What’s your degree worth and when is it necessary to have one?
As “jobs of the future” are fast-tracked into our modern business world the question of an academic degree as the sole entry requirement into the job market is being questioned. What is the corporate practice of “credentialling” or “degree inflation” and is a series of short courses better suited to the needs of fast-changing business models?
Why the debate about degrees?In 2015, consultancy firm Ernst & Young UK dropped a human resources bombshell. It announced that it no longer required degrees for its recruitment process, and instead would offer online testing in a bid to find talented individuals regardless of background. Why? It said there was no correlation between success at university and success in careers.
This decision caused such an outcry that the firm asked for an external assessment of its new testing methods. The results showed overwhelmingly that its new process was not only sound, but diversified the talent pool – a benefit to the company and its culture. However, not many companies dared to follow this trail-blazing path.
Fast forward to a 2022 interview with Boris Groysberg, a professor of business administration at Harvard Business School, in which he said that “we’ve moved to this system of university credentials being required for jobs that simply don’t need degrees. The bars were set artificially high and both companies and workers have paid the price.” He calls this default requirement degree inflation or credentialling, and says that “this has been particularly detrimental for workers of colour who, due to historic inequities, proportionately don’t obtain degrees at the same rate as whites.”
In South Africa, statistics released in January 2023 of the people who applied for a R350 Social Relief of Distress grant from the South African Social Security Agency (SASSA) during the pandemic found that 800 000 applicants were post-graduates. Half of this group never worked after graduating, while some worked for a few months but ended up unemployed again.
Something is horribly wrong.
Despite the common HR mantra of “hire for attitude, retrain for skills” as well as an acknowledgement that employees without degrees perform equally well as those with degrees, a degree is often seen as a “commitment benchmark” rather than the knowledge acquired while studying. Exponential change is forcing business models to change so agile, on-the-job upskilling puts a purely academic foundation on shaky ground.
Companies that have ditched degrees for recruitment Large multinationals that have already changed their education requirements for jobs are AT&T, IBM, Microsoft, and Walmart. At IBM, jobs that place more emphasis on capabilities than formal education are called “new collar” jobs.
Last year, American companies such as Kellogg’s, General Motors, and Bank of America removed their four-year degree mandate for numerous positions while some states also dropped degree requirements from thousands of public-sector jobs.
In Japan there is no longer a degree requirement for its space programme: a minimum of three years’ work experience is now preferred.
The new workforce’s point of viewIt’s not just a matter of rethinking degrees as a recruitment tool. Universities around the world are facing an “enrolment cliff”: fewer and fewer students are enrolling at universities.
There are two factors contributing to this.
First, the return of investment on taking a student loan, or parents paying for four years for a degree, is no longer a guarantee of employment, which the SASSA grant example above illustrates is already evident in South Africa. And in a world of economic uncertainty, young people are becoming far more strategic in positioning themselves for jobs, as well as starting their own businesses – an entrepreneurial trait common with Gen Zs globally. They just call it a “side hustle”.
Second, the skills needed for fast-evolving jobs are not necessarily academically based, or can be obtained outside a university. The degrees that cater to these new skills – computer and data science, information architecture, and so on, are gaining in popularity.
It’s telling that the University of Berkeley, California launched its first new college in more than fifty years: the College of Computing, Data Science and Society. Its data science degree, established only five years ago, is now the third-most popular degree the university offers. Students are becoming more pragmatic, aligning themselves with a subject’s importance for their career competitiveness and longevity rather than a more idealistic view of a dream career.
The case for micro-credentials In 2020, the World Economic Forum launched The Reskilling Revolution, an initiative to provide a billion people with better education, skills and jobs by 2030, and the concept of micro-credentials was key.
Micro-credentials, also known as LERs (learning and employment records) encourage experience gained through paid work, volunteer positions and training via a series of short courses, like a coding workshop.
Micro-credentials enable learning that is shorter and more specialised than a traditional diploma or degree and – specifically for South Africa – will benefit people of all ages, education levels and socioeconomic backgrounds. It can create an alternative, skills-based CV more suited to our digital world, or entrepreneurial endeavours.
The career portfolio and the rise of the intrapreneurFor Gen Zs, the concept of a linear “dream career” is an outdated one. Instead, a “career portfolio” is not only more appealing but also more realistic.
As digitalisation blurs the boundaries between sectors it is ever more likely that your skill set will increasingly be needed across sectors, and the more varied your skill set, the better chance you will have to switch lanes. This approach to switching skill sets and working in different sectors is not dissimilar to this generation’s default habit of multi-tasking on different devices while doing one activity. If not building a career portfolio, Gen Zs are increasingly moving towards a freelance or entrepreneurial economy.
This “slashie” mindset might have started with Millennials, but for Gen Z it’s a way of life, and forward-thinking companies should embrace and tap into this way of thinking.
The pandemic normalised remote working and the future of work is set to become increasingly decentralised. Managers are going to want workers who are able to operate independently as well as in a team. This is a skill that is innate with Gen Zs.
Business owners will soon prize independent and creative thinking and appreciate workers who have an entrepreneurial mindset. In current corporate speak, this is an “intrapreneur” – someone who is highly engaged, thinks innovatively like an entrepreneur but works in your organisation.
It’s a fact that the majority of jobs being created today don’t require degree-level qualifications but it has become such a default that companies no longer know how to recruit without them. Employers need to rethink their recruitment process and criteria, fast. There will always be jobs that require an academic qualification but companies also recognise the need for constant upskilling as technology reshapes business models.
The Gen Z workforce already understands this. An overwhelming majority of Gen Zs are considering an education path that is vastly different from the traditional university degree, much to the exasperation of their parents who cling onto the notion that a degree is the gateway to success and a stable career. In contrast, it’s estimated that Gen Zs will work their way through 18 jobs across six careers in their lifetime.
I’m not saying degrees are not valuable but rather the prospect of a non-linear career coupled with the pursuit of meaningful work has surpassed the traditional reverence of a degree. Businesses now require a broader spectrum of credentials and there are alternative providers for those credentials.
People want degrees to be on the menu, but not to be the menu.