Many of the largest companies in the market with the largest workforces in the country are promoting non-degree jobs and are removing degree requirements from more job postings. The idea of hiring based on skill rather than completing a college education for specific roles has become more widespread at a time when many workers are underemployed and the economic value of a college degree is being questioned by more Americans.
But as data emerges about employment without degrees, there are signs that some of these efforts may be insufficient.
a New report from the Burning Glass Institute and Harvard Business School focuses on how companies are stacking up in their efforts to hire workers without degrees. This is important for workers in the United States, more than half of whom do not have college degrees, because it affects their ability to obtain higher-paying jobs and better roles.
The overall number of companies encouraging efforts to hire people without degrees does not mean that these workers actually get the jobs, and in fact, there is limited public evidence so far to support how companies' efforts are shaped. Research conducted by Burning Glass is an attempt to measure this. It is based on limited data and does not take into account alternative paths that people without university degrees use to join organizations, such as apprenticeships and internships. But it's still a quick look at how some of the largest U.S. employers are advancing their efforts to hire more workers based on skills versus educational attainment.
“Unfortunately, what we've found is that, for the most part, employers are still hiring the same people they were before,” said Matt Siegelman, president of the Burning Glass Institute, which provides data-driven research on work-related topics.
More than 60% of workers in the United States do not have college degrees
The move to hire people without degrees is important given the large number of people who fall into this bucket. U.S. Census Bureau data shows that about 62% of Americans do not have college degrees. The pressure to hire more of these workers does not apply to low-level jobs that never require a degree or professional positions such as doctors or lawyers. What's at stake here are middle-class jobs like construction managers, sales supervisors, web developers, cybersecurity, and IT help desk specialists. These jobs typically require certain sets of skills and training, but not necessarily a four-year degree.
Knowing how certain companies stack up when it comes to skills-based hiring is important for workers “because it tells them where they're likely to get a fair shake,” Siegelman said.
There are also benefits for workers in terms of pay. The study found that when workers without a college degree move into a job that previously required a college degree, they receive a salary increase of about 25%, on average. This amounts to more than $12,400 in additional earnings per year.
Workers who want to know how specific companies or sectors compare can use American Opportunity Index To compare them based on factors such as hiring, pay, promotion, parity and culture. It rates companies on a scale of 1 to 5, 5 being the highest, and focuses on jobs available to those without a college degree. The index is a joint project between the Burning Glass Institute, the Future of Work Governance Project at Harvard Business School, and the Schultz Family Foundation.
Joseph Fuller, professor of management practices at Harvard Business School, recommends that job seekers use the index to compare companies in the same sector as there can be significant differences in the hiring and promotion practices of workers without degrees. Fuller said he did not doubt the management-level commitment of any of the companies mentioned in the report, but said political statements can only go so far. “They can declare good intentions, but they have to implement those good intentions,” he said.
Ranking of Walmart, Apple, GM and others
Burning Glass researchers conducted the new study due to the growing number of employers eliminating degree requirements. Data they previously tracked. The latest findings confirm that companies' desire to expand opportunities for non-degree holders does not necessarily translate into daily practice.
The observations in the study are based on a database of the employment histories of 65 million US workers, who Burning Glass says represent about 40% of the US workforce. The 11,300 roles included in the sample are those where researchers say they can observe a high volume of hiring for at least one year before and after the company eliminated degree requirements.
The researchers focused on large companies in which they observed more than 500 unique job postings per year. The sample included roles from 1,134 different companies. He said the companies mentioned in the report were those for which researchers had “strong data coverage.”
Only 37% of the companies analyzed have made tangible changes in their hiring practices. These leaders included large employers such as Koch Industries, Walmart, Apple, General Motors, Target, Cigna, Tyson Foods, ExxonMobil, and Yelp.
The fact that some highly successful companies have meaningfully changed their hiring profile suggests that it's not a talent shortage that's holding back skills-based hiring efforts, Siegelman said. Rather, it implies that managers may be reticent to hire people without college degrees, in the absence of specific policies to evaluate the skills of these workers. If there are two candidates — one with a college degree and one without — “for many hiring managers, many hiring managers will feel at risk,” he said.
Bank of America, Amazon, Oracle and others are under scrutiny
The largest group of companies in the study – 45% of the sample – removed degree requirements from job advertisements, but showed little change in actual hiring patterns, the researchers said. Companies in this group include Bank of America, Amazon, Oracle, Lockheed Martin, Kroger, and Stellantis.
Companies cited for not pursuing significant hiring told CNBC they either could not verify the data, disputed the researchers' conclusions, or pointed out measures they had taken to improve skills-based hiring.
“Although we cannot verify the methodology of this survey based on the information shared, the conclusions are not accurate,” an Amazon spokesperson said via email. “There are a large number of jobs at Amazon that do not require a college degree.”
For its part, Bank of America reported that about 40% of its 2023 hirings were filled by candidates without four-year college degrees, a number the banking giant said has been increasing in recent years.
Lockheed Martin noted its five-year commitment to creating 8,000 apprenticeships for skilled workers through technical apprenticeships, mid-career development programs, new college hire rotations and internships — a goal it achieved one year ahead of the plan.
Stellantis said its approach includes looking at doing more skills and competency-based assessments, which broadens the candidate pool and increases retention. “Examples in our software department show how we strive to hire candidates based on their skills and not just their educational background,” a company spokesperson said via email.
Oracle and Kroger did not respond to email requests for comment.
Nike, Uber, Delta, and the risks of “downturn.”
The researchers called the last 18% of the companies included in the study “return companies.”
These are companies that made initial progress after removing degree requirements, but later relapsed. Declining companies cited by researchers include companies such as Nike, Uber, HSBC, Novartis, Delta Airlines, Myer, and US Foods.
A Meijer spokesperson would not comment on the study itself, but said via email that it “has never made any commitment regarding hiring team members with or without degrees due to the wide diversity of roles within our company.” The spokesperson also pointed out the educational benefits it offers, which include free college education that all team members can take advantage of when they are hired, with no waiting period.
“The report’s narrow focus fails to understand the precise impact of skills-based hiring, and ignores the multi-faceted strengths that our approach unlocks to create a high-performance culture and exceptional experience for our colleagues,” an HSBC spokesperson said via email.
Delta said the data cited in the report is not a trend it sees overall and that it remains committed to skills-based hiring. “Our focus is on hiring the best candidates for each role, regardless of where they acquired their skills,” a company spokesperson said in an email.
Nike, Uber, Novartis and US Foods did not respond to requests for comment.
Tips for career success without degrees
Researchers have identified several common patterns among leaders in skills-based hiring, which they say can help others boost their success. “They call attention to people throughout the organization who are crushing it without grades,” Siegelman said. “This removes some of the stigma and makes it less risky for hiring managers to take a chance on hiring someone without a college degree.”
Companies that have succeeded in hiring based on skills also clearly communicate the skills a job requires, even before they are posted. According to Siegelman, they ask hiring managers to be specific about the skills they're looking for and also what they might consider to be evidence that someone has acquired those skills.
Additionally, leaders in skills-based hiring have processes to evaluate the skills they are looking for. For example, they may ask job opportunities to submit projects for candidate review by hiring managers. This allows companies to evaluate “essentially who did the best project without knowing whose work it was,” Siegelman said.
“Devoted student. Bacon advocate. Beer scholar. Troublemaker. Falls down a lot. Typical coffee enthusiast.”