We have a problem in the United States. Over the last 30 years, college tuition has increased 1,120 percent. And American student debt is forecast to swell to $1.4 trillion by 2020 — it’s already impossibly upwards of $1.2 trillion. College is too expensive. Ridiculously, shamefully expensive in many cases. To make matters worse, our society and the companies that fuel it have become addicted to high-priced, name-brand education — and it is affecting the American workforce dramatically.
It’s time for businesses to change how we look at higher education when it comes to recruiting. If we want access to the best talent out there, we have to redefine the value of a college education in the job market and expand the regard we have for certain name-brand institutions into a newfound — and entirely necessary — respect for alternate paths to job skills.
The “blue collar” dilemma
In past U.S. recessions, the “blue collar” jobs that didn’t require a college education or advanced experience and skills were typically the first to disappear. But following our last recession, the jobs didn’t come back like they used to — because they were automated by technology. We now have a growing population of folks without the requisite skills or education to get the kind of job that pays well or can become a lasting career.
The shuttered steel mills of Pennsylvania may seem far away from Silicon Valley, where companies vacuum up talent. But that blue-collar job loss and the struggle to fill engineering jobs are actually interconnected: Both are the product of our obsession with high-priced, brand-name education.
Educational costs are out of control
Today, so many businesses, particularly in the tech industry, over-favor the most expensive schools — the MITs, Stanfords, and Harvards. According to a Nerdwallet study conducted over the 2009-2011 school years, Ivy League graduates were 59 percent more likely to find employment than the average graduate. The logic has always been their graduates are “less risky” and “more productive” for the companies who hire them.
But while more than 25 percent of recruiters plan to hire 100+ people in the next year, we have this burgeoning group of people who can’t afford the education to get the skills to fill that demand. And even if they can afford some education, it’s not from the universities that companies seem to prefer.
So here we are, with thousands of people in search of employment, and thousands of job openings that are critical to helping businesses remain competitive — and one sad, expensive educational barrier preventing the two groups from successfully addressing the other’s needs. What do we do?
A mentality that needs evolving
It’s going to take a lot more than a quick fix. Both business and government will need to work together to change the current system and discover a better alternative. We’re already seeing greater investment in alternatives to pricey universities, such as online learning courses and degree programs. Now we need more ways to make college affordable, through reduced/free tuition programs or apprenticeship programs that combine education and work experience.
Apprenticeships, in particular, have proven extremely successful at training employees for future vocation in countries like Germany, and they’re starting to appear in the United States as well. Job seekers are hungry for opportunities to develop their careers, and I think they will start to care less about how they build skills as long as they can afford to build them at all.
Alongside governmental initiatives, companies across industries need to develop a new outlook on hiring talent. We’re on the cusp of a major fundamental shift, where businesses realize that the effective ROI of employees developed through these educational alternatives, or with degrees from non-name-brand schools, is just as high if not higher than that achieved through those premier colleges. A 2014 LinkedIn college ranking survey showed that some industries, such as media and accounting, grabbed their best workers from lesser known schools — and Jobvite data from 2015 showed San Jose State University in California as the top university most likely to land its graduates a job in Silicon Valley. The best talent doesn’t always have the most expensive diploma.
Some companies are already getting it right. In 2014, Google revealed that its search for talent doesn’t factor in college rankings; instead, they prefer candidates with “intellectual humility,” which graduates of top schools may be lacking. And last year, Ernst & Young’s U.K. offices announced that they will no longer require new hires to have college degrees, after an internal study found little proof that academic success affected how employees performed on the job.
In 2016, I believe we’ll see this shift finally tip the scale. We have to make education more accessible, and we have to value and promote all kinds of education in order to put people to profitable, and purposeful, work.
Dan Finnigan is CEO of Jobvite, an analytics-driven recruiting tech company. He was previously both an SVP for Yahoo and general manager of Yahoo HotJobs and served as the president and CEO of online media company Knight Ridder Digital. He also previously worked as a freelance reporter for the Philadelphia Inquirer and today publishes an Inc. column on leadership and business.