College Degree: Still Important?

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By: Arianne Cohen

The new candidate seemed perfect: sparkling references and great grades from a local undergraduate business program. He lacked experience, but the hiring manager figured he’d get up to speed quickly. She green-lit the hire.

This continues to be a familiar scenario in HR departments. The only problem: It’s the precise opposite of the skills-based hiring approach that chief executives and HR leaders have publicly supported in droves. Their idea was to end the paper ceiling while filling positions with talented, non-degreed employees—a win-win. And yet, says Matt Sigelman, president of hiring think-tank the Burning Glass Institute, “It’s not working out quite the way people planned.” What went wrong?

A study released this year by Harvard Business School and Burning Glass found that skills-based hiring is the exception in corporations, not the rule. Fewer than 1 in 700 hires in 2023 were skills based, and the share of workers hired without college degrees grew by only about 3.5 percent last year. One encouraging sign, however, is that more and more job listings are skills based. Between 2014 and 2023, the number of jobs from which employers dropped degree requirements increased fourfold. “That’s a very important first step,” says Sigelman, “because companies tend to take their own requirements literally.”

Experts say firms remain eager to do more skills-based hiring. The issue is execution: Apparently, there is a disconnect between the executive suite and the front lines. Though top brass at many firms have signed off on skills-based hiring, the in-house work to support the practice lags. “You find that the chain is broken,” says David Ellis, vice president of global talent acquisition transformation at Korn Ferry.

The report found that some companies (18 percent) successfully adopt skills-based hiring, only to relapse. “They’re the most instructive,” Ellis says. “It’s not because of a lack of sincerity.” More likely, he suggests, executives’ attention simply moved to something else, before the internal work of permanently changing processes was completed. What’s more, the process itself seems to get in the way. Corporate-hiring technology can fail to identify candidates with applicable skill sets, and experienced hiring managers tend to lean on the practices that have succeeded in the past. “These managers say, ‘I have a degree, the best performers on my team have a degree, and I want someone with a degree,’” says Ellis.

To move forward, experts say, firms need to articulate early which skills a job requires, and—critically—what constitutes acceptable evidence that a candidate has those skills. This is not always simple. For example, an employee who has risen through the ranks to manage a customer-service team may never have taken a leadership course, but their résumé may pale in comparison to that of a candidate who lacks experience but holds an associate’s degree in business management. Yet experts suggest continuing to emphasize skills-based hiring. College enrollment has been in steady decline since 2010, and non-degreed employees tend to thrive. “People hired into a role that previously required a degree are extremely loyal,” notes Sigelman.