FG Trade Latin/E+/Getty Images
What’s the biggest problem facing college students today? Cost is a big concern, of course, for good reason. But many would point to something equally troubling—misperceptions about the value of college degrees. That’s no surprise when reasonable questions are raised about whether graduates are job-ready—and if too many jobs unnecessarily require diplomas.
There has long been a paper ceiling that penalizes applicants who lack degrees. And more companies are now taking a closer look at so-called STARs—people Skilled Through Alternative Routes.
The group Tear the Paper Ceiling says that 61 percent of Black workers, 55 percent of Hispanic workers, 66 percent of rural workers and 62 percent of veterans are considered STARs. They have learned valuable work skills through military service, certificate programs, on-the-job training and boot camps. But too often, they’ve been shut out unfairly.
I applaud the work of this national group and their partners. The equity barriers to jobs are real. Only half of working-age people have a quality degree or other credential beyond high school, even as millions of jobs go unfilled in part because applicants lack the required background or credentials. It only makes sense to make sure we’re not leaving behind talented but uncredentialed neighbors.
But to take a deeper look is to understand this isn’t only about expanding opportunity and filling today’s open jobs, but the jobs that an increasingly tech-driven, interconnected world will demand in coming years. Skills-based hiring is a good idea, but it won’t on its own come close to solving the nation’s human talent crisis. Increasing higher educational attainment by making sure many more people get better credentials—credentials of value—is the key.
Foundation of Growth
Higher education has always been about producing graduates who are ready to start careers, not just jobs. This matters because a person who is a good applicant for a position now could face challenges moving to better and higher-paying positions because they lack the foundation for career growth fostered in postsecondary programs.
The American Association of Colleges and Universities has surveyed executives and hiring managers eight times since 2006. The most recent survey, from 2023, found that 80 percent of employers strongly or somewhat agree that college prepares people for success in the workforce. Getting a degree is certainly worth the time and money, respondents suggested, as the survey “found a strong correlation between the outcomes of a liberal education and the knowledge and skills employers view as essential for success in entry-level jobs and for advancement in their companies.”
There will always be conflicting data points in times of change. For example, the push for skills-based hiring, including at the federal level, is opening doors to a broader array of good jobs that historically required a college degree. However, research by Harvard Business School and the Burning Glass Institute shows that college graduates still have an advantage when it comes to getting jobs with higher salaries and better benefits.
It turns out that employers aren’t committing to skills-based hiring at the level that recent headlines might suggest. The Harvard–Burning Glass report tracked more than 11,000 jobs where a bachelor’s degree was no longer required in the job description. It found only a 3.5-percentage-point increase in the share of non-degree-holders hired into those roles—a decidedly underwhelming number suggesting the buzz about skills-based hiring may be more hype than trend.
The Lifelong Payoff
This and other signs reinforce the enduring value of degrees: A recent report from Georgetown University’s Center on Education and the Workforce found that 72 percent of jobs in the United States will require post–high school education or training by the year 2031. The center also found:
- People with bachelor’s degrees earn, on average, $1.2 million more over their lifetime than those with only a high school education.
- Of the 18.5 million annual job openings we expect in the coming years, more than two-thirds will require at least some college education.
- Earnings for people without degrees have been growing over the past decade, but so has pay for degree holders. Even as people without degrees earn more, they are still not catching up with those with diplomas.
Durable Skills Matter
Employers often say they’re looking for “durable” skills, such as critical thinking, communication and problem-solving.
Someone looking to hire an entry-level software developer might consider a candidate with skills in Python or other programming languages developed through informal learning. Many gifted techies are self-taught or developed skills through coding boot camps or working at start-ups, for example.
But a college graduate with similar skills might stand out because of their experience working in groups to complete projects, their communication and presentation skills, analytical thinking, and other traits fostered in college classes.
The catch: Across the board, we need better definitions of what our credentials mean. What defines a credential of value, exactly, and how do we make sure that the people obtaining credentials can do the work of the future?
Certainly, our fast-moving, tech-driven economy increasingly rewards nimble problem-solvers. According to the World Economic Forum’s 2023 Future of Jobs report, employers estimate that 44 percent of workers’ skills will be disrupted in the next five years.
“Cognitive skills are reported to be growing in importance most quickly, reflecting the increasing importance of complex problem-solving in the workplace,” the report said. “Surveyed businesses report creative thinking to be growing in importance slightly more rapidly than analytical thinking.”
There are many implications to this change. Embedded in the education pay premium is a fairness issue when it comes to who goes to college and how we support them. The Georgetown center has long reported on the value of a college degree and the persistent opportunity gaps for women and people of color.
The Change-Ready Nation
Whatever the impact of skills-based hiring on the nation’s labor shortage, we shouldn’t stop there. Addressing the long-standing inequities in higher education and the workforce means ensuring that these skills-based pathways include opportunities for all workers, especially when it comes to pursuing further education and training even after they enter the workforce.
Skills-based hiring and the push for increasing attainment aren’t countervailing forces. They’re aimed at ensuring that the nation grows and applies the talent it needs to be prepared for the human work of the 21st century, and to achieve the civic and economic benefits that people with good-paying jobs bring to their communities.
In the end, this is about more than the job readiness of our students. We’re talking about the change readiness of our entire nation in a rapidly evolving economy. It makes sense to revamp job requirements to meet workforce demands, but there’s no denying we’ll need the best-educated country we can build if we’re going to deliver opportunity and economic prosperity fairly for everyone.