Unveiling the Surprising Truth: Should You Even Bother with a Title?

Eden Heath has a handful of top marks in her A-levels and was headmistress at the South East London school where she just finished her final year. College would seem like a no-brainer to her. But like many of her friends, she thinks it’s a waste of money and she only plans to go as a last resort.

“University has become a backup option for a lot of people,” he said. “Learning is a huge thing, especially in my year group. . . He leaves without debts and with more experience, and they pay him”.

For decades, college degrees have been a must for entry-level professional positions. But there are signs this is changing, as students consider other ways to gain skills and employers offer new pathways to competitive careers.

In the UK, the Institute of Student Employers (ISE) found that the ratio of members requiring a 2:1 degree fell from three-quarters in 2014 to less than half in 2022. A separate analysis by website Totaljobs found that only 22 percent of advertisements UK entry-level employers mentioned a degree this year, a decline of almost a third from 2019. Job postings that didn’t require a degree increased 90 per cent between 2021 and last year, according to LinkedIn.

Employers as varied as cereal maker Kellogg’s UK and the Utah state government have stopped requiring grade-level qualifications. Meanwhile, companies like IBM and Accenture have invested in hiring routes, such as internships, so new hires can train on the job.

Management professor Joseph Fuller, who co-directs Harvard Business School’s Future of Work Management program, applauded companies expanding recruiting beyond graduates. But he cautioned that this was just a first step that wouldn’t change hiring managers’ behavior.

“The fact is that for a lot of companies it’s just a sign of virtue,” he said. “But I think removing degree requirements is smart business and somewhat appropriate.”

Has the value of the university diminished?

Recruitment may be moving away from universities, but companies continue to pay a premium for graduates.

In the US, this “graduate bonus,” the pay raise people with a degree receive, rose from 75% to 81% between 2005 and 2020, according to a Financial Times analysis of figures from the richest nations group in the United States. the OECD. In the EU and UK, graduates are still paid 50 per cent more than people without a degree.

This is despite an increase in the number of graduates, which could potentially dilute the value of a degree in the job market. In the US, 51% of people ages 25-34 were college graduates in 2021, up from 38% in 2000; in the UK, 57% of young adults had a university education in 2021, up from 29% two decades ago.

Stephen Isherwood, chief executive of ISE, said the graduate premium had held up because jobs had become more complex and roles requiring grade-level skills had increased with the number of graduates.

“To be a nurse, to handle technology and deliver different types of medications requires an education at the degree level,” he said. “The same is true for other roles like internal finance.”

The share of highly-skilled roles, which involve complex tasks and require high levels of education or training, has been growing in developed economies for more than three decades, according to the International Labor Organization.

Wenchao Jin, an assistant professor at the University of Sussex, said the growing number of highly-skilled jobs was due to more people holding degrees. “The occupational structure has really adapted to absorb all these additional graduates as the level of education changes.”

Hire for skills, not education

Despite the rise in highly-skilled work, nearly a third of workers in the US and more than a fifth in some large European economies are overeducated for their jobs, according to the ILO. Many graduates are stuck doing jobs that could be done by non-graduates.

This can be partly attributed to employers advertising that less-skilled positions require a degree, even if they don’t.

In the US, for example, two-thirds of production supervisor jobs called for a college degree in 2015, despite only 16% of people already holding the position having one, according to a study by the School of Business from Harvard. It found that this resulted in harder-to-fill positions, higher turnover rates, and more expensive hires, leading to worse results for companies.

The fear of not being able to find a position that matches his qualifications is one reason Heath hopes to opt for a digital marketing apprenticeship instead of university. With annual tuition fees of over £9,000, paid through salary deductions over your working life, cost is another.

“It scares me a lot,” he said. “If I got a degree and came back and no one was interested in hiring me, I would have wasted four years and all that money.”

This reflects a broader change. Less than half of Britons believe that a career is worthwhile for a young person, according to a study this May by the Ipsos pollster.

Targeting non-graduates

In some countries, political decisions have driven the recruitment of undergraduates.

The UK apprenticeship fee requires employers to spend a portion of their payroll on training. Since it was introduced in 2017, highly-skilled employment rates for undergraduates have risen nearly five percentage points.

IBM began hiring trainees in 2010 as part of a broader expansion of undergraduate recruitment. Degrees are required for just 12 percent of jobs advertised in the UK and less than half of those in the US, the company said.

Jenny Taylor, IBM’s early professional program leader, said it initially seemed “a bit risky” to hire 18-year-olds for customer service roles. But the recruits “have shown us time and time again that they can get it right from the start.”

By the time they were in their early twenties, apprentices already had several years of on-the-job training, he added, putting them ahead of hired graduates. They also have the best training ground for developing “deeper” technical skills, such as artificial and quantum intelligence.

Some companies view undergraduates as vital to inclusion efforts. Penguin Random House UK, for example, dropped degree requirements in 2016 and said its workforce had diversified as a result.

“We wanted to remove the barriers that were preventing people with the skills and potential from succeeding,” said Claire Thomas, the company’s director of organizational development.

skills for the future

The rapidly changing demand for skills could also drive the need for degrees.

Nearly a quarter of jobs will be disrupted in the next five years, employers say surveyed by the World Economic Forum. Less skilled roles are at higher risk, but transferable skills such as creative and analytical thinking were expected to increase in importance.

These and other skills, such as social intelligence or complex problem solving, are honed with a college education, said Fuller, a Harvard professor.

In a report published this month, Universities UK, which represents higher education institutions, projected that 88 per cent of new jobs would be at postgraduate level by 2035. Universities, it said, “play a very important role not only in preparing graduates for employment, but also in teaching them crucial, transferable life skills” and growing the economy.

However, Fuller added that new technologies such as artificial intelligence could also be a “level setter,” helping undergraduates overcome deficits in skills like writing, where they have historically underperformed.

They could also allow employers to test candidates in more varied ways, reducing reliance on titles.

“It’s very difficult for employers to qualify workers, which is why they often turn to proxies like a college degree,” Fuller said.

“Technology can open up more opportunities for non-university graduates, as it will address the difficulty of understanding what someone has done and its relevance.”