Good morning.
“Access and aptitude are not connected.” Those words come from former IBM CEO Ginny Rometty, who in 2012 became the first woman to lead the 112-year-old company. The adage is one that underscores her tenure at the tech company, where she championed a skills-first approach to hiring. But she’s far from the only CEO to echo this maxim.
“Talent is everywhere. Access is not,” says Ken Frazier, one of a handful of Black Fortune 500 chief executives during his decade-long stint as CEO of Merck. It’s a shared sentiment between the two that's served as a catalyst for OneTen, an organization that aims to narrow the opportunity gap for Black Americans without a four-year degree by placing them into family-sustaining jobs, those paying $50,000 a year.
But the nonprofit’s mission is far more expansive than simple job placements. Frazier, who serves as a cochair alongside Rometty, says the organization was born out of a need for skilled workers across industries—a shortfall that’s been exacerbated by corporate piety to hiring candidates with a four-year degree.
It’s a myopic allegiance that has, for years, greatly restricted the aperture for diverse hires, though that’s starting to change. “We thought by putting this focus on skills rather than credentials, we would democratize access to quality jobs in our country,” says Frazier.
According to the 2020 U.S. census, about three in four Black Americans don’t have a four-year college degree. That percentage is even higher for Latinos (82%) and 66% for Caucasians. Meanwhile, 60% of jobs today say they need a four-year degree. “If you can remove that as criteria and open your mindset to looking at skills as another path, how many more talented, potential employees can you gain?” muses OneTen CEO Debbie Dyson.
It’s a question hiring managers have been forced to contend with, though limited headway has been made. In a new OneTen report, shared exclusively with Fortune, just over half of surveyed hiring managers say removing four-year degree requirements would positively impact their company's hiring practices; only 31% report actively doing so.
Several factors contribute to this gap in ideology and execution. Many erroneously believe candidates without a college education are wholly unqualified for even middle-skill positions, traditionally requiring more than a high school diploma but less than a college degree. Frazier characterizes it as a mindset problem. A second issue, he says, is a failure to adopt a common language and methodology that allows hiring managers to deduce whether the life experience of a non-degreed applicant has provided them with the requisite skills to be successful. “How do you put in place the right interviewing tactics and skills that allow somebody to test whether a person has the necessary grit, adaptability, teamwork, all of those things that we really want in our jobs? We have to teach people to interview for what the job requires and not rely on the bias toward credentials,” he says.
Such bias is largely unconscious, Rometty tells me, and attributable to years—nay, decades—in which four-year degrees have been heralded as the market requirement, suggesting some innate value for an organization.
Of note, the report also found that 97% of hiring managers equate a traditional four-year degree with higher proficiency in soft skills. And nearly every surveyed hiring manager said soft skills, such as communication, interpersonal, or critical thinking, factor most strongly into their consideration when filling a role.
It’s a puzzling statistic, given that my collegiate years did not train me on soft skills nearly as much as my on-the-ground work experience, I admit to Rometty.
Dyson offers her own theory. “I think there's probably just this belief that people with four-year degrees are more socialized or of a certain class and that their ability to communicate effectively, for instance, is more highlighted when they’ve participated in a college curriculum course." There’s also an element of distrust against those without a traditional college degree, she says. “Even if my resume says I'm a master communicator, I think there's disbelief because I don't have the degree to back up that I have good analytical skills. There's a bit more pressure to prove it, which doesn’t exist for people with a college certification.”
The irony, Frazier notes matter-of-factly, is that many Americans with a four-year college degree work in fields where they didn’t receive a formal education. The difference is that such a pivot is branded as transferable skills for degree holders.
Though a skills-first approach to hiring requires a complete overhaul of a company's plumbing, employers that invest in qualified non-degreed workers reap substantial financial rewards on the talent side, Rometty says. The report finds that such hires are happier and more engaged at work, more likely to take additional online courses to upskill, more productive after one year, and more retentive. What’s more, there’s often a more suitable skill set match between these candidates and the jobs for which they're selected, Frazier says.
While CEO of Merck, he recalls that employees with traditional degrees in roles like clinical development or data translation quickly became restless, bored, and detached from the role because they were overeducated for the job, leading to turnover. “If we put people who really want to do these jobs in the jobs, the retention is much better,” Frazier says. “It forces companies to focus much more on the relevant skills the job actually requires and to try to match those with candidates.”
Skills-focused hiring seems like a patently obvious motion to increase representation—whether racial, socioeconomic, or some other demographic—but the report indicates a lack of widespread adoption in the workforce.
Rometty and Frazier are adamant that change starts at the top, hence their support of a CEO-led initiative that counts a coterie of who’s who among Fortune 500 executives, including Nike’s John Donahue, Bank of America’s Brian Moynihan, and Lowe's Marvin Ellison. If CEOs endorse vetting all applicants—those with four-year degrees and those without—as part of the company’s talent strategy, it removes much of the risk for hiring managers, they argue.
It also gives hiring managers the green light to articulate in job descriptions what’s needed to effectively perform a role, codevelop programs and apprenticeships that support non-degreed individuals, create management training, and leverage tools to assess cognitive ability and critical thinking during the interview process
In fact, many employees who initially lack four-year degrees later obtain higher education. Toward the end of Rometty's tenure as IBM CEO, about 15% of new hires did not have a four-year degree, and roughly 74% went on to get a degree later. At the time, almost half of IBM’s roles did not require a four-year degree, down from nearly 100% when she joined as CEO. She adds that a simple policy change companies can implement is reverse-engineering student loan reimbursements. Many employers compensate workers after they’ve received a degree, but “for this segment, they don't have the money to pay upfront necessarily.” Instead, companies can offer payment upfront, stipulating that employees obtain a relevant certification.
Though CEO buy-in is vitally important to promoting and entrenching a skills-first strategy, Dyson argues that its efficacy rests in the hands of those a few levels below the CEO: managers. “A CEO can say something, and employees listen but walk away in disagreement,” she says. The challenge, then, is getting managers to be receptive to the idea, which requires companies to involve them as part of the solution.
“You have to show value creation throughout the company. Why is it important for us as an organization to lean into this potential path for new talent to come in and join our organization? How can you, as a leader or individual contributor, be part of the success?” Dyson says. “There's a little bit of what's in it for me. So if you can encourage employees to be part of the solution—like, 'Hey, if we bring in more talent, perhaps your workload gets softened up’—you’ll likely see a greater willingness at the middle layer to champion the cause.”
Ruth Umoh
@ruthumohnews
ruth.umoh@fortune.com
