The Value of the College Degree is Crashing. Here’s How to Fix It.
I had coffee with a friend of mine the other day who recently graduated from college. After the parties and the Facebook posts from aunts and uncles saying, “I’m so proud of you, congratulations!!!” he continued his long hunt for a job. He was first surprised and then merely discouraged to hear at every turn that employers weren’t interested in hiring him.
He was interested in working for a major airline in a summer internship only to be told no because they wanted a Master’s degree for the internship. It was unpaid.
Flustered and discouraged, he admitted to me that,
It seems like my college degree is the new high school diploma.
He may sound entitled, but the thing is, he’s right. The relative value of a degree for employers means less today than ever before.
THE NEW HIGH SCHOOL DIPLOMA
At one time, employers could look at a college degree as a signal that a candidate not only had a great work ethic and a strong sense of follow-through but that they were cut from a different cloth from most average or above-average young people. It signaled something unique about the candidate and made it that they were somebody in whom it would make sense to invest.
As time went on and more people saw that having a college degree was strongly correlated with moving into the middle class, more and more people strived to go to college. Government loan and grant programs subsidized more students, producing more college graduates.
On the face of it, this could mean that there are more qualified workers for the workforce. More people with a greater level of skills, with more follow-through, and with more work ethic than ever should be joining the workforce.
MORE DEGREES, FEWER SKILLS
Despite more people achieving the height of Baby Boomer-success, there’s a real and serious skills gap for employers trying to fill positions. Many college graduates come armed with some loose understanding of theory but few skills and little work experience to put to use. According to the Harvard Business Review:
Last year, 35% of 38,000 employers reported difficulty filling jobs due to lack of available talent; in the U.S., 39% of employers did.
Despite sending more people to college, fewer graduates are equipped to deal with the changing technologies and strategies of the workforce. The HBR goes on to note that the skills lacking in recent graduates are those with which schools cannot by their nature equip people:
[T]here are not major shortages of workers with basic reading and math skills or of workers with engineering and technical training; if anything, too many workers may be overeducated.
TWO PATHS FORWARD
The relative value of the degree ended up meaning less to an employer as more candidates came to the table with them. Instead of the college graduate being an extraordinary young person standing apart from the pack, he became a minimally viable candidate who would need yet another way of differentiating himself.
INFLATION, INFLATION, INFLATION
HR departments and hiring managers, looking for the quickest, most efficient ways to select for the best-equipped candidates continued to use the blunt tool of the degree to sort candidates out. Following the logic that got us to a point of worthless college degrees, some just upped the ante and started requiring more degrees for positions that couldn’t conceivably need one (like the unpaid internship I mention above).
[A] wide range of jobs — in management, administration, sales and other fields — are undergoing “upcredentialing,” or degree inflation. As examples, just 25 percent of people employed as insurance clerks have a BA, but twice that percentage of insurance-clerk job ads require one. Among executive secretaries and executive assistants, 19 percent of job-holders have degrees, but 65 percent of job postings mandate them.
If we want to require degrees for even the most basic entry-level jobs, this is one way of approaching things. Companies with massive hiring departments and little creativity for finding new candidates are already requiring BAs for many unpaid internships. Some even extend this to graduate students, figuring that the most skilled candidates might as well have the highest number of credentials.
But do we really want to require that somebody spend a third of his life in school, apart from the market and the workforce and apart from learning real-world skills before we are willing to hire him? Do we really think that requiring more and more credentials is the best way to foster a highly-skilled and ambitious generation that is capable of the creative thinking and problem solving necessary for 21st century success? If this track of degree inflation continues, you will need a PhD in cleaning studies to get a job as janitorial intern. (We’re not far from this — there are more janitors in the US today with chemistry degrees than there are chemists.)
BUILD A BETTER SIGNAL
We can continue down this path of massive degree inflation and wait for what kinds of talent it reaps, or we can take a different path.
The degree worked as a decent blunt tool for those doing hiring when the cost of finding out whether or not a candidate knew their stuff was so incredibly high. You could never administer an IQ test, an aptitude test, a work assignment, and call all the former employers of a given candidate in a timely and cost-efficient manner.
But a massive technological innovation over the past two decades has made it easier for companies to actually verify talent and find the best without relying on the blunt tool that is the degree. The Internet came along and people could verify their skills and their experience in one simple place. Platforms like LinkedIn, where you are reading this right now, aren’t merely places to put a digital resume and to send connection requests — they’re repositories of verified talent, experience, and skills the likes of which the world has never seen before.
A quick example:
I had a phone conversation with a young man this morning who connected with me on LinkedIn. Before our call, I Googled his name and poked around his profile here to learn a little more about him. In those 5 minutes I learned so much more about his ability to think critically and analytically, write well, execute on projects, and find creative solutions than I would have if I had seen “B.A., Example University” on a job application.
His degree — or lack thereof — was a complete and total afterthought.
If you had told somebody to “build a better signal to employers than a college degree” before the Internet, a select few extremely high-caliber candidates could do that, but most couldn’t because they would have no way of showing off that signal with ease in an application. With the Internet and platforms like LinkedIn, WordPress, Squarespace, and About.me, this is now possible. Now any candidate who is reasonably skilled, ambitious, and competent can build a better signal.
And we are all much better off for it.
This can be done a variety of ways: building independent projects, freelancing, taking up a job with an entrepreneur and building their digital brand out, and so much more. What is important is that there are people out there who can communicate the value they create outside of the schooled context. Requiring higher levels of schooling just to get an entry level job only hurts employers by depriving themselves of this talent.
So what will it be? Will we continue down the path of degree inflation to the point where we’ll need degrees for welders and garbage collectors and janitors? Or will we throw off this antiquated model and accept the fact that some of the most high-caliber candidates can build a better signal?