Degree inflation, or employers’ tendency to demand degrees for jobs that previously never required them, eroded U.S. competitiveness, hurt the middle class, and kept people from realizing their unique potential.
Employers are finally rethinking that mindset. According to recent news stories and podcasts, this movement will unlock the potential of millions of Americans by spurring innovation that will lead to an increasing array of postsecondary education options for learners.
Ranking companies by how well they help people self-actualize
As The Wall Street Journal recently reported, the Burning Glass Institute’s American Opportunity Index ranks “companies by how well they help employees, especially those without college degrees, move into better, high-paying jobs.”
With support from the Schultz Family Foundation, Burning Glass examined 396 U.S.-based companies. Coca-Cola came out on top, followed by J.M. Smucker and W.W. Grainger. Bank of America also is in the top 10. It has hired 1,500 interns without college degrees and has committed to hiring 10,000 workers from low- and moderate-income communities by 2025.
Employees at these companies are 2.5 times more likely to receive promotions, and are paid, on average, 68 percent more for the same jobs, the Burning Glass Institute found.
In a Forbes.com BrandVoice essay, Schultz Family Foundation Managing Director Rajiv Chandrasekaran explains how top companies have moved toward a culture that places importance on providing employees with meaningful opportunities to grow and contribute.
“The inescapable conclusion is that talent-management practices that fuel opportunity are principles-based and a business choice, not preordained by industry fundamentals,” Chandrasekaran says. “A deep sense of openness and humility — among executives, human-resource leads, hiring managers, and other stakeholders — to move beyond outdated thinking is crucial.”
Nearly half of companies have done away with degree requirements
Changing outdated mindsets has, for many employers, meant rethinking their reliance of degree requirements.
CBS News recently reported that ZipRecruiter found 45 percent of employers said they had done away with degree requirements for certain roles over the past year. Nearly three-quarters, 72 percent, said they prioritize candidates’ skills and experience over degrees.
“Employers are saying, ‘We’ll take you and help you get the requirements. We’ll invest in training you,’” ZipRecruiter’s chief economist Julia Pollack told CBS.
ZipRecruiter’s findings mirror other surveys.
According to AXIOS, the labor analytics firm Lightcast found that, in 2023, only 78.4 percent of job postings for “college-level occupations” actually required a degree. That number was down from 85 percent in 2010 and 82.5 percent in 2017.
As AXIOS reported, Walmart, the United States’ largest private employer, recently said it is rewriting job descriptions so applicants do not need a college degree if they “possess the skills needed for the job, whether through previous experience or other forms of learning.”
Employers’ mindset shifts will lead to postsecondary education change
Employers should hasten this shift if they want innovators and educators to expand the marketplace for learning and credentialing.
Indeed, change is predicated on employers demanding it, Carnegie Mellon University professor Michael D. Smith said on The Authority Podcast.
“No college president has the right incentives to change the system,” Smith says. In his new book, The Abundant University: Remaking Higher Education for a Digital World, Smith outlines how to dismantle the monopoly colleges and universities have on credentialing.
Smith expanded on this argument with University of Chicago economist Steven Levitt, host of the podcast, “People I (Mostly) Admire.”
“[A]s long as employers still rely on four-year degrees, we in higher education are going to be just fine,” Smith says. “Could that change? I think not only could it, but I think it is. If I have an objective signal that you’re a good coder, then I don’t need to rely as much on the Carnegie Mellon degree. If I have an objective signal that you’re a good writer, I don’t care whether you graduated from Columbia’s J-School. I want to know if you can write. Show me whether you’re a good writer or not.”
An overwhelming majority of workers have changed their mindset, meanwhile.
An edX white paper released in November 2023 found 80 percent of employees now see businesses — and how they help individuals discover and develop their aptitudes — as the new post-secondary colleges. Employers who haven’t yet changed their thinking may find themselves losing out on talent.