No degree? No problem. Tech firms move away from college requirement for new hires

With a 2% unemployment rate, the tech industry is rethinking what job applicants need to get hired. Skills-based hiring is on the rise, and 59% of employers are considering eliminating college degree requirements — changes that could reshape the IT workforce.

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The tech industry has been hit particularly hard by the pandemic and the Great Resignation, leaving organizations facing a dearth of qualified job candidates for more than 1 million openings.

For all US jobs, the number of openings was at a high of 11.5 million at the end of March, according to the US Bureau of Labor Statistics (BLS). Meanwhile, in each of the past six months, more than 4 million people have quit their jobs, according to the agency.

For technology, the talent shortage is even worse. While the national unemployment rate hovers around 3.6%, for the tech industry it’s 2%, according to CompTIA, a nonprofit association for the IT industry and workforce. That's prompted employers throughout the US to step up their search for workers — and to revisit the qualifications (such as a four-year college degree) they require.

Among middle-skilled occupations, the openings that require college degrees are, for the most part, similar to those openings for which no degree is required, according to a recent study by Harvard Business School’s (HBS) Project on Managing the Future of Work and the Burning Glass Institute.

“Jobs do not require four-year college degrees. Employers do,” the study said.

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That realization is prompting companies to consider a shift in hiring practices that recognizes the nontraditional paths many have taken to develop technology skills — paths that don’t require a degree.

Businesses, government nix degree requirement

In June 2020 and January 2021, the White House announced limits on the use of educational requirements when hiring IT professionals in favor of a skills-based approach.

Last month, employment site Indeed published the results of a survey of 502 employers across the US on how the pandemic has shaped current recruiting and future plans. The results: the majority of firms surveyed are moving toward a more flexible model of candidate recruiting.

“Gone are the days of unnecessary credentials and aspirational job requirements. Instead, we find employers thinking creatively to consider different types of applicants than in the past — a shift that can benefit everyone,” Indeed said in the report.

Specifically, the Indeed survey found:

  • 59% of employers are considering eliminating college degree requirements for hiring.
  • 30% of employers believe removing degree requirements would help them hire more diverse talent.
  • 87% of senior executives say they are not prepared to address skills gaps.

Only about one-third of the US adult population has a college degree, which makes it harder for businesses to hire talent, according to research firm IDC. That's exacerbated by the fact many companies began demanding four-year degrees after the Great Recession of 2008-09, when job candidates were plentiful, IDC said in a 2018 report.

Those standards were expected to be lifted as the economy improved. But even as the labor market has tightened, the inflation in college degree requirements has remained.

Unless a company sets up an internal development program on certifications as career milestones, it’s difficult to identify which ones help make a candidate “otherwise qualified,” according to Cushing Anderson, an IDC vice president in HR research.

There’s little risk in bypassing degree requirements in favor of skills-based candidates, but corporate hiring teams are rewarded for being “risk averse,” or presenting only the best qualified candidates on paper to the hiring manager, according to Anderson.

“The problem is most job postings today still contain a long list of requirements, which can turn away potential job seekers, especially those from nontraditional backgrounds," Jamie Kohn, a research director in Gartner’s Human Resource practice said via email. “Looking ahead, the most successful companies aren’t just reducing requirements — they’re building relationships with alternate training programs to signal their interest to candidates early on."

Some employers are already resetting requirements in a variety of roles, dropping “four-year degree” from many middle-skill and even some higher-skill postings, according to a study by Harvard Business School (HBS) and Burning Glass Institute earlier this year. And while the COVID-19 pandemic accelerated the process, that reset began before the crisis — and is likely to continue.

Skills-based hiring opens the doors to opportunities

Studies have found that when employers drop degree requirements in job postings, they become more specific about skills, spelling out the soft skills that may have been assumed to come with a college education, such as writing, communication, and being detail-oriented.

Tech firns have publicly announced their commitment to prioritize skills over degrees in IT occupations. Several, most notably Accenture, Apple, Google, IBM, and Tesla, have made material changes in job requirements across their organizations, according to HBS and CompTIA. Others have made only modest changes in requirements for specific positions, suggesting that corporate commitments have yet to translate to practical implementation.

“Apple, IBM, Google and Tesla, just to name a few, announced the elimination of the four-year bachelor’s degree as an application requirement,” CompTIA said in its report.

Today, half of IBM’s US job openings do not require a four-year degree, a practice the company started long before the pandemic hit.

Kelli Jordan IBM

Kelli Jordan, director of Career, Skills, and Performance for IBM.

“When you think about requiring a bachelor’s degree for a job, you’re automatically shutting out huge parts of the population,” said Kelli Jordan, director of Career, Skills, and Performance for IBM. “It also helps to make it a more diverse industry. If you’re looking at the Black population, you’re ruling out 72% of that population and 79% of the Hispanic population.

“It’s more about how we’re recalibrating our mindset to think about qualifications differently,” she said.

IBM continues working to reduce the number of job openings that require college degrees, Jordan said. Job candidates with soft skills are far more desirable than those with technical acumen.

“Technical skills, or domain-specific skills, are changing so quickly. The half-life of them, or how long they’re really valid, is shrinking every single year,” she said. “It’s those soft skills that are evergreen. Every role is going to need someone with communications skills, with teamwork skills, with adaptability. Those core skills are what will help people continue to be able to reskill and upskill over time.”

chart2 workforce and learning trends CompTIA

Julie Sweet, CEO of professional services giant Accenture, told Harvard Business Review (HBR) her company began revamping its job requirements about 18 months ago in North America with respect to applicant skills; it then expanded that change globally.

In North America, for example, nearly 50% of Accenture’s job openings do not require four-year degrees. (They used to all require four-year degrees, Sweet said.)

“That immediately opens you up to a broader pool of people that you can hire from,” Sweet said. "And in fact, about 20% of the people we actually hire for those openings do not have four-year degrees. So, we’ve expanded the pool of people who we can go after to fill these jobs."

Accenture added 200,000 people to its workforce during the past 18 months from a pool of 4.6 million resumes, according to Sweet.

“One of the most important things that we look for actually, no matter who you are, is your ability to learn — learning agility,” Sweet said. “We ask a very simple question to all of our applicants, senior and junior. ‘What have you learned in the last six months that was not part of school?’”

Drawing water from your own well

Upskilling or reskilling existing employees is another path companies can take to close the hiring gap. 

“Looking ahead, the most successful companies aren’t just reducing requirements — they’re building relationships with alternate training programs to signal their interest to candidates early on,” Gartner’s Kohn said.

That's important, because 58% of job candidates today say they’ve taken courses in the last year to learn skills outside of their current job, according to Gartner.

In adition, the skills organizations need are changing. According to Gartner, a third of the skills required in 2019 will not be needed by 2024 — and 21% have already lost salience.

chart1 workforce and learning trends CompTIA

“As a result, we’ve seen an increase in reskilling programs for particularly hard-to-fill tech positions, such as enterprise architecture and data science,” Kohn said. “The key is to identify which baseline skills give the best chance of success for developing the needed skills.”

For instance, in addition to basic IT skills, some companies focus on strong business knowledge and problem-solving abilities as qualifiers for a reskilling program.

Skills development is a primary focus in shaping new career pathways at Accenture, according to Pallavi Verma, a senior managing director. The company spends nearly $1 billion annually in learning and professional development for its own employees.

“We invest in continuous learning and development, so our people remain highly relevant, and we reward our people to recognize their skills, contributions, and career progression,” Verma said. “We are skilling at scale. There are 8,000-plus skills in our library that our people can earn, based on their work experience and through certifications and learning opportunities.”

At IBM, the average employee engages in 88 hours of career development training yearly. Any IBM employee can sign up for structured learning or mentorship programs, which pair them with more senior employees who can guide them in career development.

“We rolled it out not long after the pandemic started," said IBM's Jordan. "It created a virtual water cooler. People no longer had the opportunity to meet someone in the office, but they could meet them virtually anywhere in the world and connect to learn about a particular skill to help their career path.”

Companies have also increased stipends to pay for employee education programs. For 2021, 23% of stipends paid by organizations were listed as Professional Development, according to CompTIA. In the first quarter of 2022, that number had almost doubled to 44%.

According to CompTIA, most professional development reimbursement claims are for:

  • Books related to their role and responsibilities
  • Training subscriptions
  • Business courses
  • Leadership courses and books
  • Coding & programming books and resources
  • Membership subscriptions related to role and responsibilities

Companies are also expanding programs to give more employees a base-level understanding of technology. The idea is, if everyone knows a little about IT, you need fewer experts to get the work done, Kohn said.

In the first six months of the pandemic, Accenture upskilled about 100,000 people with programs that lasted from eight to 15 weeks, depending on the skills taught, according Sweet.

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