Employer Demand for Degrees is Declining. What Does This Mean for Higher Ed?
The hot job market may be cold news, but it remains a pressing issue for HR departments in nearly every industry. As employers struggle to fill open positions, human resource experts are advising they do two things: drop bachelor’s degree requirements and move to skills-based hiring. Many companies are heeding this advice, and the percentage of jobs requiring a four-year degree is shrinking. This could spell trouble for higher education.
The question is: How much trouble? In 2017, 51% of open jobs required a bachelor’s degree. Now, that number is at 44%. As colleges and universities deal with declining enrollments made worse by the pandemic, the labor market’s changing criteria suggests that things won’t get better any time soon. Many in higher ed are worried things might get worse. Below, we explore the recent decline of the bachelor’s degree to understand what, exactly, this might mean for higher education.
What’s Behind Declining Degree Requirements and the Rise of Skills-Based Hiring?
The easy answer: Too many jobs and not enough workers to fill those jobs. Currently, there are over 11 million open jobs and only 5.7 million unemployed Americans. Most people agree that the pandemic, which prompted the great resignation/reshuffling, is largely at fault. But data suggests that quitting rates have been increasing exponentially since 2009. Recent hiring rates have supposedly picked up faster than resignation rates, but employers have added millions more jobs and millions of workers haven’t returned to the workforce.
This has created an employment crisis in many industries, and HR professionals are being advised to widen their nets. Given that 44% of the labor market require degrees but only about 35% of the U.S. labor force had a bachelor’s degree, it makes sense that companies wanting to fill positions quickly would drop education requirements in favor of skills.
Is Dropping Degree Requirements Ultimately a Good Idea?
This entirely depends on who you ask. Proponents of the liberal arts would say that reducing the importance of a four-year degree will harm the tenets of a liberal arts education. They worry that current conversations linking a college education’s ROI to monetary value miss the point. The aim of higher education is to educate: to learn to think critically, understand others, and seek out what is true.
But in examining the immense college debt most degree holders have, a four-year education is financially impossible for many. If you ask workers whether dropping bachelor’s degree requirements is a good idea, they’re more likely to say yes. It opens job opportunities that would have otherwise been closed to them. It allows them to make good money without going into educational debt.
Many employers are jumping on board with removing the bachelor’s degree requirement, as it allows them to fill open positions more quickly. They can pull from a wider demographic pool and create new and innovative work environments.
What Does Dropping Degree Requirements Mean for Higher Education?
Those in higher education who aren’t worried might want to start paying attention. Not only are enrollments down, but so are FAFSA renewals. Students are leaving college for the workforce. The debt accrued by attending a four-year institution is immense. If employers are dropping degree requirements, it doesn’t matter how much a learner might want to advance their education; they can’t afford to put off entering the current labor market.
But the fact remains that those with a college degree still out-earn those who don’t. According to a study conducted by Georgetown University’s Center for Education and Work, a full-time, full-year worker with a high school diploma will earn an average of $1.6 million in their lifetime. Bachelor’s degree holders earn a median of $2.8 million throughout their career.
It still pays to get a degree, and if these numbers persist, many institutions will weather current job market trends. But many may not. Deeply impacted by a decade of enrollment declines, many schools cannot afford to wait until current employment trends change.
How Colleges and Universities Can Respond to the Decline in Degree Requirements
As the decline in degree requirements coincides with the rise in skills-based hiring, the solution for colleges and universities is straightforward: Invest in skills-based learning.
This is not to say an institution should revamp a liberal arts or core curriculum to focus solely on skills-based learning and job training. But institutions should consider using their resources to create opportunities for students to develop skills. Traditional students enrolled in a four-year institution can advance skill sets alongside their traditional coursework. Non-traditional students, employees, and lifelong learners can enroll in off-base courses.