In the 21st century, education has become America’s most significant marker for class privilege. People with bachelor’s and advanced degrees have mostly prospered, while employment prospects, wages, and advancement opportunities for those with less education have fallen. While there are many reasons for this persisting disparity, a big one is that jobseekers keep hitting “the paper ceiling.”
The paper ceiling is the invisible barrier that comes at every turn for workers without a bachelor’s degree. Early in the 2000s, many employers began adding degree requirements to job descriptions, whether they needed them or not — using the degree as a proxy for job preparedness. As a result, workers without a bachelor’s degree were screened out of opportunities.
Research from Opportunity@Work, which leveraged public datasets, the Occupational Information Network (O*NET) and the Current Population Survey (CPS), found there is an overlooked talent pool of skilled workers in our economy — uncovering more information about workers without degrees, their occupations, and skill sets. This data showed that Americans skilled through alternative routes other than a bachelor’s degree represent 50% of the U.S. workforce. Many of them possess skills that should qualify them for jobs with salaries at least 50% higher than their current job. In other words, our current hiring practices systematically underutilize the skills of millions of U.S. workers, deepening the economic divide between those with and without college degrees.
Luckily, the trend toward degree inflation is starting to reverse. Business, government, and community leaders are moving towards skills-based hiring practices. In one recent survey, 81% of employers said they are looking at skills rather than degrees as they struggle to fill open positions with U.S. unemployment at a record low.
Policymakers in both parties are also starting to act. In Colorado, Utah, and Maryland, elected leaders have passed laws or signed executive orders that eliminate or substantially reduce degree requirements for public sector hiring, with Maryland already having seen a 41% increase in new hires without degrees. More recently, Pennsylvania followed suit, with Governor Josh Shapiro signing an executive order declaring thousands of state jobs would no longer require a four-year college degree on his first full day in office.
At the federal level, President Biden endorsed the “skills, not degrees” movement in last year’s State of the Union address. The administration’s Office of Personnel Management has released new guidance for agencies to help them implement a skills-based hiring approach to filling jobs. Unfortunately, Congress has yet to pass The Chance to Compete Act, which seeks to improve and update the hiring process for federal employers, focusing on potential candidates ability to succeed in the job rather than where or if they received their college degree.
The federal and state momentum is encouraging, but there are still kinks that need to be worked out. First, there needs to be a greater commitment from employers across the private and public sector to scale up skills-based hiring. What’s more, organizational leaders who commit to skills-based hiring are not always the ones in charge of executing it. Many HR professionals and hiring managers may not understand how to assess job applicants’ skills in the absence of formal credentials.
This can be especially confusing when job descriptions ask for a bachelor’s degree or an equivalent skill or practical experience — forcing hiring managers to compare people’s qualifications without knowing how to analyze them properly. This is why Opportunity@Work’s Paper Ceiling campaign is so important. Rather than asking for degree equivalency, it encourages employers to drop degree requirements altogether, making it easier for the jobseeker as well as the employer to navigate the hiring process.
While this would make the process easier, it still will be a challenge to truly assess an applicant’s skills in absence of historically relied upon credentials. It is why job descriptions are also critically important. As employers reduce their reliance on degree-based hiring, they must think more carefully about what capabilities they are truly looking for and describe them more explicitly. This not only helps the applicant better convey their relevant skills, it helps the employer match the skills to the internal need more effectively, while also encouraging skill providers to consider how they can update their curriculum to respond to in-demand opportunities.
As with any new initiative, it will take time to get this right. As employers newer to the space begin to get involved and adopt skills-based hiring, they should consider starting off with a trial, implementing the practice with one or two in-demand positions. This will allow employers to test best practice and understand what works – ensuring their skills-based hiring procedures are having the intended impact.
In addition to shifts in employer practice, the move toward skills-based hiring will require overhauling our nation’s workforce development system. This means a greater emphasis on industry-responsive education, training, and experience, like career and technical education and work-based learning, across K-12 and postsecondary education. Policies that promote competency-based education, offer prior-learning assessments, and expand career pathways will also be increasingly important so individuals can have more stackable, skills-based learning opportunities while also understanding changing labor market demands. Additionally, innovation around learning and employment records, which provide digital infrastructure to hold information about a person’s academic and industry achievements will be important to design and scale so individuals have a more accessible way to demonstrate their accumulation of skills, knowledge and experiences.
Dropping degree requirements and moving toward skills-based hiring practices has the potential to even the playing field for degree and non-degree workers — helping to close equity gaps that persist across employment opportunities and wages, while also creating a more diverse talent pool for employers to pull from.
Employers and policymakers alike should lead by example, by removing degree requirements from job descriptions that don’t need them. The private and public sector must also better work together to promote industry-responsive education and training opportunities that ensure people are learning the skills needed for in-demand careers while also supporting assessments and new tools that ensure individual’s skills are effectively translated, demonstrated, and understood in the job market.
Reforming hiring practices to consider jobseekers’ actual skills and competencies, not just formal credentials, will narrow economic inequality and boost U.S. productivity. Previously overlooked workers will be able to pursue attractive career pathways even without a four-year degree and employers will be better able to fill jobs that need filling. It is a win-win.