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- A new Indeed analysis examined educational requirements noted in job postings.
- Around half of US postings on the platform in January didn't note a particular education required.
- Job seekers can focus more on developing skills than formal higher education.
People searching for work, such as the 1.5 million unemployed high school graduates aged 25 and older with no college, may be in luck: Job postings are less likely to have formal educational requirements than a few years ago.
That's according to a new report from career-site Indeed analyzing educational requirements in US job postings since January 2019. The report also noted that 87% of the 47 occupational sectors looked at had fewer postings with bachelor's degree or higher educational requirements than in January 2019.
As employers shift from formal educational requirements to skills-first hiring, job seekers might want to think about their skills.
Indeed found 52% of US postings on the platform didn't state an education requirement in January. That's an increase of 4.0 percentage points from January 2019. The share of postings noting a bachelor's degree or higher dropped by 2.6 percentage points from January 2019 to 17.8% this past January.
The data used in the new report was adjusted to account for job title mix changes. Additionally, the lowest educational requirement was looked at if there were multiple ones stated in a job posting.
Labor shortages could push companies to focus on skills, not formal education
Cory Stahle, an economist at the Indeed Hiring Lab, told Business Insider that as "the labor market got tight, employers started advertising more benefits and sharing pay more openly and things, we wanted to see if they were also cutting back on educational requirements to attract people."
Some companies are doing skills-based or skills-first hiring, which can mean prioritizing or focusing on a job seeker's skills, such as Delta Air Lines and IBM. Others may have to consider this in the future if they can't meet talent demand.
Stahle noted that as the population ages, the US is "up against demographic headwinds" which could mean the talent pool begins to shrink. Certain industries could see long-term labor shortages, economists like Stahle previously shared with BI, such as nursing or natural resources extraction.
"I think for many employers, being able to focus on the skills where it makes sense is going to be one way that they can mitigate some of those challenges that are going to arise through demographic-type of pressures," Stahle said.
Cutting out education requirements in postings can have pros and cons
Stahle said a lot of the data highlights the "importance of cultivating skills going forward."
"There's a lot of promises behind skills-first hiring to potentially bring in more diverse candidates and candidates who haven't had access to these types of opportunities in the past," Stahle added. "As a job seeker, being able to see skills in job postings and be able to cultivate those skills is a really, really helpful step forward in career paths."
Even with a shift away from college degree requirements, there could be assumed credentials and levels of education, per the new report. Teachers, some medical jobs, or trades like plumbing might need certifications. An aspiring candidate for a driver gig may need a commercial driver's license.
"There's a lot of sectors where it's really common for jobs to not include any educational requirements whatsoever," Stahle said. "If you look at a sector like driving, it's pretty uncommon to ever see educational requirements."
Some occupations that do have extensive educational requirements may not list them explicitly. Around 61% of physicians and surgeon postings in January didn't have an education requirement compared to around 32% mentioning a bachelor's or higher. Stahle said, "when you go to hire a doctor, it's just assumed that they'll have certain levels of education."
Stahle said it can be helpful for job seekers to filter openings by education level. Plus, Stahle said it can save the employer and job candidate time.
Despite a shift toward skills-based hiring, many companies may not actually be bringing on as many non-college employees as expected. A report from Burning Glass Institute and Harvard Business School Managing the Future of Work Project's researchers noted that there's been a major difference in the number of roles in 2023 that have cut degree requirements compared to back in 2014, but some companies haven't made a "meaningful difference" in their hiring practices "following their removal of stated requirements from their postings."
"Among the roles that fit the strict requirements of our sample, the number of roles no longer subject to degree requirements increased almost fourfold since 2014, down somewhat from a peak in 2022," the report said. "But placed against the backdrop of the millions of roles employers hire for annually, Skills-Based Hiring has made only modest inroads. Controlling for occupational mix, the percentage of job postings that require a college degree has only fallen by 3.6 percent over that period."
Stahle said the entire hiring process "needs to be followed through to make sure that it actually leads to people without the education being hired in that as well."
What skills do job seekers need to have?
According to a LinkedIn analysis of skills based on its members' data and job listings, adaptability is the "top skill of the moment."
"We're in a moment where the economy is starting to reset what skills are valued the most based on what AI capabilities are and what that means for human capabilities and the needs for people at work," Aneesh Raman, a workforce expert at LinkedIn, said.
The new Indeed report also looked at the impact of generative artificial intelligence.
"We found that jobs and sectors with higher educational requirements are also those that are a little more exposed to generative AI at the moment," Stahle said.
Overall, Stahle said having a plan to build skills is going to be important for a job seeker's career.
"From a lot of the other research we've done, we've seen that the length of job descriptions has gotten longer over time," Stahle said. "Employers have not only become more likely to put retirement benefits and other types of perks in postings, but they're also putting more and more skills and trying to do a better job of enumerating skills."
Did you land a job without a college degree? Reach out to this reporter to share at mhoff@businessinsider.com.