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U.S. Treasury has borrowed $155 billion every month of this fiscal year—and is now paying $24 billion a week in interest on its debts

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MPWskills

Degree requirements are holding back company profits and a roaring economy, experts say

By
Jane Thier
Jane Thier
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By
Jane Thier
Jane Thier
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October 16, 2024, 1:33 PM ET
The workforce has experienced significant shifts in recent years, both during and after the pandemic. As business challenges grow more complex and technology takes center stage, how can we create opportunities for untapped talent and prepare employees for the future? Where are the greatest opportunities to evaluate pipelines and hire based on a full range of skills and capabilities rather than past credentials or background?
Carrie Varoquiers, LaFawn Davis, and Lisa Gevelber spoke with Kristin Stoller at the Fortune Most Powerful Women Summit on Wednesday. Stuart Isett/Fortune
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A job listing that requires a bachelor’s degree immediately eliminates 62% of American adults. It also boxes out 70% of Black Americans and 80% of Hispanic Americans. Suffice it to say, diversity of thought and background is “not going to happen” so long as a college degree requirement is included on the list of must-haves. That’s according to Carrie Varoquiers, the chief philanthropy officer at SaaS company Workday. 

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Varoquiers appeared alongside Lisa Gevelber, a VP at Google and founder of Grow With Google, and LaFawn Davis, chief people and sustainability officer at Indeed, on a panel centered on skills-based hiring at the Fortune Most Powerful Women Summit in California on Tuesday.

The conversation, moderated by Fortune’s Kristin Stoller, acknowledged the dire state of untapped talent in the U.S., particularly in jobs that anyone—college grad or not—can do after some basic training. 

It’s no longer a controversial take. Everyone from former IBM CEO Ginni Rometty to former Secretary of State Condoleezza Rice to the chief executives of Microsoft and LinkedIn has extolled the virtue of hiring for skills instead of connections or an Ivy League degree. 

Granted, “I want my doctor to go to medical school,” Varoquiers said. “But not all jobs require it. And if we can start to shift to a skills assessment process versus using a degree as a proxy for those skills, we can really change the world for the better.” 

For the much better: An infusion of non-degree-holding workers stands to greatly benefit both a company’s bottom line and the larger economy. 

STAR power

Davis, the Indeed executive, told the crowd she calls herself a STAR, which stands for Skilled Through Alternative Routes. “As we think about skills that are needed, it’s really about what someone can do for the job. It’s not about their degree. I think it’s important to focus on those hard skills to do the job; none of the rest of the stuff matters.” 

It doesn’t matter what your last name is or which school you attended, she said. The only pertinent question is, “Can you do a job or not?” Hiring managers “need to be able to do that. Instead say, what exactly does this person need to do to fulfill your role? And that’s what you should be hiring for. Everything else should be blank.”

Gevelber started the Grow With Google program in 2017, which shares the foundational approach that Davis and Varoquiers espouse. “The whole idea [was] that the opportunities created by technology aren’t available to everyone,” Gevelber said. “We actually picked this societal problem to work on, specifically the fact that—as Carrie said—most Americans don’t have a college degree, but most good-paying jobs in our country require one.”

Even college professors know what’s coming

None of the panelists, despite their work to move away from degrees-based hiring, are anti-degree. 

“Certainly having a college degree can be life changing,” Gevelber said. “We just believe it shouldn’t be the only way to change your life, so we decided to create a pathway to getting those jobs.” 

The “pathway” Gevelber is referring to is the Google Career Certificate program, which trains workers—with any educational or work background—for entry-level jobs in high-demand fields like cybersecurity, data analytics, and IT support. Its millionth student is about to graduate.

Even higher-ed professionals have conceded that bachelor’s and master’s degrees are unlikely to reign supreme for long. “Do I think white-collar work will inevitably require a college degree? Absolutely not,” Harvard Business School professor Joseph Fuller told Fortune last year. “It will require certain types of technical or hard skills not necessarily indicated by college.” 

Philip Cohen, a sociology professor at the University of Maryland–College Park, last year told Fortune much the same—and even currently enrolled college students agree. “To be sure, pursuing education and a career is still a safer bet for your future,” Cohen said, acknowledging that plenty of data finds advanced degree holders tend to get better paying and more stable jobs. But those benefits are “just not a guarantee anymore.”

Fortune MPW is one of the world’s preeminent leadership communities, bringing together global executives committed to maximizing their impact on their organizations and on society. Membership includes our invite-only Most Powerful Women Summit, which will take place Oct. 12–14  in Santa Barbara, Calif. Learn more.
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