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Employers need to adopt skills-based hiring, US officials say

Gina Raimondo, the U.S. Department of Commerce secretary, is urging HR managers to adopt skills-based training and reduce their reliance on college degrees.

Filling open jobs and improving equity in the workforce will take job training and skills-based hiring by employers, said White House officials at a conference this week. The problem is particularly acute for Black workers, who are not being helped by job apprenticeship programs.

"The U.S. has chronically under-invested in workforce development," said Susan Rice, the domestic policy advisor for the Biden administration, at the virtual National Skills Coalition (NSC) Skills Summit 2022. The NSC is an advocacy group made up of workforce development groups and businesses.

The U.S. spends one-fifth as much on workforce development programs compared to other advanced economies, Rice said.

"This lack of investment is impacting all of us. A shortage of skilled workers saps economic growth," she said.

But Rice, along with Gina Raimondo, the U.S. Department of Commerce secretary, believes the $1.2 trillion infrastructure bill, approved late last year, will boost training.

Raimondo cited a need for employers to be more flexible in their hiring and consider an applicant's skills and capabilities. This means putting less reliance on academic credentials, she said.

"It is very hard to get a decent paying job in today's economy if you don't have some degree or credential past high school," Raimondo said. 

In requiring degrees and so many years of experience, HR hiring can be "formulaic," Raimondo said. The federal government ended the college degree requirement in 2020.

Maybe they don't have a four-year degree, but they can do the job.
Gina RaimondoSecretary, U.S. Department of Commerce

"Maybe they don't have a four-year degree, but they can do the job," she said.

Race a factor in opportunity

The infrastructure bill is expected to boost apprenticeship programs, but these programs are not helping as many Black workers as they could, said Alex Camardelle, director of workforce policy at the Joint Center for Political and Economic Studies. The organization describes itself as a "Black think tank." He spoke on a panel immediately following Rice's talk.

While he welcomed the attention apprenticeship programs are getting from the government, Camardelle said, "Just one in 10 apprentices are Black workers, so we have a long way to go."

Most bothersome is the general approach to government recovery policy, Camardelle said, which is "to just settle for unjust outcomes for Black workers."

Camardelle referred to labor data that shows Black employees trailing in hiring in the COVID-19 economic recovery. According to government data, the unemployment rate for Black workers was 7.1% in December, compared with 3.2% for whites. The disparity in hiring rates "is actually unacceptable" and points to "systemic discrimination," he said.

Degree requirements are falling

A study released this month pointed to more skill-based hiring.

"After a sustained period of degree inflation, employers' demand for bachelor's and post-graduate degrees is starting to decrease perceptibly," stated the report from the Harvard Business School Project on Managing the Future of Work and Emsi Burning Glass, a labor market analytics firm.

For instance, in 2017, nearly 59% of loan officer jobs required a B.A., declining to 43% in 2020. For a claims adjuster, a B.A. was sought in more than 61% of jobs, falling to 53.5% in 2020 in that same period, according to the report. 

Patrick Thibodeau covers HCM and ERP technologies for TechTarget. He's worked for more than two decades as an enterprise IT reporter.

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