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Degree Inflation Pushes Out Skilled Workers

Not all careers require four-year degrees, but many of today’s job listings stipulate a college degree as a minimum education requirement. Researchers at Harvard Business School recently released a study on the increasing tendency of employers to demand bachelor’s degrees for jobs that previously did not require them—referred to as “degree inflation.”

The report, “Dismissed by Degrees: How degree inflation is undermining U.S. competitiveness and hurting America’s middle class,” analyzed more than 26 million job postings and found 6.2 million of those jobs are currently at risk of degree inflation. These jobs are seeking candidates with four-year college degrees to fill positions currently held by someone with a high school diploma or an associate’s degree. But it’s not because the jobs themselves have necessarily become more complicated or demanding.

Employers are seeking a bachelor’s degree for jobs that formerly required less education, even when the actual skills required haven’t changed or when this makes the position harder to fill.

For example, 67 percent of job postings for production supervisors request a bachelor’s degree or higher. But only 16 percent of the current workforce has a college degree. That’s a 51 percent degree gap.

Why it matters

There are currently 6.6 million unemployed Americans, according to the Bureau of Labor Statistics. There are also nearly 6 million job openings. Degree inflation is not the sole reason for this disconnect, but it is a barrier to employment and restricts growth.

By engaging in degree inflation, employers restrict their access to a wider pool of talent in several ways. For a start, they disqualify all those who might have the skills—and not just the college degree—to do that job.

The report surveyed employers from various industries who acknowledged they “reject some individuals who have the skills and experience to be successful in a middle-skills job because they don’t meet the requirement of having a four-year degree.” Filtering out talented, non-degree workers results in longer job fulfillment periods and higher employee turnover.

Disenfranchising qualified, middle-skills workers brings employers financial burdens, as well. College graduates command a wage premium, and “employers pay more, often significantly more, for college graduates to do jobs also filled by non-degree holders without getting any material improvement in productivity.”

Fifty-five percent of the surveyed employers stated recent college graduates were paid more than non-degree workers to do the same job in their company.

Why it is happening

Employers have “defaulted to using a four-year degree as a proxy for a candidate’s range and depth of skills”—in terms of soft skills as well as hard skills.

Yet, when employers were asked to rank the most important credential/qualification when considering potential candidates, 37 percent ranked “relevant work experience” as the “most important” and 40 percent of the respondents ranked a “four-year degree” as the “least important.”

The importance of experience [to employers] is hardly a surprise. However, it reveals a flaw in the logic of companies defaulting to hiring college graduates. While that credential may provide employers with a great sense of confidence that their new employee will prosper, it shuts out workers who may bring to the organization precisely the sort of competence that employers hope to obtain through the proxy of a college degree.

What to do about it

Employers can prevent degree inflation by shifting their perception of workers without a degree. Non-degree workers can perform middle-skills tasks.

There also needs to be a “systemic shift in the way middle-skills workers are being prepared to enter the workforce,” according to the report.

Hard and soft skills are taught in college, but they are also being taught through apprenticeships, vocational colleges, and workforce-training institutes. The Center’s “Great Jobs Without a Four-Year Degree” project highlights the success of these educational institutions and training programs in Minnesota.

Takeaway

This is not meant to delegitimize four-year college degrees or dissuade anyone from pursuing one if that is their aspiration. Any young person with the aptitude and desire to earn a bachelor’s degree should. I did. But a person’s ability to enter the workforce and access a successful career path should not be determined solely by the presence or lack of a four-year degree.

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