New Collar Jobs: Why Companies Are Prioritizing Skills Over School

New Collar Jobs: Why Companies Are Prioritizing Skills Over School was originally published on Forage.

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The skills versus degree debate has consumed hiring for years. What matters more, a candidate’s skill set or degree? Does it matter if they received higher education? How can we measure their skills if they don’t? Then, new collar jobs were born.

New collar jobs — or jobs that focus on a candidate’s skills rather than whether they have a degree — are rapidly filling up the job market. Here’s why companies are jumping on board and how to prioritize your skill set in your job applications. 

>>MORE: Top 5 Skills to Include on a Resume

What Are New Collar Jobs?

IBM executive chair Ginni Rometty coined the term “new collar jobs” in 2016. At the time, there were over half a million unfilled tech roles in the U.S., and Rometty wanted to fill them — but there weren’t enough applicants with the right skills.

New collar jobs evolved to fill the skills gap, find new sources of talent, and create a more inclusive workforce. These jobs, usually in tech, prioritize candidates with the right technical skills versus the right degree. You don’t need a formal education to be hired and succeed in these roles; you need the skill set and desire to continue learning on the job.

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Rometty started the shift toward new collar jobs at IBM by launching new collar training programs. These programs aimed to help IBM recruit new talent by teaching prospective candidates the job skills IBM was hiring for. In addition, the company created versions of these programs for other organizations, companies, and governments to use without IBM’s direct involvement.

IBM also pushed forward its new collar jobs wave by removing education requirements from many of its job positions. When Rometty and the team first prioritized skills over degrees, 95% of IBM roles required a four-year degree. As of 2021, less than half require one, according to a company letter.

Why Are Companies Prioritizing Skills vs. Degrees?

After IBM’s initial new collar jobs push, other companies have jumped on the skills over degrees bandwagon. 

For example, the percentage of jobs on ZipRecruiter that require a bachelor’s degree decreased from 14.2% to 9% from 2018 to 2022. In a 2022 report, The Burning Glass Institute found 46% of middle-skill roles and 31% of high-skill roles dropped their degree requirements between 2017 and 2019. At this rate, the institute predicts that 1.4 million jobs could open to workers without college degrees in the next five years. 

But why are companies embracing this shift? There are a few reasons.

Diversity and Inclusion

When IBM coined the term new collar jobs, one of its focuses was making its workforce more inclusive. Shifting to skills-based hiring over degrees allows people who aren’t able to get a degree — for financial reasons, for example — an opportunity to land these jobs. 

“Companies that are truly committed to equity, diversity, and inclusion and hire talent from historically excluded backgrounds understand that a college degree is usually an indication of privilege and opportunity,” Daniela Herrera, director of recruitment operations and ED&I at R/GA, says. “[A degree] is not necessarily an indication of skills, experience, interest, and value add.”

When a company prioritizes skills, it removes one barrier to entry. It shows that it cares less about your ability to afford and go to college and more about your skill set and eagerness to learn. 

Filling Open Roles

One reason new collar jobs evolved was out of a need to combat the tech talent shortage. For example, according to Cyberseek, there are only enough cybersecurity workers in the U.S. to fill only 68% of open cybersecurity roles.

>>MORE: Cybersecurity Career Path: Jobs, Skills, and Outlook

Employers initially used a college degree requirement to simplify hiring and weed out unqualified candidates. However, this requirement leaves employers with a much smaller pool of applicants, making them struggle to fill open roles.

According to the U.S. Census Bureau, under 40% of people 25 and older don’t have a bachelor’s degree. This means a majority (62%) of people eligible to work would be counted out of the job pool just from one degree requirement. 

“Companies are finally understanding that there are roles, jobs, disciplines, and responsibilities that don’t require a college degree,” Herrera says. “They’ve realized that they were getting in their own way when it comes to talent attraction and hiring.”

When companies prioritize skills, they open up their application pool to thousands more applicants, including people who have learned skills in alternative ways: bootcamps, apprenticeships, online courses or programs, or even through self-teaching.

With this approach, they’ll have more candidates to choose from and ensure that these people have the skills they need to do their jobs well.

“Most companies are targeting candidates that already bring the technical and functional skills needed to perform the job,” says Theresa Balsiger, vice president of candidate relations at Carex Consulting Group. “They are targeting candidates with proven work, volunteer, and skills experience, rather than hiring entry-level individuals with just a degree on their resume.”

Just as Good (Or Even Better) for Business

Since embracing the new collar jobs model in 2016, Rometty told Fortune that the employees IBM hires without bachelor’s degrees are just as successful as the ones who do have them and even those with advanced doctoral degrees. Hiring people without degrees who have skills isn’t a detriment to a company’s business — it can be an asset, saving time on hiring and growing a diverse workforce.

Diverse workforces have even been proven to be better for business. According to Research and Markets, diverse companies have 2.5 times more cash flow per employee, and inclusive teams are more productive by 35%.

How to Prioritize Skills Over Degrees When Applying 

If many companies are shifting to prioritize skills over degrees, how can you make sure you highlight your skill set in your application? 

Identity What Skills Employers Are Looking For — and Include Them in Your Application

The Burning Glass Institute finds that when employers remove degree requirements, they get more specific about what skills they’re looking for in their job descriptions. So closely scan the job description before applying to determine what skills the company wants. If it lists specific skills in the “qualifications” or “requirements” section, you need to include these skills (if you have them) in your application materials.

You can include a skills section for your hard skills on your resume and list them in bulleted form. Use soft skills in your resume job descriptions when explaining what you did in each experience. For example, you can write that you “collaborated” with team members or used problem-solving skills to find a solution. 

“Don’t leave any skill of importance out,” Elisa Pineda, talent acquisition manager at Forage, says. “If you had a project you did and are proud of and can claim as your own, display it. Show what you’ve done. Make a website. Be creative. You don’t even have to pay for many of these things like online portfolios anymore, so take advantage of that, too. Make it your own and relate it to the work you want to be doing.”

In the interview, come prepared with examples of how you’ve applied these skills, whether in a volunteer position, extracurricular activity, internship, or personal project. 

>>MORE: Prepare for interviews and learn how to answer common interview questions with Forage’s interview tips.

Continue Building Your Skills

“Gaining some part-time, intern or volunteer experience is really wise,” Balsiger says. “Companies hire for skills learned on the job, even when it’s a junior role. Taking up some skills coursework online can provide a great competitive advantage, particularly in the tech field.”

Courses, certifications, virtual experience programs, and independent projects are great ways to build up skills to include in your applications — and many of them are free.

Should You Still Include Your Degree in Your Application?

Just because employers are prioritizing skills doesn’t mean you should hide your degree. 

Include it on your resume and discuss it in your cover letter and interview to explain what skills you learned while getting your degree. Even as new collar jobs become more popular, a degree can signal that you’ve learned about a subject and may have particular skills because of your coursework. 

>>MORE: Should I Put My GPA on My Resume?

“If a candidate has a college degree and they’re proud of that achievement, they should still add it to their resume and LinkedIn profile!” Herrera says. “But in case you don’t have a degree, this new ‘trend’ will help open some doors that didn’t exist for you before. Either way, make sure you have a well-rounded resume and LinkedIn profile so you can showcase your skills, expertise, and interest.”

New Collar Jobs: The Bottom Line

Companies are prioritizing hiring for skills over degrees more than ever. They’re not just looking to fill the skills gap but also to build a more inclusive workforce that opens opportunities to people who don’t have formal degrees. Whether you have a degree or not, you can take advantage of this hiring trend by highlighting your skill set in your application materials — whether in the interview, on your resume, or by adding skills to your LinkedIn profile.

Looking to build your technical skill set? Gain the tech skills you need to succeed in the workplace with Forage’s virtual experience tech programs.

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The post New Collar Jobs: Why Companies Are Prioritizing Skills Over School appeared first on Forage.