Hartford Courant Op-Ed: Skills-based Hiring Is The Future

Note: This op-ed ran in the Courant but is subscription only to view. See it below.

You may recall in 2017 when Peter Theil, the investor, encouraged “uniquely talented” young people to drop out of college in exchange for $100,000 to build their start-up.

You probably thought it was a ludicrous idea.

But guess what? Today, the world – and our children’s futures – are headed toward a skills-based economy. It makes economic sense, especially for those from under-resourced families who just can’t afford a college degree — or whom, as was revealed in a study recently published by Opportunity Insights, a group of Harvard-based economists, typically lack the financial pedigree to get accepted into the most elite colleges.

Top financial and education industry leaders agree based on insights shared at the recent Milken Conference in Los Angeles. According to former American Express CEO Ken Chenault, in the 1950s, 60s and even 70s, most people graduated high school, maybe had a year or two of college and still got into executive positions.

But that has changed dramatically. As time passed, companies started using college degrees as a way to vet people. Chenault explained that the philosophy of “we’ll train them when they get here” became more prominent for companies.

The inability for those from under-served communities to pay for college or for tutoring to improve grades and standardized test scores has been a huge barrier to financial security. As we learned this week, even those from under-served communities with similar grades and test scores as those from higher income brackets were much less likely to be accepted into top colleges. How can you ever compete with that if you lack financial resources?

Today, the headwinds are changing for a host of reasons. Jobs remain unfilled. Companies are looking for capable, diverse talent. In Connecticut, for example, labor force losses continued for a sixth consecutive month, bringing the 12-month decline to 39,600, according to the CBIA.

Massive student debt, $33,000 on average for a four-year degree and nearly $50,000 for those attending for-profit colleges, along with a strong desire to be their own bosses, are causing young people to re-think college. A recent survey showed that nearly 60% of high schoolers say they’ll be successful if they do not earn a four-year degree and 48% say ideally college would take three years or less. Employers in many top states tell me they’re looking for specific capabilities — in many cases, basic foundational business and leadership skills.

These new trends are leading to the creation of new companies and efforts – like Girls With Impact – to train young people for a changing, more entrepreneurial-driven workforce. Headquartered in Connecticut, Girls With Impact developed a modern business curriculum to help level the playing field for young women in business, focused predominantly on those from under-privileged backgrounds. Its skills-based training — which has served over 10,000 to date – is building critical confidence and capabilities needed for first-time hires.

According to Chenault, the skills-first mindset can be one of the most transformative approaches to business. Yet, not enough large companies have adopted this way of thinking for a variety of reasons, ranging from bureaucracy to the crutch college degrees provide.

This transformation of hiring practices is starting to be seen across industries. Medical offices are turning to nurses to conduct certain procedures formerly only handled by doctors. Many programmer and data analyst roles are being filled by people without traditional college degrees. The apprenticeship is getting new life with states from California to New York putting dollars behind this effort and organizations like Girls With Impact aiming to connect its business school graduates with employers hungry for diverse, female talent. And for the high percentage of Black and Hispanic talent without college degrees, it provides renewed hope and opportunity. It will also help close the ever-growing wealth gap. Who knows: maybe we will see these individuals rise to leadership positions as they build skills on-the-job, as companies invest to retain them, and as investors demand diversity at the top.

This new shift to a skills-based economy does not mean a strong liberal arts degree is not valuable; it can be quite invaluable. What it does mean is that millions of jobs can be filled with cost-effective training while removing the debt burdens that have held people back from owning homes, saving for retirement and simply enjoying life.

Jennifer Openshaw is CEO of Girls With Impact (www.girlswithimpact.org), a 501c3, which operates the nation’s leading business school for under-resourced young women and girls.