U.S. employers say they’re facing a talent crisis, but the reality is most are exacerbating the situation by requiring college degrees for entry-level jobs, a recent study found.
Cengage Group’s 2022 Employability Report Part 2 found that nearly two-thirds (65%) of employers say they are struggling to find talent. Yet 62% require degrees for entry-level jobs even though 43% admit that skills training credentials are more important in potential candidates. Asked why degrees were required for entry-level positions, 26% said it was to “filter the candidate pool” or “that’s the way it’s always been done.”
By requiring a degree and not focusing on a candidate’s skills or experience, employers are substantially shrinking their potential talent pool because only 38% of U.S. adults have a four-year degree, the report said.
Employers’ reluctance to relax traditional degree requirements could be due to their uncertainty on how to measure the value of alternative credentials, the report said. Forty-seven percent of employers surveyed said traditional college degrees are required because it is difficult to measure the meaningfulness of alternative certifications and credentials.
Asked why hiring managers find it difficult to measure alternative credentials, 16% said it was because they are unfamiliar with the various certifications and credentials, 36% said it was because they did not know which credentials are most meaningful, and 40% said it was because they are hiring individuals for a field that they personally have limited experience with.
“Employers seem to be stuck in a contradictory cycle, where they recognize that a degree is not an indicator of job readiness, but nonetheless require them as part of their candidate screening process,” Cengage Group CEO Michael Hansen said. “This outdated mindset and degree stigma is not only widening the labor gap, it’s costing businesses time and money and turning away potential talent.”
Hansen noted the accelerating pace of technological means change employers must look beyond the traditional four-year degree and focus on candidates’ skills, experiences, and potential to upskill or train in new fields.
While employers need to reevaluate their hiring practices, removing degree requirements is not a simple “top-down” policy change to make, he said.
“It requires a full-blown change effort to make sure hiring managers are comfortable overturning a decades-old practice,” Hansen said.
The report’s review of entry-level recruitment across three of the most in-demand industries – healthcare, technology and skilled trades – found 81% of tech employers require a two- or four-year degree. In healthcare, 50% of employers require a degree, as do 57% in the skilled trades.
Considering that there are 3.85 million unfilled IT jobs in the U.S., the tech industry faces the biggest urgency to modify hiring requirements, the report said.