Academic disqualification, discrimination, and exclusion are unchecked behaviors that are holding back more than 70 million U.S. workers who are skilled through alternative routes (STARs). This “paper ceiling” is an invisible barrier that’s filtering out qualified workers through biased hiring algorithms and a fixation on degree requirements.
However, removing degree requirements alone will not dismantle the deeply entrenched stereotypes about what constitutes a qualified worker. Our 2024 Graduate Employability Report found that 79% of employers believe a degree still holds value for an entry-level worker looking to join their company and 70% say a degree is a strong indicator of career readiness.
While higher education is undoubtedly a viable pathway to obtaining lifelong employment, we must strike the right balance of maintaining higher education’s value while tearing down the systemic barriers of the paper ceiling to create a more equitable labor market. While a four-year degree will continue to be valuable for many, only about 40% of Americans hold one. Expanding opportunity for the majority without a degree is critical given low unemployment and significant talent gaps in the labor market.
Real change and disruption can only happen when the entire labor ecosystem—policymakers, educators, employers, and the workforce—shakes these stigmas to embrace and celebrate workers who have equipped themselves with the skills needed for employment in ways that worked for their learning style and budget at that stage of their life. The true value of these workers lies in their skilled expertise and potential to fill ongoing talent gaps that, if unaddressed, could result in a $1.7438 trillion revenue loss for businesses by 2030.
Promising progress
While the promise of skills-based education is not new, it has been slow to take hold. When analyzing the state of hiring requirements, our report found only 12% of companies do not have any degree requirements. Employers, educators, and workforce development practitioners have long championed the value of career and technical training, including apprenticeships and industry-recognized credentials. However, the stigma surrounding these certificates and credentials as being “less than” continues to exist.
The main reason companies still have degree requirements is because they believe candidates who have a college degree are more equipped for the role, our report shows. However, we appear to be reaching an inflection point, as studies are beginning to show declining return on investment for four-year degrees, leading some higher-education institutions to pioneer and take to scale competency-based, industry-aligned programs.
Even more encouraging, new proposals in Congress, such as the bipartisan Stronger Workforce for America Act and the Bipartisan Workforce Pell Act, are rethinking how federal investments in postsecondary education can help more learners, particularly working adults, access non-traditional, high-quality learning pathways that lead to good jobs.
More than 20 states have eliminated bachelor’s degree requirements for many state positions, and nearly half of employers report working to do the same this year. Even the Federal Government is taking steps as our nation’s largest employer to adopt a skills-based hiring approach throughout every federal agency. Just last week, Vice President Kamala Harris said she would remove college degree requirements for certain federal jobs if elected president, and while in office, former President Donald Trump issued an executive order prioritizing skills over degrees. All this progress is promising–but as our Employability Report shows, there’s a lot of work to be done to put these rulings and policies into action.
I’ve witnessed the success of credentials-based programs firsthand in my role as the CEO of an edtech company. I’m inspired by alums like a newly arrived immigrant who enrolled in an adult education program to learn English and gain the skills needed to acquire healthcare credentials that improved her employability. Or a former teacher and single mother balancing online coursework with family life to re-enter the workforce and transition to a new career as a children’s crisis counselor. Stories like these embolden America’s collective passion and commitment to continue tearing the paper ceiling.
Obvious obstacles
Despite these success stories, obstacles remain in the most obvious places—education and hiring. As the concept of expanding educational pathways and modernizing learning to develop career-ready graduates has emerged, the education system itself has been slow to adapt and connect learning with modern job market realities. According to our report, 39% of recent grads didn’t apply to entry-level jobs because they felt underqualified, up from 33% in 2023.
Employers also struggle to move past traditional hiring structures and invest in internal skills training because they too want to see clear ROI. However, the mounting skills crisis is starting to open employers’ eyes to the value and impact of adopting a skills-forward mindset. In fact, our report found employers will prioritize a candidate who demonstrates a mastery of skills needed for the position (38%) over one who just has a college degree (19%).
When educators and employers cling to a bachelor’s degree as the primary determinant in career readiness, they fail to account for the diverse skills, interests, and capabilities that non-traditional learning can provide. Without embracing multiple educational paths as viable ways to achieve competency, we will continue to restrict economic mobility for millions of skilled workers due to lack of a degree.
This perpetuates society’s wealth gap, blocking the pathway to the middle class. By addressing the systemic barriers of the paper ceiling and providing more equitable access to education and training, we can empower skilled workers to achieve their full potential, ultimately creating a more prosperous economy for all.
To modernize their approach and continue tearing the paper ceiling, educators and employers must:
- Empower student choice—early. Through paths like dual enrollment programs, career and technical high schools, youth apprenticeships, and more, educators can remove degree stigmas earlier and normalize various learning paths after high school.
- Leverage the ties between educational institutions, like community colleges, and regional employers so institutions understand the specific skills gaps and workforce needs in the real economy.
- Explore unique talent pipelines through partnerships with workforce development programs, externship opportunities, and apprenticeships.
- Establish clear criteria for evaluating non-traditional candidates during the recruitment process. The Society for Human Resource Management (SHRM) reports that only a third of applicant tracking systems (ATS) recognize non-degree credentials and that recruitment technologies are already filtering out almost half (45%) of candidates holding these unrecognized credentials.
- Embrace a culture of continuous learning to maintain lifelong employability and enhance career adaptability. The rising generation of workers will have multiple jobs in their lifetime and education can empower and sustain individuals for the evolving job market.
- Practice cross-generational mentorship, which can help experienced workers learn new skills and understand new ways to solve problems.
The progress made so far in tearing the paper ceiling is promising. Our report uncovered that 67% of employers are expanding their hiring search to include candidates with industry certifications and credentials. But the work is far from over. The final hurdle lies in the most obvious places—the education system and employers’ hiring practices. The path forward requires a concerted effort across the labor ecosystem to evolve the outdated mindsets that have perpetuated this oversight for far too long.
Only then will we unlock the true potential of an underutilized workforce whose skills are vital to filling jobs and fulfilling America’s economic potential.
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The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
