6 Lessons I Learned Building a Culture that Recruits for "Skills First" not just Degrees

Recently, I joined Merck CEO Ken Frazier and The Wall Street Journal’s CEO Council to talk about how businesses can take steps internally to foster an inclusive culture. Ken and I have been working through this issue as co-chairs of OneTen, an initiative to hire and advance one million Black individuals in America over the next 10 years into family-sustaining jobs. We talked not only about why building a truly inclusive work culture is better for recruits, better for businesses, and better for society; we also talked about tangible actions business can take to integrate new hires without traditional 4-year degrees.

By making a four-year degree a prerequisite for hiring, we are creating structural barriers to economic opportunity.

Economic opportunity is the best equalizer. Approximately 80 percent of African Americans won’t have a four-year degree by the time they’re 26. And yet, roughly 80 percent of family-sustaining jobs at our companies require a four-year degree on all job applications. These numbers show that we’ll never fix this economic opportunity issue unless we make real changes.

These problems are not new. I trace my close involvement on the issue back nearly a decade, to a time when we at IBM had a lot of job openings, but we couldn’t find the qualified candidates to fill them. As an employer, it’s your responsibility to open new pathways to bring new talented people into your company.  

That’s why IBM invested in recruiting and training new collar workers: to take on valuable, tech-based jobs that don’t require a traditional four-year degree but do require the right mix of skills. From top to bottom, we went through every company job posting to determine if a four-year degree was really necessary to get started; today, 43 percent of IBM jobs no longer require a four-year degree to get hired. 

We also championed the reinvention of education for the digital age through Pathways in Technology Early College High Schools, or P-TECH, a public-education model that provides high school students from underserved backgrounds with the academic, technical, and professional skills and credentials they need for competitive STEM jobs, combining traditional education with the best of community colleges, mentoring, and real-world job experience. The program has been a great success; it will soon operate more than 200 schools in the United States, and an additional 100 globally.

Here’s what we found. During the first twelve months, these new collar hires did sometimes show lower innovation capability. But after that, they demonstrated equal, if not better, job performance compared to those with four-year degrees. In addition, we found our new collar hires stayed with the company longer, and were more loyal.

Over time, I’ve learned that growth and comfort never coexist. Making a dedicated effort to hire more workers without four-year degrees is a commitment that will test your beliefs, so it’s important to get comfortable with being uncomfortable. We were able to find success because I truly believed we were creating higher-performing, more diverse teams, which in turn produced better products.

Here are the six lessons I learned—and tips you can use—for how to build a workplace culture that integrates recruits without four-year degrees and positions them to thrive.

1.    Start in areas where jobs are growing

I recommend starting with the job families that are growing in your company. Many of these jobs don’t require a college degree, such as cloud programmers or software engineers. For cyber security analysts alone, there are more than a million job opportunities.

It’s not just jobs in tech; there are many jobs inside and outside of tech companies that don’t require college degrees, including financial operations, business operations, and many health care positions.

2.    Test for cognitive and technical skills

Even if you don’t require a four-year degree, it is still important to conduct testing for both cognitive and some technical skills among your new hires. In practice, this approach can actually be beneficial in more directly testing an applicant’s aptitude, rather than just their credentials.

For me, this completely changed the way we hire. Our number one hiring criteria became a candidate’s propensity to learn. And it works: research shows when hiring for skill, versus hiring based on a degree, makes it 5x more likely that the person will be successful.

3.    Train your managers to hire and build around a skill-based paradigm

During this transition, it is important to help your managers so they have the tools they need from a hiring and development perspective. Essentially, your company is shifting from a paradigm in which you “buy” skills to one in which you “build” skills. Train managers or create a “License to Hire” so managers are prepared to identify the skills and aptitudes you’re looking for during the hiring process.

One thing to be mindful of is that you’re not creating a two-tier system within your company: one for hires with four-year degrees, and one for those without. This is just a different entry pathway for these individuals’ careers. 

Of note—75% of our hires went on to get college degrees. It’s just proof that these hires always had the aptitude, they just had not yet had the access or opportunity.

 4.    Build a new pathway using apprenticeships

Apprenticeships are a great example of a different pathway for new hires to start their career. They offer valuable experience for new workers to see how someone performs in a given position.

Apprenticeships also offer new hires the ability to earn while they learn. These opportunities are critical for those whose need to support themselves or their family makes it difficult to pursue higher education, even with the aid of grants or scholarships.

5.    Normalize this approach with strong CEO sponsorship

I’ll be honest: you’re likely going to hear pushback and criticism from some people. There will be a perception that you are lowering the standards of the workforce. But, as I’ve seen in my own experience through higher job performance among these hires, that couldn’t be further from the truth.

One of the most important things you can do as CEO is ensure these workers are integrated into the company as full-fledged members of the team. Those of us in a position to actually do something about breaking down systemic barriers have a responsibility to act. This change of paradigm must start at the top.

That’s why OneTen is so important; it’s a coalition of CEOs and companies taking tangible, measurable actions to create new opportunities. If you’d like to help our nation reach its full potential, I’d ask you to consider joining us.

6.    Hire in sizable cohorts — don’t hire 1 or 2, these hires are not an experiment

When I started these efforts, I’d hear “Alright, I’ll take one,” and I’d say “No, you’ll take one hundred.” Going back to the previous lesson, it’s part of how you as CEO can help normalize these people within the company.

During my last year at IBM, 15% of our U.S. hires were new collar hires. The company also had record diversity results. And as I mentioned earlier, these hires demonstrated higher performance, stayed with the company longer, and were more loyal.

It’s important to remember: “we cannot be what we cannot see.” My experience hiring workers without four-year degrees has helped confirm for me that a lack of credentials is in no way the same as a lack of aptitude or skill. Instead, it’s an opportunity to help people see themselves in a position to thrive with the right support.