A Case for Skills: Transforming the Value Proposition of Higher Education
Higher education is on a precipice. A nation amid a global pandemic, awash in economic uncertainty, finds the long-held belief that a college education is “worth it” waning. Systemic issues related to return, relevance and equity in higher education are creating a significant breakdown of public confidence in the system and the value of college degrees. 
Since the 1990s, the cost of college tuition and fees have skyrocketed, increasing nearly 391%.  Even more troubling, the cost of college education is growing eight times faster than wages, leaving future opportunity for learners stifled by a system where student loan debt is rising, and wage return is stagnant. On August 24th, the Biden Administration announced a relief effort to combat massive student loan debt incurred by over 45 million borrowers.  This action unfortunately does nothing to innovate on return or address how we avoid its further erosion. The current system is leaving students with mounting debt and the lack of financial return to combat it, particularly students who never completed their degree.
In addition to growing skepticism around return on college degrees, the relevance of the college experience is under scrutiny. Data suggests that there is a significant gap in how chief academic officers (CAO) and business leaders perceive graduate preparedness for the workforce, with 96% of CAOs reporting that their institutions adequately prepare students for the world of work, compared to only 11% of business leaders.  Students are also struggling to see the relevance of a college degree in achieving career preparedness, with only 36% of students believing they will graduate with the skills necessary for workplace success. 
As the gap in relevance and return of higher education widens, so does equitable access to opportunity. Only 1/3 of the U.S. population holds a bachelor’s degree, yet 44% of job postings in 2021 required a four-year degree.  And though reliance on degree as a primary filtering mechanism in the hiring process is on the decline, the antiquated process is still driving systemic inequities.  Degree inflation is a barrier to entry for individuals of any race; however, it has a disproportionate impact on Black Americans. Of workers aged 25 or older, 40% of non-Hispanic white Americans hold a bachelor’s degree or higher, compared to only 26% of Black Americans . These numbers point to a profound equity issue in both higher education access and economic mobility.
These systemic issues in return, relevance and equity are profound and will continue to erode public confidence in the higher education system if left unaddressed. But this bleak outlook is not without hope. Higher education has an opportunity to reinvent and renew itself by focusing on skills to bridge this collapse in raison d’être. By shifting an intentional focus to skills-based education, higher education can revitalize and recommit to more rewarding, relevant and equitable outcomes for their learners.
Skills for Return
Skills provide a new educational currency for better employment returns.
Strada-Gallup’s “Why Higher Ed?” study indicates that 58% of higher education consumers pursue a degree for career-related motivations.  While college degrees may still be the surest path to opportunity, their long-held position as a primary qualification for hiring is on a decline. The labor market is shifting rapidly, and hiring practices are transforming to keep up. Research suggests that 62% of employers have taken active steps toward skills-based hiring in favor of degrees. Recent LinkedIn data suggest that 60% of employers using skills-based hiring techniques are likelier to make successful hires than those who don’t.  As Tim VanderArk, CEO of GetSmart puts it, degrees have become a “weaker proxy for a bundle of skills” and are rapidly losing favor over skills in hiring practices.  Some organizations like General Motors and IBM have eliminated degree requirements altogether for many of their job roles. 
Skills are emerging as a critical currency for students in the labor market, and their importance is reaching an all-time high. This evolution necessitates a focused shift in higher education to place more importance on the skills for the benefit of learners. Skills must rise to the forefront of a higher education experience. It’s not a question of skills or degrees. It’s a need for skills and degrees. By ensuring both degrees and course work account for the critical skills learners need in the workforce, learners can build important currency in the labor market on the way to a degree, adding incremental value to their employability prospects on their educational journey. This approach can yield more immediate returns for students as they work toward completion, capitalizing on the skills they gain as they go.
Skills for Relevance
Skills create relevant career connections for learners.
The days of pursuing an education for education’s sake are over. Now more than ever, it is critical for students to be able to connect their learning to life and career. However, the number of students who see direct relevance between their college coursework and career goals is staggering. Only 26% of working U.S. adults with college experience believe their coursework is directly relevant to their career—a disappointing yet unsurprising number, given the growing skepticism around the value of college degrees. 
Skills create a more transparent alignment between academic content and career. Students who can see clear relevance between their courses and career are likelier to believe their education was quality and worth the cost.  However, these career connections are often obfuscated from view and not as transparent as they should be for all learners. Many higher education institutions leave the full onus on students to make these important connections. This is particularly problematic for underserved students who may not have had career mentoring to help draw these connections. Moreover, students who have frequent conversations with college faculty about skills and career connections report greater confidence in career readiness than those who don’t (42% vs 27%).  Highlighting the skills that students are demonstrating and gaining through their college experience can help students see the critical connections between academic content, and their career goals, increasing both actual and perceived value of their college experience.
Skills for Equity
Skills level the playing field for more equitable access to opportunity.
Higher education that doesn’t focus on skills not only misses the mark but perpetuates systemic inequities in access to opportunity. Positioning the degree as “the exclusive pathway to opportunity” for career advancement has led to major degree inflation over the last three decades and barriers to opportunity for far too many.  A 2017 Harvard Business School study reports that as many as 6.2 million Americans may be impacted by degree inflation, with the lack of a bachelor’s degree precluding them from career opportunity.  This barrier is particularly significant for learners who have taken on debt to pay for college but have no degree. Many of them will leave the higher education system worse off than before they entered it. Of the nearly 45 million Americans with college loan debt, nearly one-third have no degree, disproportionately affecting underserved borrowers. Degree inflation also has a profound impact on workforce diversity and economic mobility. According to the Society for Human Resource Management, “Because Black job candidates are less likely to hold a degree than white applicants, degree requirements can keep skilled and talented workers out of certain positions, which lowers their earning potential and makes creating diversified and inclusive workplaces more difficult for companies.”
The focus on degrees as the primary indicator of career readiness is on the decline, but what degrees are meant to represent is more relevant than ever. The value of a college degree for economic mobility and career readiness can be improved when seen through the lens of skills. This is not a matter of skills vs degree. It’s a matter of skills and degree. As more and more employers begin to value skills over degree for hiring practices, higher education can embrace skills as a new currency that adds both incremental value during a learner’s journey and enhances the value of the credential. This new currency can break down barriers, improve workforce diversity and create more equitable access to economic mobility for traditionally underserved and overlooked populations.
Some of the biggest issues facing higher education in the next five years are also the biggest areas for opportunity. By increasing efforts to make high-demand skills a critical component of the higher education system, more learners will be better-served through improvements in return, relevance and equitable access to opportunity.
Forbes, “The Convincing and Confusing Value of College Explained”, September, 2019, https://www.forbes.com/sites/brandonbusteed/2019/09/03/the-convincing-and-confusing-value-of-college-explained/?sh=3f4a66f4372d
The White House, “Fact Sheet: President Biden Announces Student Loan Relief for Borrowers Who Need It Most”, August, 2022, https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most/
Gallup, “Strada-Gallup 2017 College Student Survey”, 2017, https://news.gallup.com/reports/225161/2017-strada-gallup-college-student-survey.aspx
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Forbes, “Forget Bitcoin—Skills Are The Currency of The Future”, June, 2020, https://www.forbes.com/sites/scottpulsipher/2020/06/26/forget-bitcoin-skills-are-the-currency-of-the-future/
Harvard Business School, “Dismissed by Degrees: How Degree Inflation Is Undermining US Competitiveness And Hurting America’s Middle Class”, December, 2017, https://www.hbs.edu/managing-the-future-of-work/Documents/dismissed-by-degrees.pdf
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SHRM, “College Degree Requirements Hinder Black Workers’ Earnings and Career Advancement”, August 2020, https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/college-degree-requirements-hinder-black-workers-earnings-advancement.aspx
Author Perspective: Administrator