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Exposing this outdated mindset, Cengage Group’s 2022 Employability Report (Part 2) of 1,000 U.S. hiring decision makers reveals that one of the biggest drivers causing the talent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While employers continue to implement outdated degree requirements, they seemingly contradict themselves by ranking skills training credentials (43 percent) and real-world experience (28 percent) more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 This outdated mindset and degree stigma is not only widening the labor gap, it’s costing businesses time and money and turning away potential talent,” said Michael Hansen,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.
“For a number of fields, including several in-demand industries like healthcare, technology and skilled trades, the future of work – thanks to the accelerating pace of technological change – will not depend only on a degree. It will instead focus on a candidates’ skills, experiences and potential to upskill or train in new fields. Employers need to make changes to hiring practices. However, removing degree requirements is not a simple ‘top-down’ policy change, it requires a full-blown change effort to make sure hiring managers are actually comfortable overturning a decades-old practice,” said Hansen.
Other findings include:
- Closing labor gaps while closing gaps in equity. Of those struggling to find talent, two in three (66 percent) believe that removing degree requirements for open roles would help them find qualified talent to narrow staffing gaps. And while the end goal is finding talent to support business growth, one in four employers (22 percent) say they don’t require a degree because it’s essential to creating fairer employment opportunities.
- Employers struggle to evaluate and define the value of credentials. Before a mind shift can happen, employers need a better understanding of credentials and certifications, and the value they offer. Employers are split, nearly half (47 percent) believe it’s difficult to measure the meaningfulness of certifications or credentials in their line of work because they’re not familiar with them (16 percent) and aren’t sure which certifications or credentials have credibility (36 percent).
- The hottest hiring industries have cold hiring methods. When reviewing entry-level recruitment across three of the “hottest job markets” – healthcare, technology and skilled trades – technology is one of the biggest degree stalwarts with 81 percent of tech employers admitting they require a two- or four-year degree compared to healthcare (50 percent) and skilled trades (57 percent). Considering that there are 3.85 million unfilled IT jobs in the U.S., the tech industry faces the biggest urgency to modify hiring requirements.
- Employers as educators – education benefits become a powerful recruitment tool. Today’s talent expects employers to invest in their continued learning and career development, and most employers (77 percent) say free employer-sponsored education offerings are a differentiator for recruitment and retention in this tight labor market. Three in four employers (75 percent) offer employer-paid/employer-sponsored education opportunities, with 61 percent offering online education opportunities. Outside of providing education, 78 percent of employers say they offer the flexibility needed to pursue education opportunities.
This press release originally appeared online.