Due to Labor Shortage, 1 in 5 Companies Have Reduced Education Requirements for Hiring

Because so many companies are struggling to hire during the labor shortage, jobs are plentiful and, in recent weeks, reports have come out that many college students are actually planning to drop out in favor of working. We wanted to find out if companies really are planning to hire college dropouts, and if so, what their job prospects look like without a degree.

We surveyed 1,250 hiring managers across the U.S. and found that:

  • 20% have reduced or eliminated education requirements in the past year
  • 66% of this group say this is due to hiring difficulties in the labor shortage
  • However, one in four say entry-level positions start at just $20K – $30K or less

20% of Companies Have Reduced or Eliminated Education Requirements

One in five hiring managers surveyed said that their company has reduced or eliminated their education requirements for hiring within the past year. Of this group, 52% say they have reduced or eliminated requirements for entry-level jobs, 54% for mid-level jobs, and 28% for senior-level jobs.

43% Only Requiring High School Education or Below for Entry-Level

In order to see how this shift will affect college dropouts specifically, we looked at just the companies that have reduced or eliminated requirements for entry-level positions. Of this group, 28% now only require a high school diploma, while 15% don’t have any education requirements at all. Previously, nearly three-quarters of companies had entry-level education requirements of at least a two-year or certificate program.

Two-Thirds Say Labor Shortage is the Cause

When asked why they have reduced their education requirements for entry-level hiring, 66% of hiring managers said it was due to difficulties attracting applicants during the ongoing labor shortage.

“By eliminating education requirements, companies will have a larger pool of talent to recruit,” commented career expert Stacie Haller. “It will also change the hiring process as the weight of a college degree will most likely be offset by other requirements or soft skills so they can evaluate the future success of the candidate and truly determine what they need in a candidate outside of having a parchment which surely does not guarantee success.”

Good Attitude is the Most Important Qualification for Applicants

When asked what they look for most in a job candidate, if disregarding education level, 57% of hiring managers said a positive attitude was the number one most important trait.

“Many degrees are more general without any specific preparation for a career, so evaluating the use of those degrees is now up for discussion when hiring,” said Haller. “There is a reconsideration now with many organizations as to the importance of a college degree for many positions, especially where college education does not prepare you specifically for that occupation.”

“For hiring managers to ensure they are hiring the right candidates, they first must determine what skill sets, including hard and soft skills, the successful candidate will need for the position,” she continued. “They need to consider what the college degree represents to them and why it would be important.”

College Education Still Provides an Advantage

However, though a college education may no longer be a requirement at their company, the vast majority of hiring managers did say they would be somewhat or much more likely to hire a candidate with college experience.

 

“What hiring managers consider when interviewing candidates is the ability of the candidate to perform in the job and excel, there is a fit within the organization as well as other specifics to the position,” Haller explained. “Many positions, especially in the white collar world, are those where a college education can prepare you, such as accounting where you can learn specific skills for that occupation and be prepared.”

Jobs Are Plentiful, But They May Not Pay Well

According to the NACE salary survey for Winter 2022, the average anticipated starting salary across college majors is about $63,000. However, one in four hiring managers surveyed say the entry-level salary range at their company is just $20K – $30K/year or less, with most of the jobs available in the manufacturing, tech, business, service/hospitality, and healthcare industries.

70% of this group previously required college experience for these positions, indicating that these companies simply can’t afford college talent, leading to them dropping education requirements.

Studies have shown that men with college degrees earn around $900,000 more on average over their lifetime than high school graduates, and women with college degrees earn around $630,000 more. Although plenty of jobs are available for college dropouts due to reduced education requirements and the labor shortage, the short-term financial gains may not outweigh the long-term loss of education and earning potential.

“Dropping out of college would only be a viable option if the degree they are working towards is no longer something they desire and the way to a happy career does not entail needing a college degree,” concluded Haller. “There are many occupations and positions that do not require a degree, it’s up to the individual to determine the trajectory of their career which may not include the need for one.”

Methodology

This survey was commissioned by ResumeBuilder.com and conducted online by the survey platform Pollfish between May 7 and May 8, 2022. In total, 1,250 participants in the U.S. were surveyed. All participants had to pass through demographic filters to ensure they were currently age 18 or older, employed as a supervisor, HR manager, or business administrator, and handled some or the majority of hiring at their workplace.