'In name only': Firms dropping degree requirements fall short in practice

Only 37% of employers actually changed hiring outcomes: survey

'In name only': Firms dropping degree requirements fall short in practice

The number of employers dropping degree requirements in hiring might have expanded over the past years, but a new report has found that only 37% of them have seen actual changes in hiring outcomes.

The Harvard Business School and Burning Glass Institute recently analysed a sample of 11,300 roles at large firms that removed their degree requirement over the past decade.

"Overall, by our estimates, that has translated to new opportunity for only approximately 97,000 workers annually, out of 77 million yearly hires," the report said. "Put differently, for all its fanfare, the increased opportunity promised by Skills-Based Hiring has borne out in not even 1 in 700 hires last year."

Nearly all the actual hiring was carried out by 37% of the firms, which the report classified as "Skills-Based Hiring Leaders," who also increased their share of workers hired without BAs by nearly 20%.

One-fifth of the firms analysed only made short-term gains after dropping degree requirements and ended up hiring a smaller share of workers without BAs in the long run, according to the report.

Approximately 45% of the firms seem to make a "change in name only," according to the report, noting that these organisations made "no meaningful difference" in actual hiring behaviour despite removing degree requirements from job postings.

"Deeper analysis of actual hiring patterns suggests a wide gap between intent and impact," the report read. "Simply dropping stated requirements seldom opens jobs to those who don't have a college degree."

"As a result, most companies' commitment to Skills-Based Hiring manifests itself primarily at the level of policy."

Benefits of skills-based hiring

The need to drop degree requirements became more prominent over the past years as employers struggled to find qualified employees for their vacant roles, with non-degree holders becoming a viable talent pool for recruiters.

"At the same time, a growing focus on equity commitments has caused employers to question practices that likely contributed to suppressing broader representation," the report said.

Employers who were successful in changing their hiring practices saw benefits in for the organisation and for employees, according to the report.

"At Skills-Based Hiring Leader firms, non-degreed workers have a retention rate 10 percentage points higher than their degree-holder colleagues," the report said.

Non-degreed employees hired into roles that previously required degrees also saw a 25% salary increase on average.

"This win-win outcome suggests that Skills-Based Hiring should continue to gain momentum, despite its slow start," the report said.

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