ARE YOU GUILTY OF “DEGREE INFLATION?”

MARCH 2020

Many organizations are guilty of “degree inflation,” requiring sometimes lofty academic bona fides for jobs that don’t really need them.

American companies have a problem. Over the past decade, they have begun to demand a bachelor’s degree in hiring workers for jobs that traditionally haven’t required one. This, according to Joseph Fuller, Harvard Business School Professor of Management Practice, and former corporate CEO.

This uptick in credentialing, or “degree inflation,” rested on the belief that these college-educated employees would be smarter, more productive, and more engaged than workers without a degree.

But are they really?

The talent pool for college graduates is limited. Only a third of the US adult population has earned a four-year degree. The result is a misalignment between supply and demand for many kinds of jobs.

At the same time, college graduates filling middle-skills positions (those that require more than a high school diploma but less than a college degree) such as supervisors, support specialists, technicians, sales representatives, data analysts, and production managers are costing companies more money to employ, tend to be less engaged in their jobs, have a higher turnover rate, and reach productivity levels only on par with high school graduates doing the same job.

This combination of underachievement and misalignment hurts both US competitiveness and working-class Americans seeking a career path toward a decent standard of living.

DEGREE INFLATION IS NOT JUST HURTING INDIVIDUAL WORKERS;
IT UNDERMINES AMERICAN COMPETITIVENESS

How did this happen? During the Great Recession of 2006-2008, unemployed college graduates were willing to take jobs for which they were clearly overqualified. Baristas with bachelor’s degrees became the popular image, creating the impression that degree inflation was the result of excess supply, a weak job market, and overly opportunistic human resource departments. To upgrade the quality of the workforce, why not get a college grad for a middle-skill position?

Part of a research project between Accenture, Grads of Life, and Harvard Business School included examining more than 26 million job postings and surveying 600 business and human resource executives. They concluded that the idea of hiring a college grad for a middle-skill position was incorrect. Instead, they found that employers were increasingly inflating the educational requirements for jobs usually held by high school grads. It was also found that automated hiring tools excluded applicants with relevant experience simply because they lacked a college degree. In many cases, qualified candidates never even got the chance to apply for a position.

In a typical middle skills job title such as production worker supervisor, 67 percent of the job postings required a bachelor’s degree or higher; yet just 16 percent of workers already in that position held such a degree. That sort of disconnect leaves many jobs unfilled, despite the fact that degreeless middle-skill workers with relevant experience may be available.  Taking a broader view, as many as 6.2 million workers could be affected by the practice of degree inflation.

It is time for employers to consider alternatives.  If you’re someone who believes that applicants without a college degree are somehow lacking, you should consider investing in talent development pipelines that employ work-based-learning opportunities, co-op programs or paid apprenticeships. Companies, educators, and policymakers need to work together to bring about a systemic shift in the way middle-skills workers are prepared to enter the workforce by encouraging adoption of such approaches.

Lifepoint Health, a $6 billion company with 72 hospitals in 22 states and 46,000 employees, has started to view its hiring practices through a new lens. The company grew significantly by acquiring hospital systems around the country and found there was a wide disparity in job descriptions among various facilities. One hospital would post a job requiring a four-year college degree, while another would advertise the same job without it. Since the degree requirement hampered hiring efforts, particularly in rural communities, Lifepoint launched an organization-wide effort to address the problem by systematically reviewing all job descriptions to identify the specific skills associated with each position.

Does this job really require a college degree, its HR team asked, or can we provide the training ourselves to develop the necessary skills? Job descriptions were then updated to reflect needs and skills to attract competent candidates, regardless of educational status. A number of other organizations such as Hasbro, CVS Health, and State Street have adopted similar approaches, recognizing the need to return to fundamentals and invest in grooming talent.

THE TAKEAWAY: In today’s economy, you cannot afford to let the lack of a college degree become a barrier to those entering the workforce or seeking careers. Competency is more important than credentials. Degree inflation is not just hurting individual workers, it undermines American competitiveness. We can’t let that happen.

RELATED: See 14 companies that no longer require college degrees.

Source: Harvard Business School | Working Knowledge

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