By Matt Ferguson, CEO of CareerBuilder and co-author of “The Talent Equation”
In the last 20 years, education has become increasingly important for workers as technology has rapidly changed the workplace. Today, education is more than important — it’s fundamental for success in this post-recession economy. As companies rely more heavily on professionals with strong interpersonal and technical skill sets, college degrees are evolving into the new high school diploma.
According to a new CareerBuilder survey, 27 percent of employers say their educational requirements for employment have increased over the last five years. Similarly, 30 percent of employers say they are hiring college-educated workers for positions that were previously held by high school graduates.
Those figures increase significantly when you look at the fields of science, technology, engineering and mathematics. Forty-six percent of employers hiring these STEM workers have raised their educational requirements over the last five years, and 43 percent are now hiring college graduates for roles traditionally held by high school graduates.
What employers are looking for
The educational requirements for employment are rising for several reasons, perhaps none as important as the fact that employers see positive results from hiring college graduates.
According to employers, the most cited positive outcomes of hiring college graduates are:
- Higher quality worker (56 percent)
- Productivity (45 percent)
- Innovation and idea generation (41 percent)
- Communication (41 percent)
- Employee retention (27 percent)
- Revenue (19 percent)
- Customer loyalty and retention (17 percent)
However, employers are split on why they are hiring more college-educated workers for work traditionally held by high-school employees. Fifty-eight percent of employers say the “tight labor market” allows them to hire more degree holders. Yet, 55 percent of employers cite “skills for my position have evolved, requiring higher-educated labor.”
The ripple effects of an educated workforce
According to the National Center for Education Statistics, the percentage of 25-29-year-olds who completed a bachelor’s degree or higher rose from 23 to 33 percent. In that same time period, 7 percent of 25-29-year-olds completed a master’s degree or higher — a 3 percent increase.
This means that today’s workers are more educated than previous generations, and a college education or higher is necessary to remain competitive now and in the future. Employers want to remain competitive in the marketplace, too, and are taking action. The same CareerBuilder survey finds 20 percent of employers are now targeting workers with a master’s degree for roles where a bachelor’s degree has traditionally been the norm.
Fortunately for workers, 33 percent of employers are sending current employees back to school for advanced degrees, and 81 percent of that group offers at least partial funding.
For proof of a college diploma’s pay off, look no further than the unemployment rate by level of education. As highlighted in “The Talent Equation,” a book I co-authored with Lorin Hitt and Prasanna Tambe, the 2012 unemployment rate of workers with a bachelor’s degree or higher was 4.1 percent, compared to 8.7 percent for high school graduates and 11.3 percent for workers with less than a high school diploma.
What this means for workers and employers
An education — specifically a college diploma — is shifting from optional to mandatory in many industries. Workers should take advantage of any educational and training assistance their employers offer. Job seekers who can afford to continue their education should look at their options in order to stay competitive in the job market. Scholarships, grants and loans can offset the upfront cost of going to school, and the long-term earnings can make the expense worthwhile.
Because an educated workforce benefits businesses and workers alike, leaders at higher-education institutions and policy makers need to control and decrease the costs of attaining a degree. Businesses should also continue to invest in training and development. The educational threshold to get hired is rising, and an educated workforce is our new reality, not a passing trend. Job seekers and employers alike need to consider how they can actively participate and stand out in this evolving job market.
Matt Ferguson is the CEO of CareerBuilder and author of “The Talent Equation: Big Data Lessons for Navigating the Skills Gap and Building a Competitive Workforce.” http://www.talentequationbook.com/