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3 Steps To Hire With Lower Education Requirements

Feb 25, 2018: It’s time to rethink the qualifications you require in a job applicant. That diploma has value, but there are ways to find good candidates without diplomas.

The tight job market is translating into companies having trouble finding qualified applicants for open positions. DHI Hiring Indicators, developed by Professor Steven Davis, shows much longer time to fill job vacancies now compared to even the pre-recession boom. Economists at The Conference Board see employment growth for people without diplomas, both no-college and even no-high school.

Also influencing people is an important new book by Bryan Caplan, The Case Against Education. Caplan says:

While the labor market rewards good grades and fancy degrees, most of the subjects schools require simply aren’t relevant on the job. Literacy and numeracy are vital, but few of us use history, poetry, higher mathematics or foreign languages after graduation. The main reason firms reward education is because it certifies (or “signals”) brains, work ethic and conformity.

Those three traits are all valuable in the workplace. Schools don’t help people be more productive, but they signal who is likely to be productive. One of the best pieces of evidence is that a person who completed 13 years of K-12 plus four years of college, for a total of 17 years, earns a lot more than a person who leaves college one semester short of a degree. If education were producing skills, you’d expect the late dropout’s earnings to be about 97 percent (16.5/17) of the graduate’s earnings. But that’s not the case.

When labor is abundant, requiring a diploma is an easy way to separate wheat from chaff. It isn’t a perfect way, but it’s easy to administer. For example, a particular job may not require the skills of a college grad who majored in Russian literature, but that grad certainly has brains, persistence and tolerance for BS. But with very low unemployment, it may be time to relax those standards.

What will you, the employer, get if you hire the college dropout rather than college grad, or high school dropout rather than high school grad? You’ll probably get less of those three signaling elements: brains, persistence, acceptance of rules. Here’s how to work through the issues.

  1. Brains: If the job requires pretty smart people, look for other evidence of brains. The person admitted to a top university is certainly smart, even if he or she dropped out. With other candidates, you can look for indicators of brains from previous jobs the person has held or from hobbies.
  2. Persistence:  is, in my experience, the biggest difference between completion and non-completion of degrees. I consider my own degrees a tribute not to my brains but to my damn-fool stubbornness. In a highly supervised work environment, you don’t need to worry so much about persistence. Where people work independently, though, this is a vital attribute. Look for candidates who can demonstrate persistence or grit another way, such as through a previous job, volunteer activity or an outside interest. Keep in mind that many young people are not ready to sit down and study at age 16 or 20. That’s especially true of males. But with some maturity, even men buckle down and work.
  3. Conformity: Finally, the graduate demonstrates a tolerance for following rules or putting up with BS. Schools are full of silly rules, arbitrary requirements, and process-oriented standards that serve the bureaucracy of education but add little to the student’s knowledge or skills. If your company has lots of rules, you probably need the signaling that comes from the diploma. When I’m in the hospital, I want a nurse who follows the rules. I’ve toured factories that use dangerous chemicals; those are good places for rules followers. But I’ve also seen companies that keep rules long after they have lost their reasons for existence, or for trivial bookkeeping convenience. If this is your company, first go into full Trump mode and cut 22 regulations for every new one issued. (And if you don’t really cut 22 regulations, just say you did to make the point.) If you can’t cut the rules, because of safety requirements, you probably need to keep hiring graduates.

There’s no one answer for every company, but any business having trouble finding talent in today’s tight labor market should consider easing back on degree requirements. However, never cut back on the core values that drive your organization. That might be honest, respect for customers, or a safety concern. Watch my YouTube video to learn more about the need to hire for core values.