Are Degrees Dead? It’s Time to Tear the Paper Ceiling and Prioritize Skills

Welcome to The Talent Marketplace by Fuel50. We share exclusive insights on employee engagement, career mobility, talent retention, skills development, talent intelligence, talent visibility, and more to support a successful transformation of the talent experience and help future-proof your workforce.

“College degrees are the top requirement of yesterday’s job descriptions, not tomorrow’s” according to HBR . As skills become the new currency of work – it begs the question – are degrees really dead? And if so, what does this mean for current hiring processes impacted by the paper ceiling?

While the shift from degree-based hiring to skills-based hiring is gaining momentum, many employers are still hung up on degree requirements. Research shows that 62% of employers still require a degree for entry-level jobs, yet over 60% of Americans over the age of 25 have no bachelor’s degree.

This means a whopping 60% of workers are excluded from the job economy – leading to critical talent shortages and rising unemployment rates. It’s high time to tear up the paper ceiling for good and unleash the power of a skills-first workforce.

The paper ceiling explained

The paper ceiling is an invisible barrier that workers without degrees face, including the bias and stereotypes they experience when applying for jobs. Many of these workers have vital skills and knowledge often gained from other avenues such as self-employment, certificate programs, military service, and on-the-job experience. However, they are often held back by one limiting requirement on a job application – ‘college degree required’.

As many as 90% of large companies use some form of automated applicant tracking system to screen resumes, and more than 60% of employers reject otherwise qualified candidates simply because they do not have a bachelor’s degree.

Workers without degrees, now known as STARs for ‘Skilled Through Alternative Routes’ say that the paper ceiling is resulting in a severe decline in their upward mobility, and is exacerbating talent shortages as organizations “struggle to fill millions of 21st century jobs with skilled talent.

“The college degree that was once a bridge to opportunity has become a drawbridge that gets pulled up if you don’t have a bachelor’s degree.”?– STARs

How does the paper ceiling impact employees and organizations?

The paper ceiling limits the possibilities for STARs to maximize their skill sets and progress in their career to gain higher earning potential. Research shows that 30 million STARs could make up to 70% more in salary if they had access to degree-required jobs.?

According to Fair360 , this is especially unjust as many factors can impact whether a person attends college – some out of their control. This can include financial barriers, family obligations, and health issues. They also point out that the paper ceiling disproportionately impacts people of color, with research showing that STARs include the majority of the nation’s Black, Hispanic, essential workers, and military veterans.

Employees aren’t the only victims of the paper ceiling, organizations also suffer from the barriers it creates. These hiring processes overlook millions of workers with in-demand skills simply because they don’t have a bachelor’s degree, leaving organizations struggling to fill critical roles and maintain a strong pipeline of talent.

It also has other long-term effects such as low engagement with existing STAR employees, poor DEIB outcomes, and a longer time-to-hire.

The move to skills-based hiring is underway

To combat the negative impacts of the paper ceiling, leading organizations are pulling focus away from degrees and placing it on a candidate’s skills – a concept known as skills-based hiring. Major companies such as Google, Delta Airlines, Accenture, and Walmart have already committed to challenging the paper ceiling by removing degree requirements entirely from job postings to widen and diversify their talent pool.

This approach is also being taken by state and local governments. The state of Virginia has become the 13th state to remove unnecessary degree requirements for hard-to-fill roles in state government. Three states have already passed legislation around skills-based hiring, with others expected to follow.

This shift to skills-based hiring as opposed to degree-based hiring not only helps find qualified workers in a tight labor market, but also unlocks economic mobility for millions of workers who have been overlooked for decades.

So what does this mean for hiring practices today?

Coming back to the question at hand – are degrees really dead? The short answer is no. Of course, they still hold significant value, especially for jobs that strictly need degree-qualified workers (think medical professionals and lawyers). But in the context of hiring for other critical jobs, degrees must be taken out of the equation.

“Eliminating degrees from the hiring process is critical — but employers must also support formal learning for their employees once hired.” – Forbes

Employers must understand that skills don’t always come in the form of a degree. Today, skills can be acquired from a multitude of other avenues, and that should be embraced. As employers search for talent in today’s fast-evolving environment, skills need to take priority. This means equipping employees with the tools to continuously develop in-demand skills that both they and your business need, to succeed now and in the future.

Looking to start your journey to becoming a skills-based organization? Fuel50’s Skills Transformation Roadmap can help you along the way. Download the roadmap to explore the 4 steps to fast-tracking your skills transformation so you can build a future-ready workforce.