Why Are Companies Cutting Out College Degree Requirements?

A growing trend reveals more than 60% of employers have eliminated the requirement for college degrees. The next five years could see up to 1.4 million open jobs for Americans without degrees.

The Burning Glass Institute analyzed over 51 million job postings to better understand the structural and cyclical resets that have reduced degree requirements in almost one million jobs. Over the past two years, a “predictable shift in the mix of occupational hiring” has uncovered two types of change among middle-skill and high-skill roles, according to the 2022 report.

The list of major companies to drop these requirements include General Motors, Kellogg’s, Dell, Bank of America, Google, Okta, IBM, Walmart and Delta Airlines. Walmart said its decision is in line with revising corporate job descriptions to reflect that “there are many roles where a degree is simply unnecessary, including at corporate headquarters.”

According to data, there is more evidence showing IT and managerial occupations have adopted a structural reset as they feature “significant technical or analytical requirements.”

For example, the share of postings stipulating a bachelor’s degree for Telecommunications Engineering Specialist declined from 66% to 58% between 2017 and 2019.

On the other hand, since the start of the pandemic, cyclical resets removing degree requirements occurred in 27% of occupations including critical care nurses or registered nurses in the health care sector.

“Those occupations usually require specific credentials other than a traditional higher education degree, including health-specific certifications, state-licensing requirements, or certain measurable skills,” the analysis read.

For example, in 2020, the share of postings seeking registered nurses with a bachelor’s degree  requirement declined by 5 percentage points compared to 2019, from 38% to 33%.

What do employers want?

The Burning Institute’s analysis of 33 million job postings between 2017 and 2019 shows that employers that cut credential requirements also sought job candidates with a “wider and deeper set of skills than were required previously.” Today, employers are requiring potential candidates to possess soft or social skills such as communication and conflict resolution.

Why is college enrollment decreasing?

The last few years have seen some of the smallest tuition increases in decades. Only about 1 in 6 students actually pay the sticker price at a four-year institution. In fact, a June poll by Gallup found that just 36% of Americans have confidence in higher education, down more than 20% from eight years ago.

How fast is school tuition rising?

Last year, the average tuition at American private colleges rose to 4%, according to data collected by US News & World Report. For a public in-state school, that cost was $10,500, that’s an annual increase of 0.8% for in-state students and about 1% for out-of-state. Insider documented the reported tuition and room and board costs of ten public colleges have has increased faster than tuition costs. The 25% rise does not account for inflation.

What is driving the increase in school tuition?

The price of faculty and administrators went up. A recent study by the American Council of Trustees and Alumni. That type of spending grew by 29% between 2010 and 2018, compared to a 17% increase in spending on instructional staff. State legislatures are contributing less to public education and lifted degree requirements for government jobs, according to to the Brookings Institution.

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