nongraduates (21%) and are dramatically more likely to leave work for a competitor (49%) than their coworkers without a diploma (12%), Dismissed by Degrees reports.
When you track the costs associated with hiring workers with four-year-degrees, you can make a compelling argument for dropping these requirements.
Dismissed by Degrees highlights the example of the toy manufacturer Hasbro, which decided to fill some of its entry-level positions with nongraduates to save money. The company identified four roles in its sales and marketing departments that would be appropriate for candidates without degrees and then partnered with the nonprofit Year Up to create an internship program. At the end of the program, Hasbro hired nine full-time employees.
Jodie Neville, the former senior director of strategic initiatives at Hasbro, told researchers that the program was not only about eliminating hidden costs, it was about unearthing hidden benefits. “The process not only saved substantial resources,” Jodie says, “it completely revamped our approach to the sales and marketing function.”
3. Create talent pipelines that ensure access to people with the appropriate skills
“Increasingly,” the study reports, “companies claim that their new approach for middle-skills jobs is to ‘hire for attitude, train for skills.’”
That’s the approach that CVS Health has taken. Ernie DuPont, the senior director of workforce initiatives at CVS Health told researchers: “We considered the idea of requiring a college degree for management positions on and off over the years, but decided it’s not in our best interest. Frankly, we think it closes down a stream of potential candidates that are well qualified or, in some cases, exhibit potential.”
Instead, CVS Health hires candidates with all levels of education and uses a variety of training tools, including in-classroom and online instruction, to develop their skills. As employees advance within the company, their training grows to include education on supervisory and leadership skills.
The effort has paid off. Ernie reports that for the past 15 to 20 years, CVS Health’s retention rate is twice as high for people who go through their training programs as it is for people who arrive at the company through traditional channels.
As an added bonus, CVS Health has also been able to create a more diverse workforce. That doesn’t surprise Joe, the Harvard Business School professor. “After the death of George Floyd and the emergence of Black Lives Matter,” Joe says, “it’s become much more apparent that economic inclusion and the capacity to create economic inclusion are affected by degree requirements. When you say ‘college required,’ you’re excluding 80 percent plus of African Americans and 85 percent plus of the Latinx population.”
4. Partner with other organizations to build talent pipelines and attract nontraditional candidates
Degree inflation harms some groups more than others. And that’s particularly true of what the report calls “Opportunity Youth,” 16- to 24-year-olds who are neither in school nor in a job. They’re often the first to be shut out of local talent pools and the last to be considered for hard-to-fill vacancies.
But there are companies that have worked to remedy this. The study points to the financial services company State Street as an example. The Boston-based organization recognized that it had untapped talent within its city limits and paired with a number of community partners and nonprofits to bring in entry-level interns with high school diplomas. It then trained them alongside its interns who were enrolled in four-year colleges. Ten years after the start of the program, some of the earliest interns had risen to the level of assistant vice presidents.
In 2015, State Street took it a step further, when its then-CEO Joseph Hooley partnered with five local and national nonprofits to create the Boston Workforce Investment Network (Boston WINS) to help local high school graduates access career opportunities and college educations. The company made a commitment to hire 1,000 full-time employees from the program.
The takeaway is that there is plenty of talent out there, with or without a degree. You just may need to partner with an outside organization to find it.
Final thoughts
Eliminating degree requirements for middle-skills jobs can save your company time, money, and the headaches associated with employee turnover. So, think twice before you add these words to your next job description: “four-year degree required.”
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