By Cheryl Winokur Munk—
CNBC
Many of the top companies in the market, with the largest workforce in the country, are promoting jobs that do not require college degrees and removing this requirement from job offers.
The idea of hiring based on skills rather than completion of college education for certain positions has become more prevalent at a time when there is a shortage of workers and more Americans are questioning the economic value of a college degree.
But as data emerges about hiring without degrees, there are signs that some of these efforts may be falling short.
A new report from the Burning Glass Institute and Harvard Business School focuses on how companies stack up in their efforts to hire uneducated workers.
This is important for American workers, more than half of whom do not have degrees, as it affects their ability to get higher-paying jobs and better positions.
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The sheer number of companies promoting efforts to hire people without degrees does not mean that these workers are actually getting the jobs, and in fact, to date there is limited public evidence to support how corporate efforts are shaping up.
The Burning Glass research is an effort to quantify that.
It is based on limited data and does not consider alternative routes that people without degrees use to join organisations, such as through apprenticeships and internships.
But it's still a snapshot of the efforts of America's largest employers to hire more workers based on skills
versus
degrees earned.
“Unfortunately, what we found is that, for the most part, employers are still hiring the same people as before,” said Matt Sigelman, president of the Burning Glass Institute, which provides data-driven research on work-related topics.
More than 60% of American workers do not have degrees
The decision to hire people without college degrees is important because of the large number of people who fall into this group.
Data from the US Census Bureau shows that about 62% of Americans do not have degrees.
The pressure to hire more of these workers does not apply to low-level jobs that never required a degree or to professional positions such as doctors or lawyers.
What's at stake here are mid-level jobs
, such as construction managers, sales supervisors, web developers, cybersecurity, and technical support specialists.
These jobs generally require certain skills and training, but not necessarily a four-year degree.
Knowing how specific companies compare when it comes to skills-based hiring is important for workers “because it tells them where they are most likely to be fairly compensated,” Sigelman explained.
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There are also advantages for workers in terms of salary.
The study found that when workers without a college degree take a position that previously required a degree, they experience a wage increase of about 25%, on average.
That equates to more than $12,400 in incremental profits per year.
Workers who want to see how specific companies or sectors compare can use the American Opportunity Index to compare them based on factors such as hiring, pay, promotion, parity, and culture.
This meter rates companies on a scale of 1 to 5, with 5 being the highest score, and focuses on jobs open to those without a college degree.
The index is a joint project of the Burning Glass Institute, the Managing the Future of Work Project at Harvard Business School, and the Schultz Family Foundation.
Joseph Fuller, a professor of management practice at Harvard Business School, recommends that job seekers use the index to compare companies in the same industry, since there can be big differences in their hiring and promotion practices for non-degree workers.
Fuller also indicated that he does not doubt the commitment at the management level of any of the companies mentioned in the report, but said political pronouncements can only go so far.
“They can announce good intentions, but they have to execute against those good intentions,” he said.
Ranking of Walmart, Apple, GM and others
Burning Glass researchers conducted the new study given the increasing number of employers waiving degree requirements.
The latest findings underscore that companies' desire to expand opportunities to those without a degree does not necessarily translate into daily practice.
The study's observations are based on a database of the career paths of 65 million American workers, who according to Burning Glass represent about 40% of the American workforce.
The 11,300 positions included in the sample are those for which researchers say they were able to see significant hiring volume for at least a year before and after a company eliminated the degree requirement.
The researchers focused on large companies for which they looked at more than 500 unique job postings per year.
The sample included positions from 1,134 different companies.
The companies named in the report are those for which researchers had “robust data coverage,” he said.
Only 37% of the companies analyzed made tangible changes to their hiring practices.
These leaders included major employers such as: Koch Industries, Walmart, Apple, General Motors, Target, Cigna, Tyson Foods, ExxonMobil and Yelp.
The fact that some successful companies are significantly changing their hiring profile suggests that it is not a lack of talent that impedes skills-based hiring efforts, Sigelman said.
Rather, it implies that managers may be reluctant to hire people without degrees, in the absence of specific policies to evaluate the skills of these workers.
If there are two candidates, one with a degree and one without, “for a lot of hiring managers, it's going to be risky,” she explained.
Bank of America, Amazon, Oracle and others under scrutiny
The largest group of companies in the study (45% of the sample) removed degree requirements from job postings, but showed little change in actual hiring patterns, the researchers noted.
Companies in this group include Bank of America, Amazon, Oracle, Lockheed Martin, Kroger and Stellantis.
Companies cited for failing to make big-ticket hires told CNBC they couldn't verify the data, disputed researchers' conclusions or pointed out steps they had taken to improve their skills-based hiring.
“While we cannot verify the methodology of this survey based on the information shared, the conclusions are not accurate,” an Amazon spokesperson said by email.
“A lot of positions at Amazon don't require a college degree.”
For its part, Bank of America shared that around 40% of its hires in 2023 were filled by candidates without four-year college degrees, a figure that, according to the banking giant, has been increasing in recent years.
And Lockheed Martin highlighted its five-year commitment to create 8,000 learning opportunities for skilled workers through technical apprenticeships, mid-career development programs, new college hiring rotation programs and internships, a goal it met a year before what was planned.
Stellantis said its approach includes looking to conduct more skills- and competency-based assessments, which broadens the candidate pool and increases retention.
“Examples in our software division show how we strive to recruit candidates based on their skills, not just their educational background,” a spokesperson said via email.
Oracle and Kroger did not respond to email requests for comment.
Nike, Uber, Delta and the risk of 'setback'
The researchers labeled the final 18% of companies included in the study as “returners.”
These are companies that made initial progress after eliminating degree requirements, but then relapsed.
Among the repeat offenders identified by investigators are companies such as Nike, Uber, HSBC, Novartis, Delta Air Lines, MEijer and US Foods.
A Meijer spokesperson declined to comment on the study itself, but said via email that it “has never committed to hiring team members with or without degrees due to the wide variety of roles within our company.”
The spokesperson also highlighted the educational benefits it offers, including free college education that all team members can take advantage of upon hire, with no waiting period.
An HSBC spokesperson said by email that “the report’s narrow focus fails to capture the nuanced impact of skills-based hiring, overlooking the multifaceted strengths our approach unlocks to create a high-performance culture and exceptional experience for our colleagues.”
Delta said the data cited in the report is not a trend it is seeing as a whole and that it remains committed to skills-based hiring.
“Our goal is to hire the best candidates for each position, regardless of where they acquired the skills,” a spokesperson said in an email.
Nike, Uber, Novartis and US Foods did not respond to requests for comment.