Employers look to rip the ‘paper ceiling’ for non-graduates

From McKinsey and Accenture to Google and IBM, a growing number of leading employers are now looking beyond elite universities for job applicants and hiring workers who did not acquire their skills through a degree.

In the past two years, some 50 companies, foundations and other recruiters have joined a US-based campaign to tackle an invisible barrier: the “paper ceiling” of degrees — which is increasingly viewed as unfairly blocking job opportunities for talented people who did not go to college.

And their actions are part of a wider reflection on whether there are effective and more equitable alternative routes to training, at a time when tertiary education costs are rising, and the skills required in workplaces are changing fast.

Katy George, chief people officer at McKinsey, says: “We have changed our recruitment model to be increasingly inclusive.” She stresses that the consultancy, in addition to expanding its outreach to 2,000 universities, is moving “from prestige to potential” — hiring more new employees from non-traditional backgrounds who demonstrate “grit, learning agility and curiosity”.

Research by two Harvard business school professors in partnership with Accenture and Grads of Life, an employment consultancy, points to a rapid rise in “degree inflation”. It identified 26mn US job postings over the past decade which required a four-year college degree, even though their existing incumbents did not hold such advanced qualifications.

While that fresh “paper ceiling” may partly reflect the fact that many jobs now have more demanding requirements, the analysis concluded that it was also the result of “employers’ misperceptions of the economics of investing in quality talent at the non-graduate level”. 

Many chose college graduates to make good on the perceived skills gaps, but found their graduate recruits were in fact less engaged and quit more quickly. While they were paid typically 11-30 per cent more than non-graduates, they did not markedly outperform on measures such as time to reach full productivity or promotion, level of productivity, or amount of oversight required.

Some suggest the education system is not set up in an optimal way. Euan Blair, the founder of Multiverse, which offers work-based training programmes linked to coaching, says: “The challenge of higher education and even traditional corporate learning is there is a complete lack of direction or consequences. They give you anything you want, but it’s not guided by specific objectives. The measure of success of colleges is not successful careers for their students.”

In the US, the debate on the “paper ceiling” is even more intense as the official “sticker” price for attending the country’s more elite colleges is approaching $100,000 per annum for a four-year undergraduate programme — and that is before the additional costs incurred with a shift towards a subsequent masters degree.

Opportunity@Work, which launched the US “tear the paper ceiling” campaign, seeks ways to find better jobs for the estimated 70mn “Stars” — those “skilled through alternative routes”. They have developed expertise through non-university paths including community college, workforce training, boot camps, certificate programmes, military service, or on-the-job learning. 

But progress is hindered by a lack of alumni networks, biased recruitment algorithms and other filtering systems that eliminate candidates who do not hold degrees. The campaign criticises “false stereotypes and misperceptions . . . which create barriers to upward economic mobility,” and estimates that greater opportunities for 1mn people in the coming decade would lift incomes by $20bn. 

Peter Cappelli, professor of management at the Wharton School of the University of Pennsylvania and author of the book Will College Pay Off? says: “My particular concern was pushing so many people into college thinking it was going to be a good investment for them. In some fields, you can advance by getting a masters degree but, in others, there is no good evidence that these things matter. Pick a job title and there’s a masters degree.”

He suggests that the people who benefit most from a degree are those who are already better off because of the “social capital” they have accumulated. Others may actually suffer, especially if they fail to finish an expensive college degree. Yet many employers — including those in government and those with active white collar unions — still often demand a masters degree. 

Analysis carried out some years ago by the economist James Heckman at the University of Chicago showed the overall cost of college was justified by higher lifetime earnings — even after adjusting for student loans. But some of his more recent work suggests a more nuanced picture for those students with lower ability levels. “Graduating college is not a wise choice for all,” he concludes.

Just because you remove a degree requirement it doesn’t guarantee a hiring manager will not prefer someone with a degree

Initiatives to reduce the college degree barrier are gaining ground. In recent months, US states including Pennsylvania, Utah and Maryland have reduced or removed the degree requirement for many public sector jobs. However, higher education advocates caution that the alternatives are not always better. 

Amanda Welsh, professor of the practice at Northeastern University — a rare example of a US college offering experiential learning through projects and a year working for an employer — argues: “The degree is still very much a proxy for high-order thinking and problem-solving. I don’t know if there’s an alternative process to provide that signal.”

Nicholas Dirks, the former Chancellor of the University of Berkeley, also suggests it is not as simple as dropping degree requirements. “I worry that this becomes a binary conversation,” he says. “I’d much rather states invested in public education than say you don’t need a degree. Jobs keep changing and if you just focus on what is required for a particular line of work, you risk being left with a set of obsolete skills.”

And some employers appear simply to prefer graduates. A recent study by the Burning Glass Institute, which researches the future of work and workers, found that, in job openings that removed the condition for a degree, only 3.5 per cent of the people hired did not have one. 

Matt Sigelman, its president, says that tearing down the “paper ceiling” and seeking alternative ways to evaluate candidates’ skills “can work but seldom does”.

As he notes: “Just because you remove a degree requirement, it doesn’t guarantee a hiring manager will not prefer someone with a degree.”