Some Companies Are Dropping College-Degree Requirements for New Hires
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Here's your Money Briefing for Tuesday, February 27th. I'm J.R. Whelan for The Wall Street Journal. About two-thirds of Americans don't have a college degree. But many companies don't see that as a barrier preventing them from applying for jobs.
So at a time when unemployment is very low, companies have lots of openings they want to fill. If you're already making those jobs out of reach to a majority of Americans, that's going to make it even harder to fill those jobs. So a lot of companies are rethinking why those degree requirements are there in the first place.
But is that resulting in more non-college grads being hired? We'll talk to Wall Street Journal reporter Lauren Weber after the break.
Why are employers reconsidering college-degree requirements for jobs?
More companies are dropping the requirement that job applicants have a college degree, but that doesn't always translate to more job offers for them. Wall Street Journal reporter Lauren Weber joins me. Lauren, what's been the trend for high school graduates in the U.S. who enroll in college?
So we've seen declining enrollment for the last few years. That's probably a reflection of the fact that more people are questioning the value of a college degree at a time when the cost of that college degree is going way up.
Why are some companies lifting the requirement that job applicants have a degree?
The most obvious answer, and this is what I heard from many companies I spoke to, is that a fairly small share of Americans actually have a college degree. The numbers are about 62% of Americans over the age of 25 do not have a degree. Some may have started college and dropped out. Some may be never enrolled. But still, that's 62% of the US population over the age of 25. So at a time when unemployment is very low, companies have lots of openings they want to fill. If you're already making those jobs out of reach to a majority of Americans, that's going to make it even harder to fill those jobs. So a lot of companies are rethinking why those degree requirements are there in the first place.
What are some examples of companies doing that and for what types of jobs?
Some of the interesting examples that I heard about and that I wrote about in the story was, for example, Delta Airlines in 2022 dropped the college degree requirement for its pilots. Now, Delta doesn't set the requirements for a pilot having a pilot's license. That's all done by the Federal Aviation Administration. They handle all of the licensing, all of the certification, the testing. The folks at Delta were saying at a certain point we realized there was no value add necessarily from requiring that someone has a degree. And in fact, it was keeping some people from being able to apply for those jobs.
So that relaxing of the degree requirement helps get people in the door for Delta. Is that right?
That's right. Delta was saying they don't have a problem finding enough people who want to be pilots for the airline. A lot of people work their way up through various types of flying, hoping to get to the big commercial airlines. But that was just one example of many where companies were saying, we have kept a lot of people out of the pool of applicants for jobs where we could have expanded that pool, whether that was about opening opportunity for people who maybe didn't needed more opportunities in the job market, or for some companies, part of this was also about diversifying their workforces. And so being able to open jobs to a larger pool of potential candidates, there were a lot of reasons why they felt that having a bigger pool to draw from would allow them to actually pluck the best people from that pool without using an unnecessary screening mechanism, which for some jobs was the bachelor's degree.
After companies lifted the college degree requirement, how did that affect the share of jobs that went to those candidates?
There's the rub. It turns out it's not easy to rethink the credentialing of jobs. It's actually a big undertaking to look through all of your job postings and say, okay, let's take one by one. Does this job really need the degree requirement?
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