In the tightest job market in half a century, employers face multiple challenges to recruit and retain a talented and engaged workforce. Employment is at an all-time high, and Colorado has a severe shortage of skilled talent with only 51 workers for every 100 jobs. Why, then, do most employers narrow their candidate pool by requiring a four-year degree for most positions?
Consider the numbers: More than 60% of employers surveyed by Cengage require college degrees for entry-level roles, despite nearly three-quarters of employers admitting that degrees are not a reliable proxy for skills. Almost two-thirds of middle-skill jobs are considered “soft bachelor’s jobs” that require a degree. Given that only 38% of Americans age 25 and older possess a college degree, companies are contributing to and exacerbating their own talent crisis.
Here in Colorado, just 30% of Colorado high school graduates will experience post-secondary success – and just 22% of the state’s Latino residents do. That means entire populations of talent are left out of current hiring practices, unable to even apply for most jobs because of their inability to pay for college.
It’s essential for businesses to move past the traditional hurdle of a college education and to embrace a skills-based workforce strategy. Doing so will increase the size of their talent pipeline, build a stronger and more adaptable workforce, and address the persistent inequity in employment by providing opportunities to those who cannot afford a four-year education.
What does that look like? To begin, companies must examine current job descriptions for irrelevant educational credentials and rewrite them to focus on the skills needed to perform a job. Human resources departments and HR leaders need to evaluate current assessment and screening tools, including AI algorithms and applicant tracking systems, that can perpetuate institutional and historical biases.
Instead, companies should create processes that measure applicable skill levels for candidates. Additionally, businesses must seriously consider alternative credentials for talent, including apprenticeships and skills boot camps, which can better equip individuals with specific competencies required by industry.
For employers, the advantages of a skill-based hiring approach are many. When employers prioritize skills over generalized education, they open their talent pool to a larger and more diverse set of applicants – creating a more inclusive workplace with a wider variety of perspectives.
Retention improves when employees’ capabilities align with their job roles. McKinsey reports that workers without degrees stay in their roles 34% longer than their degreed counterparts. Importantly, businesses that prioritize skills-based hiring are more agile; they adapt to new technologies and processes because they can hire people with necessary skills more quickly, rather than training candidates with non-applicable degrees. ActivateWork’s more than 40 partner employers have seen the method work in real-time: They’ve witnessed learners with 12-15 weeks of technical training thrive in the workplace.
The Business Roundtable nationally supports placing an emphasis on skills-based hiring and advancement and is participating in the Multiple Pathways Initiative to address inequities in hiring practices while promoting a focus on the value of skills, rather than just degrees. There are nearly 80 Business Roundtable member companies, including some of America’s largest employers, committed to the effort. Additionally, the Colorado Business Roundtable, through its Workforce Policy Pillar, focuses on building a “tomorrow-ready” workforce in Colorado by increasing pathways to opportunity while eliminating unnecessary barriers to securing fulfilling jobs.
Change requires a collective effort. Along with Colorado Business Roundtable members, Colorado Inclusive Economy is a statewide movement of business, government, and nonprofit leaders committed to ensuring Colorado has a diverse, equitable and inclusive economy. With a goal of making Colorado the most inclusive economy in the nation, Colorado Inclusive Economy is a valuable resource for creating change in how organizations recruit, hire and support a skilled workforce.
Clearly, skill-based hiring represents a win-win-win for untapped workers, industry, and the economy. Providing access to new career pathways for previously overlooked workers means people can operate at their full potential, creating personal economic equity, and businesses can place skilled talent in open positions, building a stronger economy for all.
Helen Young Hayes, of Denver, is CEO and founder of ActivateWork, and founder and board chair of Colorado Inclusive Economy.
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