Skills Wanted: Companies focus on what workers can do, not what degree they hold
The supply of and demand for middle-skill workers has created a mismatch in our labor market. The “skills gap” is real, and employers are coming up with their own solutions to combat the talent shortage. According to The Wall Street Journal in an article titled “More Companies Teach Workers What Colleges Don’t,” these solutions include focusing less on four-year degrees and more on skills that workers have or can learn.
Federal policy for decades has pushed more people to go to four-year colleges, promoting a college-preparatory high-school curriculum and easing access to student loans. But technology is changing faster than colleges can keep up and employers say too many schools aren’t teaching students the skills they need—or even basic critical thinking.
With the labor market the tightest it has been in a generation, this misalignment is causing big—and expensive—headaches for employers. So companies are increasingly taking matters into their own hands. Major employers like CVS Health Corp., Novelis, International Business Machines Corp., Aon PLC and JPMorgan Chase & Co. are hiring workers because of what they can do, or what the company believes they can teach them, instead of the degrees they hold.
There are students who will thrive and excel in a four-year setting, but this path may not be the best fit for all. In fact, many students feel pressured to get a four-year degree and are not aware of alternative pathways that lead to satisfying careers. Many of these careers are in-demand and are rewarded with relatively high pay and often free from the high debt that accompanies a baccalaureate degree.
“Right now a four-year program is where many students head by default,” said Joseph Fuller, a Harvard Business School professor who has studied degree inflation.
Manufacturing, technology and health-care industries are moving [the] fastest to focus on skills over degrees because they are the sectors struggling the most to fill jobs.
A Center report, “No Four-Year Degree Required: A look at a selection of in-demand careers in Minnesota,” confirms these sectors of the economy are facing a mismatch between workers and available jobs. The growing demand for skilled workers is not being matched by a supply of skilled workers. This is partly attributed to degree inflation (as I wrote about here) and the unnecessary stipulation on many job listings that a bachelor’s degree is the minimum education requirement. The Journal continues:
Some employers have encouraged reliance on bachelor’s degrees as a proxy for skills by requiring a diploma for jobs that didn’t previously require one, Mr. Fuller said. But such degree requirements are limiting the number of applicants for a job and increasing costs for companies and employees. They also lead to frustration for workers, since fewer than half of people who enroll in college end up graduating and landing a job that utilizes their degree, he said.
The looming workforce talent shortfall is concerning. But it is encouraging to know there are employers focused on prioritizing skills over a certain type of degree. This work-based learning approach will be invaluable to overcoming the skills mismatch challenge and meeting the needs of the future workforce.
The Center will host a “must attend” forum on how to solve Minnesota’s workforce development crisis on Tuesday, April 24. Tickets are still available and can be purchased here.
[Photo Credit: The Markle Foundation]