The Emerging Degree Reset

The Burning Glass Institute recently published The Emerging Degree Reset, a paper co-authored by Harvard Business School Professor Joseph Fuller, PhD candidate Christina Langer, Emsi Burning Glass senior research analyst Julia Nitschke, Emsi Burning Glass research manager Layla O’Kane, Chairman of Emsi Burning Glass Matt Sigelman, and Emsi Burning Glass chief economist Bledi Taska (hereafter referred to as “the co-authors”).

I am one of those individuals who is neither left-brained or right-brained who enjoys reading and writing as well as working with quantitative analyses. I welcomed the merger of Emsi and Burning Glass. I was a fan of both companies’ quantitative data mining work related to the workforce and education. In my line of thinking, the combination should provide each of their customers the best from both as well as provide a solid nucleus of customers supporting current initiatives and more for the consolidated company.

The Executive Summary provides an overview of the findings, notably that employers are resetting degree requirements, dropping the requirements for bachelor’s degrees in many middle skill and some higher skill jobs. While some may attribute these resets to the difficulty in finding skilled workers during the pandemic, the co-authors’ analyses indicate that the reset began before the crisis and is likely to continue after it. They also conclude that the reset could have “major implications” for opening opportunities for the two-thirds of Americans without a college education adding an additional 1.4 million jobs over the next five years to workers without a college degree.

A few of the co-authors’ assumptions are outlined in the endnotes but are worth mentioning before I list some of the paper’s findings. The co-authors defined low-skill jobs as those with a BA+ share below 25 percent, middle-skill jobs as those with a BA+ share between 26 percent and 50 percent, and high-skill jobs as those with a BA+ percent above 50. The focus of their analyses examined jobs with an average BA share between 25 and 90 percent. My assumption is that other researchers might not classify high-skill jobs as those with a BA+ percentage above 50 percent.

The endnotes also reveal that the co-authors defined material down credentialing as a reduction in the BA+ percentage of more than 5 percent in both the middle and high-skill jobs. The co-authors also used Burning Glass’ Occupation taxonomy containing 670 distinct occupations of which 411 were considered middle- or high-skill.

The co-authors provide a few interesting facts in their introduction; namely, that 25 percent of all jobs like physicians, engineers, and marketing managers have universal degree requirements and 39 percent of jobs like short-order cooks, retail workers, and truck drivers operate outside of the scope of higher education. There are 15.7 million jobs that represent the middle ground between jobs with no higher ed requirement and those with universal degree requirements. When degree requirements are added to a job posting, 64 percent of working-age adults who do not have a bachelor’s degree are eliminated from the job pool. Since 2014, Harvard Business School’s Project on Managing the Future of Work, Emsi Burning Glass, and now the Burning Glass Institute have tracked the trend in degree requirements for middle-skill jobs. The co-authors believe that the shortage of skilled workers has led to a reset in BA requirements for middle-skill and some high-skill jobs. They write that companies can evaluate applicants on their demonstrated skills and aptitudes rather than academic achievement, increasing opportunities for a more diverse workforce since minorities are less likely to hold bachelor’s degrees than non-Hispanic whites and Asian Americans.

The first finding that the co-authors highlight is that 46 percent of middle-skill and 31 percent of high-skill occupations experienced material degree resets between 2017 and 2019. Remember, materiality is defined by the co-authors as greater than a 5 percent change. I would love to see segmentation of changes in occupations by at least two brackets to include >5-10%, and 10%-15% and maybe more with tighter bandings. One of the areas where the researchers observed a reset was nursing, where the requirement for a BA decreased. My recollection from nearly 20 years as a healthcare executive is that the BA or BS in nursing was a hospital accreditation requirement, not a licensure requirement. We would drop the degree requirement whenever there was a nursing shortage as there has been during the pandemic.

The co-authors eliminated occupations where 90 percent of the listings required a BA or higher. They also eliminated all low-skill occupations. This left approximately half of all occupations as open to a potential degree reset. These occupations were divided into two groups. Group 1 occupations (27%) are those with a cyclical reset, that is, these occupations’ degree requirements were specifically reset during the pandemic. Group 2 occupations (63%) are those with a structural reset that decreased their degree requirements in the 2017-2019 period prior to the pandemic.

According to the co-authors, the types of jobs most susceptible to a reset are those in the Information Technology and Management areas. Since the start of the pandemic, resets surfaced in 27 percent of occupations tracked by Emsi Burning Glass. Resets were much more evident in middle-skill occupations than high-skill occupations.

Not all degree resets were uniformly applied by large employers. The Emsi Burning Glass database tracks positions by employer and Figure 4 shows the resets by tech occupation for the 10 largest tech employers. Very few of them deployed a reset but notably, IBM and Accenture did so in three and four of the four occupations tracked.

The co-authors write that a reset requires employers to be more articulate about the skillsets they are seeking when a degree is no longer required. The biggest increase in skills occurred in soft skills or social skills, something typically associated with a college graduate. By highlighting these skills, the co-authors write that employers make applicants more aware of the importance of developing these skills and highlighting then in their applications.

The potential impact of these resets is organized in three areas: employers, workers, and skills providers. While many colleges and universities may view themselves as skills providers in addition to being educators, it is notable that the co-authors chose not to highlight a category that singles out higher education institutions.

I like the paper and the underlying analyses regarding degree requirement resets for middle-skill and high-skill occupations. I don’t know that I agree with all of the co-authors’ conclusions, some of which are based on data that was organized based on the assumptions listed in the paper’s endnotes.

I am particularly concerned that declines under 15 percent may not be permanent and are more reflective of occupations for which companies are willing to live with shortages. Leaders of higher education institutions should read this paper and its detailed data with a view toward determining how the resets might impact their overall enrollment as well as their enrollments in specific degree programs that lead to employment in certain occupations.

Unlike the co-authors, I am less optimistic that the reset of BA+ requirements will lead to higher employment of Blacks and Hispanics in those occupations. While large employers like IBM and Accenture may have the resources to develop accurate tools for assessing competency and aptitude, smaller employers may not have those resources. Hiring managers without accurate tools for evaluating applicants may choose to hire someone who “looks like me.” Only time will tell if my concerns are valid or not.

Read the paper and examine the tables and figures of data. Draw your own conclusions and let me know if you agree or disagree with the findings.

Subjects of Interest

EdTech

Higher Education

Independent Schools

K-12

Student Persistence

Workforce