How educated should our employees be?
by Tina Manzer
The U.S. Department of Labor has released its latest numbers, and unemployment rates are holding firm at 3.7 percent, a nearly 50-year low. Owners of independent stores know what that means – it’s really hard to find great talent right now. Entrepreneur and best-selling author Danny Iny suggests that in order to get the qualified help that they need, companies should change their standards. They need to consider applicants who don’t have a college degree.
You may or may not require that your store’s employees be college graduates, but consider this: if the choice on a hire came down to two candidates – one who lists a college education on his resume and one who does not – which person would you choose?
It’s the “I have a degree, therefore I am smart, hardworking and well-to-do” bias, says Iny, CEO of online business education company Mirasee. “Not only are there plenty of smart young people out there who are choosing not to follow the traditional path, those who do follow it often don’t have the skills employers need.”
In August, Glassdoor revealed that some of America’s biggest companies had stopped requiring college degrees for many entry and midlevel jobs. The jobs ranged from barista to “Apple Genius” and “senior manager of finance” at companies that include Apple, Google, Bank of America, Penguin Random House, Home Depot, Costco, Whole Foods, and Starbucks, according to an article in National Review.
“Why were firms requiring college degrees for such jobs in the first place?” the article asked. “Is there good reason to believe that having a B.A. in sociology or women’s studies makes one more qualified to be a stocker at Costco or shift supervisor at Starbucks?”
“No,” of course, was the answer. What’s more, over-credentialing is bad for workers and for businesses, according to a 2017 study by researchers at Harvard Business School. They found that college graduates filling middle-skill positions cost more to employ, have higher turnover rates, tend to be less engaged, and are no more productive than high-school graduates doing the same job.
“Degree inflation” occurs when an employer requires a baccalaureate degree for a middle-skill job that previously didn’t require one, says the study. It is estimated that degree inflation encompassed 6.2 million jobs across dozens of industries. More than 60 percent of employers surveyed admitted to having rejected applicants with the requisite skills and experience simply because they lacked a college degree.
“Today, thousands of employers use college degrees as a convenient way to screen and hire job applicants, even when postsecondary credentials bear no obvious connection to job duties or performance,” said National Review.
Iny agrees. “It makes no sense to cling to old hiring practices when we live and work in a whole new world.”
The presence of a degree is a signal; a psychological shortcut that enables us to make good decisions without doing the exhaustive research needed to investigate every option, he adds. “But signals can lose their meaning, and that’s what has been happening for some time now.”
In his new book, Leveraged Learning: How the Disruption of Education Helps Lifelong Learners and Experts with Something to Teach, Iny suggests that employers can make good hires by shifting their mindset to override the degree signal. To replace it as a screening device, he suggests these ideas.
Take a long, hard look at what really leads to success in your business, and revise job postings to reflect the stuff that actually does matter.
Drop the application tracking system, or at least switch off the filtering related to education.
“Consider candidates who have pursued progressive, cutting-edge education options; hybrid programs like the one offered by Minerva Schools at Keck Graduate Institute, ‘last mile’ training offered by MissionU, or a program like Praxis, whose slogan is ‘The degree is dead. You need experience.’”
How about ditching the résumé requirement? People often embellish the truth (or outright lie) on resumes. Instead, ask candidates to fill out an online application that includes behavior questions. Some candidates might have exactly the qualities you want but don’t come across well on a resume.
Also ask candidates to perform a few tasks that simulate the job. Choose ones that give you a sense of what candidates can bring to the table. Build them into your online application – it will make narrowing down the list much easier. For more complicated jobs, consider paying a candidate to take on a project. Or, hire someone on a contract basis to make sure they have the right stuff before you extend a more permanent offer.
During the interview, focus mostly on chemistry and culture fit. The interview can really tell you how well you’ll get along with the person. Mostly let the candidate do the talking.
Finally, cultivate the things that matter by developing a culture of learning and growth. While it’s important to find the right candidates, it’s even more important to make sure you continue to develop people after you hire them.
Danny Iny is best known for his value-driven approach to business. He’s published eight other books in addition to Leveraged Learning. They include Engagement from Scratch, The Audience Revolution, and two editions of Teach and Grow Rich. For more information, visit mirasee.com.