The Rise of New-Collar Workers: Skills Over Degrees

They’re called “New-collar workers”—not white- or blue-collar jobs—a new category in hiring that leaves college degrees in the dust and gives more attention to skilled employees with a nontraditional education. According to the Bureau of Labor Statistics, many workers are unable to advance because they don’t have a bachelor’s degree and are stuck in low-paying jobs. Meanwhile, companies are looking for workers to meet their diversity goals and reduce social and economic inequality. These problems could be alleviated, the authors say, if employers focused on job candidates’ skills instead of their degree status: ‘There’s a huge, capable and diverse talent pool out there that companies aren’t paying nearly enough attention to: workers without college degrees.’ The Bureau of Labor Statistics predicts that between 2020 and 2030, 60% of new jobs—some yielding six figures—will be new-collar occupations that won’t require any type of college degree.

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The skills-first approach to hiring ‘new-collar workers’ goes against the long-held traditional grain that the four-year college degree—a symbol of accomplishment, prestige and pride—is imperative for social acceptance and career success. For as long as many of us can remember, high-school graduates were encouraged to pursue a college degree for financial and psychological security. That message has been drilled into students’ heads from parents and schools, according to James Neave, head of data science at Adzuna—the world’s most comprehensive job search engine.

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But since the pandemic, the tide has been changing. More business leaders are saying that a college degree is not necessary to be successful or earn a good salary. ‘The Adzuna data indicates that skills, rather than degrees, are the top requirement candidates must have to secure a ‘high-paying job’ today, whether job candidates are looking for deskless or corporate positions,’ he emphasizes. ‘In particular, leaders with skills that can boost engagement in today’s workforce are in hot demand.’ And Don Gannon-Jones, vice president of content at Karat agrees. ‘We’re slowly creeping up on a post-degree era. Industries everywhere are realizing that for a lot of fields, colleges and universities aren’t teaching what businesses actually need,’ he asserts. ‘Without a doubt, students are more reluctant to go tens of thousands of dollars into debt for a degree that doesn’t necessarily create a straightforward path to financial security.’

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A report by Harvard Business Review argues that degree inflation—the rising demand for a four-year college degree for jobs that previously did not require one—is a substantive and widespread phenomenon, making the U.S. labor market more inefficient. The report found more than 60% of employers rejected otherwise qualified candidates in terms of skills or experience simply because they did not have a college diploma.

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‘When companies choose to put ‘four-year degree required’ (or even ‘preferred’) on a job listing, they’re automatically shutting out a gigantic swath of the population,’ Gannon-Jones points out. ‘Any effort to create a workforce that offers truly diverse perspectives and backgrounds is essentially stillborn if you insist on a college degree —or worse, if your hiring teams have opinions about which colleges are ‘good enough’ to produce candidates they’ll accept. It’s no surprise that smart organizations are putting a strike through in that ‘four-year degree required’ bullet in their job descriptions.’

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Neave adds, ‘As this year goes on, we expect businesses will continue prioritizing skills over degrees to fill open roles, including those that come with top pay checks.’ According to Tesla CEO Elon Musk and Apple CEO Tim Cook, more companies are acknowledging that degree requirements put them at a competitive disadvantage. Dropping the four-year degree requirement is a welcoming and encouraging win-win for both employers and employees from a disenfranchised segment of the workforce without a degree. A framed diploma on the wall is no longer necessary for these highly-qualified job seekers to find the job of their dreams—one that is gratifying, pays a high salary and leads to career success.

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‘Managers may be more motivated to hire non-degree workers—and feel that it’s less risky—if they have direct incentives to do so,’ according to the authors of the Harvard Business Review piece. To encourage managers to embrace the skills-first approach, the authors suggest organizations develop a seven-step plan that includes:

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• Providing extra funding or budget lines for ‘new-collar jobs’

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• Writing job descriptions that emphasize capabilities, not credentials

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• Creating apprenticeships, internships and training programs for people without college degrees

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• Collaborating with educational institutions and other outside partners to expand the talent pool

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• Helping hiring managers embrace skills-first thinking

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• Bringing on board a critical mass of non­-degree workers

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• Building a supportive organizational culture

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‘IBM, Aon, Cleveland Clinic, Delta Air Lines, Bank of America and Merck are among the companies taking this approach—and demonstrating its benefits for firms, workers and society as a whole,’ the authors conclude. According to Austin King, co-founder and president of Steel River, 41% of U.S. adults report they’d get a certificate that would instantly qualify them for an in-demand job over a college degree. At the same time, there are more than one million openings for manufacturing jobs in the U.S. and more than 2.4 million are expected to go unfilled by 2028.

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Austin King, co-founder and president of Steel River, believes not everyone is meant to go to college, but there should still be equal opportunities for blue-collar workers to earn higher wages without a four-year degree. He contends that employers need to do a better job at closing this gap by providing better work environments including higher wages, equity programs and more learning opportunities—especially if they want to attract younger generations. ‘With such competition for skilled workers in trades like manufacturing, those who provide higher wages and strong company culture will win over top talent,’ according to King. Instead of slashing service costs to acquire more customers, he recommends giving half of all price increases back into employee salaries to make roles more enticing to those looking for steady and secure wages that rival white collar roles.