Roughly two-thirds of Americans don't have a college degree. When they're hired into roles that previously required degrees, their salary increases by about 25 per cent on average. Image Credit: Pexels

Bank of America Corp. and Lockheed Martin Corp. are falling short on promises to hire more workers without college degrees, according to a new report.

They're among the 45 per cent of large US firms that declared a college degree unnecessary for many roles and then didn't change their hiring practices, according to an analysis from Harvard Business School and Burning Glass Institute, a labor-focused nonprofit. Another 18 per cent of companies - including Delta Air Lines Inc. - made progress early on, only to revert to old patterns later.

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Researchers studied a sample of 11,300 roles at firms that had changed degree requirements over the past decade, and found that just one in 700 workers hired last year benefited from a recent shift away from mandatory degree requirements.

"No one doubts the sincerity of the commitments being made, but there is a big gap between what is being said in the C-suite and what is getting executed by hiring managers around the country," said Matt Sigelman of the Burning Glass Institute. "For a lot of hiring managers, skills-based hiring can feel like an unnatural act. It feels very risky.'

Roughly two-thirds of Americans don't have a college degree. When they're hired into roles that previously required degrees, their salary increases by about 25 per cent on average. Companies also benefit - retention rates for workers without a degree is 10 percentage points higher than college-educated colleagues, according to the Burning Glass report.

Skills or a degree

Bank of America says a four-year college degree is not required for many roles.

Christie Gragnani-Woods, a senior vice president of talent acquisition and head of community partnerships at the bank, also sits on the client advisory board of Year Up, a nonprofit group focused on creating career opportunities for young adults without bachelor's degrees. A Bank of America spokesperson said approximately 40 per cent of its 2023 hires were filled by candidates without four-year college degrees, and that figure has been increasing in recent years.

Delta adopted a "skills-first" approach to hiring in recent years to remove what it called "unnecessary barriers" to filling certain roles, including pilots. In 2021, 94 per cent of non-executive job openings didn't require a college degree. The company also has an apprenticeship program with OneTen - a coalition of US employers that's promised to help hire and promote one million Black workers into higher-paying jobs over a decade.

A Delta spokesperson said the company "remains committed to our skills-based talent strategy that has removed barriers to entry and broadened our talent pools. Our focus is hiring the best candidates for every role "" regardless of where they acquired the skills."

A Lockheed Martin spokesperson said the company invests in "the right outreach efforts to hire the best talent to reflect our community. Our people are our greatest asset, and we strive to build a workplace that drives innovation and embraces diverse perspectives."

Policy shifts but no actual change

There are several reasons why these policy shifts haven't resulted in a big change in behavior. A job posting is just the first step in a process that includes various screenings and assessments "- many of them now automated "- and ends with a decision by a hiring manager, who's under pressure to limit the time and cost of the recruitment process. A college degree may also be viewed as a proxy for skills such as communication or critical thinking. Other biases can creep into the process.

"Hiring is a relative phenomenon: If you have four candidates and you're satisfied any of them can do the job, how are you going to pick?" said HBS professor Joseph Fuller, one of the report's authors. "Why wouldn't you take the person with the college degree?"

That sort of thinking has stymied broad-based efforts to reform hiring practices. In December 2020, more than 80 companies including Walmart Inc., JPMorgan Chase & Co. and Pfizer Inc. joined a multiyear initiative to downplay the importance of academic pedigrees. They said the move was to address inequities in employment, but they were also motivated by the need to find skilled workers to fill empty roles.

The job market has changed since then. Many companies are cutting jobs, especially in tech. With firms less desperate for talent and diversity, equity and inclusion programs no longer on the front burner, initiatives like skills-based hiring can lose momentum.

"The CEO's attention flits onto something else, and they never systematize the change," Sigelman said. "As a result, they're back to where they started from."