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As the competition to discover and lure top tech talent heats up, some of the world’s top tech companies have found great success by rethinking a longtime requirement in their search for skilled workers: the college degree.
Recent studies by LinkedIn and Glassdoor found a number of leading companies have ditched their requirements for a four-year college degree, including Google, Apple, IBM, Nordstrom, Costco and Bank of America. That’s in line with recommendations from experts like those at the Harvard Business Review, which declared in 2017 that “competency is more important than credentials” and warned of how degree requirements could threaten the economy.
Put simply, a bachelor’s degree is no longer a barrier for entry to work at the world’s top companies.
“When you look at people who don’t go to school and make their way in the world, those are exceptional human beings,” said Google’s former senior vice-president of people operations, Laszlo Bock. “And we should do everything we can to find those people.”
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Why has there been such a dramatic shift in educational expectations? Here are some of the reasons tech workers no longer need a college degree to thrive in their field.
It’s All About Skills
In an influential 2016 letter to U.S. President Donald Trump, IBM President and CEO Ginni Rometty described the rise of “new collar” jobs and the shifting skills requirements to excel in those positions.
In 2017, IBM’s vice-president of talent Joanna Daley told CNBC Make It that about 15 percent of her company’s U.S. hires don’t have a four-year degree and that the tech company now looks at candidates who have hands-on experience through bootcamps or industry-related vocational classes.
“Getting a job at today’s IBM does not always require a college degree; at some of our centers in the United States, as many as one-third of employees have less than a four-year degree. What matters most is relevant skills, sometimes obtained through vocational training,” Rometty wrote.
“In addition, we are creating and hiring to fill ‘new collar’ jobs – entirely new roles in areas such as cybersecurity, data science, artificial intelligence, and cognitive business.”
Excelling in positions such as those often requires highly specialized training that is in line with the absolute latest industry trends, which isn’t necessarily a strength of large colleges with rigid four-year curriculums.
For example, HackerRank’s annual survey of student developers attending college found that only 32 percent reported learning to code in school, with 27 percent saying they were self-taught.
“More businesses should overhaul their outdated practices and stop pretending that when it comes to the skills they need in employees, there’s any correlation between a degree from one of the nation’s elite schools and high performance,” said Upwork CEO Stephane Kasriel.
That explains why a LinkedIn study found that companies including Apple, Oracle, and Google often ask either for a degree or “equivalent practical experience.”
“The four-year degree isn’t gone altogether but we’re starting to see a shift in what these companies are looking for,” said Laura Lorenzetti, editor at LinkedIn. “There’s a growing emphasis on skills over school as they compete for top talent. People still see the four-year degree as a signaling factor but companies are taking experience as seriously as a four-year degree.”
A Tech Talent Shortage Has Employers Rethinking Their Priorities
By now, you have surely heard about the industry-wide– and ever-growing – demand for tech talent and that there are simply not enough skilled workers to meet it. The U.S. Bureau of Labor Statistics is forecasting the employment of computer and information technology professionals to grow by 13 percent by 2026 – faster than the average for all occupations. Meanwhile, a recent report from G2 Crowd found that 80.8 percent of employers reported that it’s more difficult to fill positions now compared to 2015, while 51 percent said that the difficulty owed to a lack of talent.
IBM has felt that crunch.
“We’ve got a massive skills gap across the tech industry, so people with non-traditional backgrounds are really becoming valuable,” said Kelli Jordan, talent leader for IBM’s New Collar Initiatives program. “You don’t need to go get a computer science degree to be a web developer. You can learn those languages in a variety of ways.”
In the past, a phenomenon called “degree inflation” led to many companies requiring degrees for jobs that had traditionally been filled by workers who didn’t have one.
A 2014 report from Burning Glass Technologies looked at the scope of degree inflation by comparing the number of people in a certain occupation who have a degree to the number of job postings requiring one. The report found a credentials gap of 26 percent for management jobs, 21 percent for computer and math jobs, and 13 percent for sales jobs.
With a glaring shortage of talent in tech, it would be self-defeating for companies to exclude so many skilled workers because they don’t have a credential that might not even be relevant to their job.
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“For decades, at many companies that I worked for, I wasn’t allowed to hire unless somebody had a four-year degree,” said Trish Torizzo, chief information officer for Houghton Mifflin Harcourt, which recently dropped its degree requirement for applicants.
“(Now) supply is so low that people are almost being forced to think more creatively about how they operate.”
It Creates a More Inclusive Environment
Ottawa-based eCommerce giant Shopify has never demanded a college degree in its job postings.
“We don’t require any background or a specific amount of experience in any specific field. Instead, we want someone who can make an impact,” said Shopify’s director of talent acquisition Anna Lambert, who noted that after seven years – and 3,000 hires! – she has seen a major shift in the industry.
“There’s less focus on experience and more on your ability to do the job.”
In fact, Lambert’s recruitment team includes someone who used to be a welder – a background she says is “very different, but somehow totally applicable.” She suggests that instead of asking prospective employees for a specific experience and deciding they aren’t qualified, try to make all people feel welcome and consider where their strengths might lie.
“A more inclusive job posting will show that you know experience comes in all forms – and you want that,” Lambert said.
Taking a more open-minded approach to educational requirements could also help to reverse the tide of an ongoing crisis in tech: a lack of diversity.
Colleges in the U.S. and around the world continue to struggle with inequality and a lack of diversity among their student populations. That mainly owes to economics; while 83 percent of students from high-income families in the U.S. enroll in college, only 63 percent from low- and middle-income families do the same.
That’s part of what motivated Upwork to drop their degree requirements for new hires.
“Increasingly, four-year universities produce too few graduating classes that are reflective of the country’s racial, social, and economic diversity,” said Upwork CEO Stephane Kasriel. “Because of their soaring fees, colleges are pricing themselves out of reach for many Americans. As a result, businesses are in danger of being walled off from huge sections of America’s talented pool.
“The people who may be shunted to the margins of the labor market won’t be disqualified for lack of intelligence or skill, but because they simply can’t afford to pay for school.”
In fact, a 2017 research project from the Harvard Business School determined that employers “appear to be closing off their access to the two-thirds of the U.S. workforce that does not have a four-year college degree.”
The problem is only getting worse as college becomes more out-of-reach for many Americans; average annual tuition costs at four-year universities more than doubled between the 1985-86 and 2015-16 academic years, from $12,052 to $26,120 after adjusting to inflation.
“If education becomes unaffordable for most and companies continue to require college degrees, we’ll perpetuate a system by which those companies will only hire from a relatively small and privileged group of graduates,” Kasriel said. “That makes no business sense for a country that’s already suffering from a painful lack of know-how in many crucial tech sectors.
“It also isn’t fitting for a country known as the land of opportunity.”
A Lack of Value
Both employers and workers alike are complaining that the four-year college degree isn’t necessarily bringing an adequate return on investment.
We’ve covered the high costs of a college education already, and the results aren’t necessarily always there. According to the 2018 Freelancing in America survey, 93 percent of freelancers with a four-year college degree said skills training was useful for the work they currently did, compared to only 79 percent who said their college education was useful.
A 2018 DigitalOcean survey found that bootcamp grads heading into a software engineering position felt “much better prepared for the real world” than four-year college grads, by a margin of 61 percent to 36 percent.
And that perceived lack of value goes both ways. From an employer’s perspective, Harvard’s report found that degree-holders command an 11-to-30 percent wage premium, but fail to justify that premium in productivity or other outcomes.
In fact, the report found that college graduates filling these positions “are costing companies more money to employ, tend to be less engaged in their jobs, have a higher turnover rate, and reach productivity levels only on par with high school graduates doing the same job.”
It Can Improve the Lives of Their Workers
Certainly, there are plenty of great reasons to pursue a college education. But getting a degree only because it seems like a prerequisite to finding a job isn’t one, and crushing student debt is taking a huge toll on the American workforce.
In total, 44.2 million Americans are now carrying student loan debt, and those Americans owe more than $1.48 trillion collectively – roughly $620 billion more than total U.S. credit card debt. Research from Citizens Financial Group showed that 60 percent of student debt borrowers can expect to pay off their loans in their 40s, while another study suggested that Wisconsin university graduates take on average 19.7 years to pay off a bachelor’s degree.
While tech companies compete to offer their employees the best packages of benefits and perks, there’s certainly something to be said for a workforce who aren’t buried under a pile of debt.
Follow the Leader
Industry trends often start at the top, and when it comes to loosening or dropping degree demands – to put it simply – all the biggest companies seem to be doing it.
As we mentioned, a recent LinkedIn study showed that many of the companies listed among its 2019 LinkedIn Top Companies in the U.S. no longer require a degree, including Alphabet (Google’s parent company), Netflix, Airbnb, Facebook, Oracle, Dell, and, of course, Apple.
In fact, Apple CEO Tim Cook recently said that about half of Apple’s U.S. employment in 2018 was made up of people who didn’t have a four-year degree.
He stressed instead the need for certain in-demand skills; in Apple’s case, that skill is coding.
“As we’ve looked at the…mismatch between the skills that are coming out of colleges and what the skills are that we believe we need in the future, and many other businesses do, we’ve identified coding as a very key one,” he said.
That certainly makes sense given that Apple’s Steve Jobs famously founded the company after dropping out of college.
“Our company, as you know, was founded by a college drop-out,” Cook said. “So we’ve never really thought that a college degree was the thing that you had to do well. We’ve always tried to expand our horizons.”
By the way, Jobs wasn’t the only tech trailblazer who didn’t hold a degree. The same could be said of Uber’s Travis Kalanick, Dell’s Michael Dell, Facebook’s Mark Zuckerberg, Twitter’s Jack Dorsey, and Whatsapp’s Jan Koum.