With companies embracing technology to reduce their head counts, they need employees who have higher-level skills. In addition, 30 percent of companies are increasingly hiring college-educated folks for jobs previously held by high school grads, simply because they can.
Moreover, 27 percent of respondents said their educational requirements for employment have increased over the past five years. If we just look at the segment of companies hiring STEM (Science, Technology, Engineering, and Math) workers in 2014, the numbers are even more remarkable – 43 and 46 percent respectively.
According to new research from CareerBuilder, two major factors inform this trend. While skills and job requirements are evolving, the tight labor market, the large pool of skilled job seekers willing to take any kind of work, also is a factor. Either way, companies say that their big data tells them there are real benefits to hiring more college-educated workers.
This rising bar seems to extend across the board to include people with higher levels of education. One in five employers (20 percent) is now targeting those who hold master’s degrees for positions mostly held by those with four-year degrees. On top of that, a full third (33 percent) of employers are sending current employees back to school for advanced degrees with, a majority of that group (81 percent) at least offering partial, if not full, funding.
Doing the math, CareerBuilders’ chief researcher, working with academics from Wharton and New York University, came up with some impressive results: the data suggests that for some occupations, raising education requirements pays off.
Having analyzed the career histories of more than 20 million resumes, the authors connected these workers to the profitability of thousands of employers. A 10 percent increase in sales workers with collegedegrees is associated with about $31,000 higher value added per employee; and a 10 percent increase in management workers with college degrees is associated with about $63,000 value added per employee. Interestingly, these increases do not seem to apply to information technology or computer science workers. (We have our own theories about this one.)
Wise companies will do their own math and determine what is their particular case. However, these results are a clear sign that businesses will do well to continue to invest in training and development. With more than 55 percent believing that "skills for my positions have evolved, requiring higher-educated labor." For economic developers, the messages are even clearer: "Keep your young people in school" and invest in your colleges and universities.
For more information about the author’s research, visit www.talentequationbook.com.
