According to the March Bureau of Labor Statistics (BLS) report, the unemployment rate is 3.8%. This indicates a competitive job market and many employers are dropping their degree requirements to focus more on hard skills to grow their workforce.
College enrollment has changed based on the type of school
According to the National Student Clearinghouse Research Center, Fall 2023 college enrollment increased by 1.2% which was its highest gain since the pandemic. However, those increases were primarily at community colleges with 118,000 total student enrollment. In comparison, to four-year colleges which saw 38,000 students enrolling in public universities and 16,000 enrolling in private nonprofit colleges.
Freshman enrollment for 20 year-old students or younger remains the same
Freshman enrollment increased for students over 21, by 6.3% in 2023. While freshmen enrollment for those who were 20 or younger remained the same, at 5.3%, which fell below the 2019 level.
Concerns Generation Z has for attending a four-year college
As Generation Z continues to enter the workforce, many are looking for the most cost-efficient and fastest way to achieve their career goals. Which often doesn’t align with attending a four-year college, specifically because of:
Increased Costs - According to the National Center for Educational Statistics, being a full-time student living on campus during the 2021-22 school term, had a total average cost of $26,000 per year for attending a public college.
Time Investment - Generation Z typically seeks faster results and wants to start their careers sooner, instead of waiting until they complete a four-year program. Getting on-the-job training is usually a more efficient way to get a higher salary and more promotions instead of delaying the process.
Debt Accumulation - Since the average public university costs approximately $26,000, a four-year college degree could result in $104,000 in total debt.
Job Placement - Since many watched their parents experience job loss during a recession, Generation Z often considers how a particular job will meet their financial obligations, including student loans. If a particular degree doesn’t lead to a high salary, then many will consider it a wasted investment.
Types of in demand hard skills
Hard skills, the technical expertise and experience to solve tangible problems is what employers are gravitating towards in lieu of a college degree. According to Burning Glass Institute, in November of 2022, only 41% of job listings of U.S. based companies required a bachelor’s degree. Types of hard skills that most employers need consistently regardless of a degree, include:
Alternative educational programs that can replace a college degree
Millennials and Generation Z are considered digital native generations, who were exposed to different technologies throughout their lives. Because of this, many skills that have been learned can also be used in the workplace. Combined with the following programs also makes it easier for companies to expand this knowledge so it can best serve their customers.
Apprenticeships - Typically professional business programs or vocational occupations where the employee shadows and works with an experienced worker.
Company training - Large corporations such as Apple, IBM, and Google offer company training programs that develop employees to learn specific company applications and methods.
Internships - Working for a company on a particular project that can either be volunteer or paid, which gives the employee experience to collaborate with future businesses and teams.
Certification programs - Usually a specific skill or program that is a smaller course load that will result in a certification such as business management, analytics, and finance.
Benefits for employees who don’t have a college degree
More earning power - According to a January 2023 ECMC survey, 35% of teens thought their post high school education could be done in two years or less. Some of these programs such as radiation therapy or software engineering can also earn over $100,000.
Faster promotions - The sooner an employee starts working, they will have more knowledge about their company. This also allows them to obtain seniority and meet managers who could promote them within the organization, which can give them a competitive edge.
Debt reduction - With the rise of college tuition, selecting a two-year or certification program is an economic way to diminish student debt and put the employee in a stronger position to purchase a home or car in the future.
Benefits for employers who hire employees without college degrees
Focused training - By utilizing company training programs, employers can customize it to suit the needs of the business. This allows for more consistency among all trained employees, which often brings clarity and increased productivity.
Better retention - As an employer who offers training opportunities, new hires will appreciate the value of this investment in their future career. This in turn, will encourage the employee to stay longer to develop their skills which can be used throughout the company.
Employee referrals - When existing employees tell their family and friends about the various career opportunities, this referral can help reduce the time and money needed to recruit other job candidates. According to GoRemotely.com, referred employees in 2022 were four times more likely to be hired than those who were not referred.