As Companies Drop Diplomas For More Jobs, Few Workers Without Degrees Are Getting Hired For Them: Report

With great fanfare, companies have been dropping four-year degrees from their job ads, turning the concept of “skills-based hiring” into a bonafide buzzword. In September, Walmart announced it planned to remove diploma mandates from hundreds of corporate jobs. In June 2022, General Motors said it was dropping the four-year degree mandate for many jobs. Earlier that year, Delta Air Lines made headlines for removing degrees as a precondition when hiring pilots.

But a new report aims to answer a question that has been looming over the “skills-based hiring” movement since it began: Companies are dropping degree requirements, but how much are they actually hiring people without diplomas into those jobs?

The answer: Not very much yet, at least overall. That’s the finding of a new report from Harvard Business School’s Managing the Future of Work Project and the Burning Glass Institute, a nonprofit research organization that studies the workforce. It found that while results vary widely by company—with some making serious strides and hiring non-degreed workers in real numbers—in the aggregate, progress has been decidedly slow.

For jobs where the researchers could see that degrees had been removed from postings and where enough hiring had taken place to get a credible sample, the researchers estimate that firms increased the share of workers hired without a BA by only about 3.5 percentage points.

Looking at the full job market—rather than just the tiny 3.6 percent of roles that met criteria for their sample—the impact is far smaller. Overall, researchers saw a net change of only about 0.14 percentage points in the incremental hiring of candidates without degrees, meaning the promise of “skills-based hiring” impacted less than 1 in 700 hires last year.

“What this shows is that it’s really hard to convert sincerity to actual hires,” says Matt Sigelman, president of Burning Glass Instutute, and a co-author of the report.

The report used data from labor market analytics firm Lightcast to analyze 316 million unique online job postings since 2012, focusing only on 11,300 roles—specific job categories at specific companies— that met its criteria. It then matched the data from these job postings to a database of more than 65 million career histories, populated from online profiles and resume databases, to summarize education levels, see who is hired into identified roles and aggregate results.

The good news: The report found a nearly fourfold increase in the jobs where degree requirements had been removed since 2014. That means companies are taking steps in the right direction, says Joseph Fuller, one of the report’s co-authors and a professor at Harvard Business School who co-leads the HBS project. But following through on making those hires is much harder.

“Process eats policy for lunch,” says Fuller. “You can have all the policies you want about diversity imperatives, around removing extraneous job requirements like degrees. … But that doesn’t mean an individual hiring manager who’s looking at three [similarly qualified] candidates—one of whom has a college degree and two of whom don’t—doesn’t default to the more credentialed candidate.”

The report analyzes what’s become an especially hot topic among corporate H.R. leaders as they’ve tried to solve persistent labor shortages at the same time pressure has grown to boost employee diversity. The idea behind “skills-based hiring” isn’t to dispense with degrees for jobs that need them, such as accountants, engineers or lawyers, but apply it to roles like sales supervisors, computer support specialists or insurance claims adjusters who might have gained needed skills through on-the-job experience, online learning platforms or alternate pathways like certificates. A survey of 2000 companies by the job marketplace ZipRecruiter in late 2022 found that 45% said they’d gotten rid of degree requirements for some roles in just the past year.

It’s a reversal of sorts after decades of “degree inflation,” when companies added diploma mandates for jobs that didn’t need them as more and more Americans graduated from college. Fuller believes companies remove degree requirements out of genuine hope it can help with talent shortages or boost diversity—but says some may have jumped onboard amid pressure from employee groups, boards of directors or after watching competitors make similar moves without fully recognizing the challenges. “I’m hesitant to say there’s ‘virtue-washing’—I really don’t think companies are cynical about this,” says Fuller. But “it’s easy for companies to make the press release or say something at an all-hands meeting or a town hall or in the annual report.”

Executing on it is harder. Based on the data, the researchers divided companies into three groups, and a little over a third of the companies in the data set, or 37%, made real progress, hiring 18 percent more non-degreed workers into jobs that previously required degrees, on average, over the period studied. Many companies in this group were smaller firms, but the report names companies like Walmart, General Motors and Yelp as “leaders” in skills-based hiring and part of this group.

Others haven’t made as much progress. The largest group—some 45% of companies in the data set—made little to no strides in hiring workers without degrees into jobs that once required them, the report said. At companies like Oracle or Lockheed Martin, the report cited, researchers saw little change in hiring patterns. The remaining companies—the report cites names like Delta Air Lines and Nestle—showed initial progress in hiring non-degreed workers, but then appeared to backslide, with numbers returning to prior levels.

A Delta spokesperson said the company is not seeing the same trend in the aggregate, and that its numbers will look different as it hired at an unprecedented level during the pandemic’s recovery. In an emailed statement, the company said it is “proud of and remains committed to our skills-based talent strategy that has removed barriers to entry and broadened our talent pools. Our focus is hiring the best candidates for every role – regardless of where they acquired the skills.”

In an emailed statement, a Lockheed Martin spokesperson said “we are committed to our core values of doing what’s right, respecting others, and performing with excellence,” noting “we invest in the right outreach efforts to hire the best talent to reflect our community” and work “to build a workplace that drives innovation and embraces diverse perspectives.” Oracle and Nestle did not immediately respond to emails from Forbes.

Sigelman says because the study controls for specific roles at specific companies, broader economic shifts shouldn’t affect the analysis, and any underrepresentation of certain career histories should be similar across employers. “What we’re seeing here reflects the hard work that’s required to translate policy changes to field-level practice,” he says. For Sigelman, it comes down to “systematizing processes,” noting, for example, that some firms are asking candidates for more work samples or to undertake small projects to help assess specific skills.

Fuller, meanwhile, suggests it’s important for companies to look for ways to expand their applicant pool if it doesn’t have enough non-degreed workers in it, and to track their progress to see how they’re performing. Without that data, people slip into old habits, and it’s hard to see what’s happening on the ground from the top. All too often, “the more senior you are in the company, the more you assume the policy changes you’ve announced will just happen.”