Greetings, esteemed parents of budding innovators and STEM enthusiasts!
For those who are perplexed about the future of education and its subsequent relevance in the job market, I am honored to share insights into the rise of skills over traditional degrees.
The prevailing notion has long been that the key to success is a college degree. While attaining a degree can enhance critical skills, the evolving landscape challenges the notion of a direct correlation between degrees and career success.
Our recent analysis, drawing from the Skills-Based Hiring study published by the Burning Glass Institute and HBS, identifies two distinct categories of firms that changed their hiring policies:
– Skills-Based Hiring Leaders: These visionary firms are effecting tangible change, increasing their hiring of workers without bachelor’s degrees in relevant roles by nearly 20%.
–In Name Only: Approximately 45% of firms appear to make surface-level adjustments, altering their stated requirements without meaningful changes in actual hiring practices.
Taking notes from this interesting, in-depth study, I will list down the reasons for what led to ‘Degree Deflation’, how it is helping skilled candidates, future trends, and how giants like Walmart are reaping benefits from the change. The Skills Paradigm Shift: A Transformative Journey Amidst changes in the economy, many with bachelor’s degree holders aren’t using their qualifications fully in their jobs. In many circumstances, they are not getting a chance to use their qualifications in the right manner. This highlights the need to prioritize hiring based on skills rather than degrees.
Seminal research from Harvard Business School and the Burning Glass Institute paints a compelling picture of this transformative journey. The study reveals that approximately 37% of companies have embraced skills-based hiring practices in recent years. Notable trailblazers in this movement include industry titans like Walmart, Apple, and Target, who have championed a progressive approach.
Degree Inflation to Degree Deflation
A significant transformation is sweeping through economies as companies are reassessing their approach to hiring in response to the situation of scarcity of skilled workers. This shift, known as “Degree Deflation,” marks a departure from the previous trend of “degree inflation”. Degree Inflation refers to the past condition where companies required degrees for positions that didn’t require one.
This shift isn’t just a matter of policy; it’s about recognizing the untapped potential of over 70 million skilled workers in the U.S. who lack degrees but possess the experience, drive, skills, and abilities to fill critical roles in the labor market. By removing the degree barrier, companies are opening doors to individuals who have long been excluded from opportunities that could elevate their societal status.
Leading the charge in this movement are industry giants like IBM. The company has eliminated the bachelor’s degree requirement for more than half of its U.S. job openings. Walmart’s recent decision to revise job descriptions now allows applicants to qualify for positions based on relevant experience or alternative forms of learning.
Similarly, states like Virginia and New Jersey have taken decisive action to eliminate degree requirements for a vast majority of state-classified positions, signaling a broader societal shift towards skills-based hiring practices. The data speaks volumes: from May to August 2022, government agencies saw a remarkable 41% increase in hiring individuals without degrees. Moreover, states like Alaska, Minnesota, Pennsylvania, and Utah have followed suit, eliminating degree requirements for numerous job categories.
Employers are increasingly recognizing the value of non-degree workers, citing their ability to reach full productivity faster, lower absenteeism rates, and decreased likelihood of leaving for competitors compared to recent college graduates. This sentiment is echoed by the findings of a Harvard Business School and Accenture study, aptly named “Dismissed by Degrees.”
In a bold move towards inclusivity and diversity, an additional 45% of U.S.-based companies have taken proactive steps to remove college degree requirements from their job postings. This strategic shift, spearheaded by corporate giants such as Bank of America, Amazon, and Lockheed Martin, highlights the increasing awareness of traditional education’s limitations in gauging an individual’s potential.
Unleashing the Power of Skills: Realizing Economic Mobility and Future As articulated by Diane Gayeski, former dean and professor, “People shouldn’t pursue a four-year degree as a ticket to an immediate first job.” Instead, fostering a breadth of experiences and creativity through exposure to diverse concepts and ideas is paramount. Why, you might ask, should we advocate for skills over degrees? The rationale is rooted in pragmatic realities and tangible outcomes:
1. Expanded Job Opportunities:
As per a report by Burning Glass Technologies, degree requirements were not listed in 43% of job postings in 2021. This clearly indicates a growing number of opportunities for individuals without traditional degrees. Further, this opens doors for skilled employees and undergraduates who can now access a broader range of job openings across diverse career paths and industries.
Recommended Reading: How to Choose a Career Path For Your Child
2. Increased Earning Potential:
The starting salary for bachelor’s degree graduates in 2021 was $55,260, as per a study by the National Association of Colleges and Employers. The same report highlighted that skilled workers in the IT and healthcare sectors commanded comparable or higher salaries. Similarly, individuals from AI, data science, and cybersecurity commanded salaries upwards of $100,000 annually.
3. Faster Entry into the Workforce:
Research from Strada Education Network and Burning Glass Technologies states that individuals with skills-based training enter the workforce 50% faster compared to college-degree candidates. This eventually leads to changing the entire career trajectories of candidates by allowing them to start earning income sooner.
4. Reduced Financial Burden:
According to the College Board report, the average annual tuition and fees for students at four-year institutions ranged between $10,560 to $27,020 in 2022. By the end of 2023, the total student loan debt in the US crossed $1.6 trillion. By bypassing the need for a traditional degree, candidates can avoid the financial burden.
5. Real-World Relevance:
According to the US Bureau of Labor Statistics, the healthcare, information technology, and skilled sectors are projected to grow by multiple folds between 2020 to 2030. This has led to a shift as hiring managers have started prioritizing practical skills over degrees. Further, 69% of the hiring managers have expressed dissatisfaction with conventional CVs that lack skill-based programs or training
By equipping our children with these skills, we empower them to navigate the dynamic landscape of innovation and entrepreneurship with ease.
Walmart Leads by Example In alignment with the latest trend, Walmart has embarked on an initiative to empower its associates with the tools and knowledge that are required in today’s competitive landscape.
Since its inception in 2018, Walmart’s Live Better U (LBU) education has allowed access to higher learning opportunities from esteemed academic institutions such as the University of Arkansas, Purdue Global, and Spelman College. To date, the LBU program has equipped over 126,000 associates with the skills and credentials necessary to excel in their roles.
Lorraine Stomski, Senior Vice President of Associate Learning and Leadership at Walmart, encapsulates the essence of this transformative endeavor: “We want associates to have ultimate flexibility and control over their career, so we’re making it easy for them to earn college credit simply by attending training.” With this approach, Walmart is pioneering a new era of skills-driven success.
Looking ahead, the impact of dropping degree requirements could be profound. The 2022 HBS and Burning Glass report estimates that over the next five years, removing degree conditions could open up 1.4 million jobs to workers without degrees, signaling a significant step towards a more inclusive and equitable workforce.
Empower Your Child’s Journey: Charting a Course Towards Success
As stewards of our children’s educational odyssey, let us embrace the ethos of the skills revolution with unwavering resolve. Encourage your child to explore their passions, immerse themselves in hands-on experiences, and embark on a journey of perpetual learning.
We at Moonpreneur understand the need of the hour and the role of garnering tech skills over a college degree. To make it possible for tomorrow’s prodigies to be future-ready, we have handstitched a program that focuses on exponential learning, robotics, the future of work, and much more. Meet the Innovator Program, where your kid will learn about the technical knowledge of Robotics/App or Game Development, fundamentals of programming (coding), statements, variables, working with sensors, and much more. The program is designed to inculcate deep technical skills along with leadership, innovation, and entrepreneurial thinking.
In doing so, we transcend the constraints of the ‘paper ceiling’ and unleash the boundless potential of skills-driven success. Together, let us chart a course toward a future where every child has the opportunity to thrive and flourish in the ever-expanding panorama of possibilities. If you want your kid to experience the potential of our program, attend the biggest event of the year that is just around the corner- Moonbattle Conference 2024. Designed for parents, students, and young entrepreneurs, this conference explores STEM, eLearning, robotics, and more, and aims to foster innovation & problem-solving skills.
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With conviction and foresight, we pave the way for a generation of trailblazers poised to leave an indelible mark on the tapestry of human achievement.
In a snapshot:
- Firms increasing non-degree hires by nearly 20%.
- In response to the scarcity of skilled workers, companies shifted to ‘Degree Deflation’.
- 43% of 2021 job postings omit degree requirements.
- Employers prioritize practical skills over pedigree.
- Tech skills unlock entrepreneurial opportunities.
- Continued trend towards skills-based hiring for increased opportunities.
