Tapping into the New-Collar Workforce

It’s no secret that many workers today are stuck in low-paying jobs, unable to advance simply because they don’t have a bachelor’s degree.

Yet, at the same time, many companies are desperate for workers and not meeting their diversity goals either. A recent Harvard Business Review article proposed that the way to alleviate this is for employers to focus on job candidates’ skills instead of their degree status. The authors dubbed this the ‘New-Collar Workforce.’

Drawing on their interviews with corporate leaders and their own experience in academia and the business world, the authors (including former IBM CEO Ginni Rometty) outline a “skills-first” approach to hiring and managing talent that is well worth a read.

“That’s the way it’s always been done”

A 2022 Cengage study into this issue found that although nearly half (43%) of employers recognize skills as a better indication of job readiness than a degree, 62% still require a degree for entry-level jobs.

Their arguments for doing so weren’t particularly compelling. Rather than making a case for the solid foundation offered by a bachelor’s degree, employers offered weak excuses such as requiring degrees “to filter the candidate pool”, or because “that’s the way it’s always been done”. Cengage also points out that employers “struggle to evaluate and define the value of credentials and the value they offer”.

“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”, wrote Cengage Group CEO Michael Hansen. “This outdated mindset and degree stigma is not only widening the labour gap, but it’s also costing businesses time and money and turning away potential talent.” 

Degree stigma and inequality

The term “degree stigma” is apt when considering the impact degree requirements have on diversity. According to Opportunity@Work, adding a four-year degree requirement automatically screens out 76% of African Americans, 81% of Americans in rural communities, and 83% of LatinX workers.

These figures are particularly startling when you consider the diversity and inclusion rhetoric employed by major companies all over America. Hiring organizations are clamouring for diverse workers while self-sabotaging by limiting their access to a diverse talent pool through their insistence on bachelor’s degrees.

There’s clearly a strong case for change but a great deal of inertia to overcome.

Consider taking the following actions:

  • Writing job descriptions that emphasize capabilities, not credentials. Consider removing degree requirements altogether.
  • Asking a recruiter to help you evaluate and define “non-traditional” (e.g., non-degree) credentials.
  • Using online or tailored skills assessments, many of which come with sophisticated evaluation tools.
  • Creating apprenticeships, internships, and training programs for people without college degrees.
  • Collaborating with educational institutions and other external partners to expand the talent pool.
  • Helping hiring managers embrace skills-first thinking and bringing a critical mass of non-­degreed workers on board.
  • Celebrate success stories involving non-degreed workers.
  • Beware of creating a two-tiered system where non-degreed workers only access lower-level jobs. Hire non-degreed workers at the top, too.

What will happen to universities if employers drop degree requirements?

Does this trend toward the New-Collar Workforce mean university degrees will eventually drift into irrelevance?

We’re not worried because there are plenty of encouraging signs that colleges are (slowly) rising to the challenge. For example, many universities are working hard to incorporate more practical, hands-on learning opportunities that focus on developing technical and soft skills that employers truly need. Additionally, more universities are reaching out to industry organizations to form partnerships and better understand the needs of employers to tailor their programs accordingly – and stay relevant.

Top employers have already taken the plunge into the New-Collar Workforce

IBM, Aon, Cleveland Clinic, Delta Air Lines, Bank of America, and Merck are among the companies taking this approach—and demonstrating its benefits for firms, workers, and society.

Let’s hope others emulate.