While U.S. employers say they’re facing a talent crisis that’s threating their business sustainability and growth, the reality is that employers are contributing to the talent crisis with the majority (62 percent) requiring degrees for entry level jobs, and more than a quarter (26 percent) admitting they do so to “filter the candidate pool” or because “that’s the way it’s always been done.”
Exposing this outdated mindset, Cengage Group’s 2022 Employability Report (Part 2) of 1,000 U.S. hiring decision makers reveals that one of the biggest drivers causing the talent crisis is the skills mismatch between the current workforce and employers’ needs.
By requiring a degree and not focusing on a candidate’s skills or experience, employers are substantially shrinking their potential talent pool; only 38 percent of U.S. adults have a four-year degree. These degree requirements and employers’ mixed messages about what’s actually needed for job eligibility caused half of all recent graduates not to apply for entry-level jobs because they didn’t feel qualified.
While employers continue to implement outdated degree requirements, they seemingly contradict themselves by ranking skills training credentials (43 percent) and real-world experience (28 percent) more important than a two- or four-year degree (26 percent) when considering an entry-level candidate.
“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. This outdated mindset and degree stigma is not only widening the labor gap, it’s costing businesses time and money and turning away potential talent,” said Michael Hansen, CEO of Cengage Group.
And change is slow with just one in 10 employers (nine percent) saying they don’t require a degree to apply for entry-level jobs. Nearly half (48 percent) of employers who don’t require a degree say it’s because they believe candidates can attain the proper skills through life experience, internships, skills training credentials, stackable credentials and hands-on experience outside of an institution.
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