The White House Endorsed Skills-Based Hiring. Why Aren’t Workforce Wonks More Excited?

The following article is from EdSurge

The idea that employers should hire workers because of their skills, not just their credentials, got a signal boost last week from the White House.

President Trump signed an executive order on June 26 directing the government to reduce the use of minimum education requirements for filling federal job opportunities, except for positions where such standards are legally mandated.

"Degree-based hiring is especially likely to exclude qualified candidates for jobs related to emerging technologies and those with weak connections between educational attainment and the skills or competencies required to perform them," the order states. "Moreover, unnecessary obstacles to opportunity disproportionately burden low-income Americans and decrease economic mobility."

The federal government is the nation's largest employer, with more than 2 million civilian workers.

Proponents of alternative pathways to employment welcomed the announcement, such as Ginni Rometty, executive chairman at IBM, which has made a push to hire people who don't have bachelor's degrees for "new-collar jobs."

"Shifting the federal government's focus towards hiring for skills, not just degrees, is a critical step towards expanding job opportunities for more Americans," she said via a Twitter statement.

But the order's fuzzy details mean that leaders of workforce nonprofits and foundations are keeping their optimism cautious for now. They say much work remains to make skills-based hiring a reality, such as sorting out which of the more than 700,000 non-degree credentials offered in the U.S. are high quality and most relevant for jobs.

"At the level of symbolically saying, 'we should have a labor market which looks at skills first,' I think it's an important statement of principle," says Chauncy Lennon, vice president for the future of learning and work at the Lumina Foundation. "What is the practical implication, it is less clear."

Changed Economic Outlook

Many Americans theoretically stand to benefit from the expansion of job opportunities to people who don't have bachelor's degrees. At least 36 million have some college experience but no degree, according to the National Student Clearinghouse Research Center, and millions more have only a high school diploma.

The movement to cut unnecessary education minimums was gaining ground among private employers before the start of the COVID-19 pandemic, when the U.S. had record-low levels of unemployment and lots of unfilled jobs, giving workers more power in the labor market.

The economy has shifted tremendously over the last few months, however. Trump's new order comes as millions more Americans are unemployed now than at the start of the year.

The economic fallout hasn't hurt everyone equally. During the pandemic, people who have a bachelor's degree have been better insulated from job losses than those who don't, in part because people with more education are more likely to have jobs suited to telework, according to a new report from the Federal Reserve Bank of San Francisco.

So the increased leverage many workers without college degrees enjoyed just six months ago has been recently wiped out.

Potential and Challenges

Leaders of workforce nonprofits and foundations that support the general goals of the executive order—creating more job opportunities for people who don't have advanced credentials—expressed ambivalence about it in interviews with EdSurge this week.

They acknowledged that the federal government's high profile and large workforce mean its labor practices have the potential to set standards in state and local governments and private industry. For example, proponents of paid parental leave benefits cheered in December when the federal government passed a law granting paid parental leave to much of its workforce.

"The federal government is the largest employer in the country, so that's a big deal, even though not every job in the federal government will be affected by the executive order," says Amanda Bergson-Shilcock, senior fellow at the National Skills Coalition. "Having the feds kind of be the first out of the gate with a really ambitious attempt is something a lot of folks will be watching with interest."

Yet they said that its large size sometimes makes it difficult for the government to make changes nimbly.

"This executive order is like trying to turn around the Queen Mary," Bergson-Shilcock says, referring to a big British ocean liner. "It's going to take years to see how this really plays out in reality."

The task of developing the details of how to assess job applicants' skills will fall to the director of the U.S. Office of Personnel Management and the heads of federal agencies. If they seek guidance from the many research reports published about alternative employment pathways and ways to measure job skills, they'll find many ideas but not necessarily much proof about what works.

"We don't have a lot of examples of best practice there," Lennon says.

Institutions of all kinds offer hundreds of thousands of non-degree credentials, badges and certificates, some of which carry more caché than others. Several efforts are underway to tally, organize and store these in ways that are more useful in hiring. Credential Engine, a nonprofit, is working to create a registry. The U.S. Department of Education and American Council on Education are exploring blockchain solutions.

People who have certificates but no degrees are more likely to be employed and earn more than those who have neither, according to a 2019 report from Strada Education Network, the Lumina Foundation and Gallup.

Alternative credentials aren't necessarily accessible to everyone, though. Some credentials can creep into degree territory in terms of cost or time to complete. So government leaders may also explore other ways to evaluate candidates, such as issuing skills tests or considering endorsements from former employers.

Or they could follow the lead of companies that, pre-pandemic, were pouring money into programs designed to train people to acquire skills needed to strengthen their workforces, says Jeremy Wheaton, president and CEO of ECMC Group.

As for how a government effort to reduce employer reliance on bachelor's degrees might affect the political movement to make college more affordable, or even free, Lennon says it's not an either-or choice. After all, no matter how affordable a four-year degree might become, not everyone will want to go to college.

"What's complex here is to say, look, a BA is a good thing to get, but we shouldn't design a labor market that says it's BA or bust. The labor market should allow different pathways," Lennon says. "What's good about this kind of executive order, it's helping to get rid of that distortion."