What’s the value of a college degree for employers?

Is a college degree really necessary? Steve Jobs, Mark Zuckerberg, Bill Gates, and many others have been wildly successful without one. But 87 percent of executives and hiring managers do care about your higher education credentials, according to the latest report from the Association of American Colleges and Universities (AAC&U). Despite recent enrollment declines and a public crisis of confidence in higher education, most employers still believe a degree is worth the investment. As the job market evolves, institutions will need future-ready strategies to not only secure the value of a college degree, but continually increase its relevance in the workforce today.

Employers may believe a college degree is important, but do college degrees actually prepare students for the workforce? When the AAC&U asked whether college graduates possess the skills needed to succeed in entry-level positions, only six in ten respondents said yes. Just over half believe graduates are prepared for advancement and promotion. There is a skills gap, not only in technical readiness, but also in “soft skills,” such as communication, critical thinking, and ethical judgment.

For institutions to adequately equip their students with the knowledge and confidence required to succeed, career readiness training must be both comprehensive and ongoing. By looking beyond graduation, supporting continuous learning, and strengthening relationships with employers, institutions will not only help students compete in the workforce, but will remain competitive themselves in the evolving education market.

Bridging the soft skills gap

“The bottom line is that at a time when colleges and universities might be tempted to retrench resources, specifically to limit breadth of learning and skill development, they should not,” says Dr. Ashley Finley, vice president for research at the AAC&U, and the author of its report on workforce readiness. “[Employers value a] broad skill base that can be applied across a range of contexts.”

Beyond exposure to a variety of disciplines, this breadth of knowledge includes immeasurable skills such as critical thinking, professionalism, and communication. Working effectively in teams—the highest demand skill according to the AAC&U survey—is considered critical by 62 percent of employers, but only 48 percent believe recent graduates possess this proficiency.

The meaning of collaboration—particularly when scaled to communities outside the workplace—also varies by age group within the survey. While 53 percent of employers under 40 valued “experience working in community settings with people from diverse backgrounds or cultures,” only 34 percent of employers 50 and above agreed. This generational gap is an indicator that workplace expectations for cultural competence and other soft skills are evolving and will continue to do so.

Without adequate career training, applicant confidence also wanes. In interviewing 54 recent graduates, the Harvard Business Review explored how a lack of preparation leaves otherwise driven learners struggling in their transition to becoming employees. For many, this is less due to technical inadequacy than it is culture shock. In school, learners receive consistent and clear feedback, enjoy built-in support systems, and are typically only accountable to themselves. That can all change on the job.

While some companies do have strategies and programs in place to orient the newly graduated, institutions can do their own part by explicitly integrating soft skills into traditional curriculum and investing in workforce development resources. Not only will this ensure students are prepared for the post-graduation cultural shift, but it can equip them with valuable “active or applied” experiences such as internships that the AAC&U survey demonstrates as highly valuable to employers.

Supplying in-demand skills

The current U.S. job market is in the unusual state of having too many openings and not enough workers to fill them. “It’s not about a shortage of opportunities, but of skills,” reports University Business. “And it’s only going to get worse before it gets better. By 2030, it’s estimated that 6 million skilled jobs could go unfilled due to a lack of qualified talent.”

Many high schools are meeting this challenge by creating their own career and technical education (CTE) courses or partnering with local institutions that offer dual credit. By giving high schoolers the opportunity to explore career paths while gaining technical knowledge, these programs create a tangible impact, with CTE participants having higher median annual earnings than their classmates. And by clearing transfer and articulation pathways, higher education plays a crucial role in helping CTE students maintain their career momentum after high school.

An increasing number of postsecondary institutions are investing in vocational training, but community colleges and technical schools have long been at the forefront of this mission. A recent, innovative example is Atlanta Technical College (ATC) whose Center for Workforce Innovation matches training opportunities with open positions in the region.

Partnering with employers, establishing an “essential skills” curriculum, and investing in individualized career coaching has resulted in a 99% job placement rate for ATC students. The Center for Workforce Innovation serves as a model for how institutions can work collaboratively within communities to place their students after graduation and meet local needs.

Combining degrees and credentials

The demand for additional education—already on the rise before the pandemic—is growing exponentially. Between 2020’s massive shift to online learning and 2021’s “Great Resignation,” competency- or outcome-based education is flooding the market, and not all traditional institutions are keeping up. According to EdSurge, “microcredentials awarded by companies, industry associations, and other non-institutional providers … have increased around 75 percent over the last year.”

Upskilling is quickly becoming an expectation for employees to keep pace with digital transformation. Today’s jobs are continually evolving, and workers are investing in their own development to stay relevant. Many non-institutional providers are meeting this need by offering on-demand, affordable training that can be scheduled around existing careers and familial responsibilities.

Higher education has an opportunity to offer their own continuing education programs for alumni and other adult learners, but consumer-first trends will continue to drive the market. By embracing flexible, robust workforce development, institutions can stay competitive while addressing the pressing need for training today.

Preparing the workforce of tomorrow

As the job market evolves, so must higher education. The value of a college degree has demonstrated its staying power, but it can’t close the skills gap on its own. Applied experience and dedicated career readiness resources will equip graduates with the interpersonal competencies and confidence they need to perform well and advance on the job. Meanwhile, flexible credentialing programs can help current employees keep pace in their careers or change tracks entirely.

The current job market is not only an opportunity for recent graduates seeking new positions, but for institutions to adapt to meet emerging needs while exploring new business models. By doing so, higher education can compete within a consumer-first market while supporting lifelong learning for its students. While most alumni won’t go on to start trillion-dollar tech companies like certain degree-less outliers, they can confidently pursue their career goals with the credentials they need to succeed.