Should employers drop degree requirements?

College degrees are still valuable, but are overvalued in hiring

Here are two facts that are both true at the same time.

Fact one: a college degree is still a good investment over the long run. BLS data from April 2026 shows that unemployment for workers with a bachelor's degree or higher was 2.8%, compared to 4.7% for high school graduates and 6.4% for those without a diploma. The earnings premium holds, too. Degree holders consistently out-earn their peers across nearly every industry.

Fact two: a college degree is failing the people who just earned one. The Federal Reserve Bank of New York reports that the unemployment rate for recent graduates (ages 22-27) hit 5.6% in early 2026, higher than the national average of 4.2%. And 42% of those who are employed are underemployed, working in jobs that don't typically require a degree. That's the highest rate since 2020.

So a degree helps over a 30-year career. But right now, nearly half of new graduates can't find work that actually uses it. BlackRock CEO Larry Fink warned that 2026 graduates could face the highest jobless rate in years, partly because AI is making entry-level white-collar roles obsolete faster than anyone expected.

If you're an employer still requiring a four-year degree for roles that don't functionally need one, this is worth sitting with.

Why degree inflation is a problem

Degree inflation is what happens when employers gradually add bachelor's degree requirements to roles that never used to need them. Harvard Business School found that in 2015, only 16% of production-worker supervisors actually held a college degree, but 67% of job postings for the same role required one. 

That’s what we’re going to call “credential creep,” and the consequences can compound over time. 

Keep in mind that 62% of American adults don't hold a four-year degree. When you require one for a role that can be performed without it, you eliminate the majority of potential candidates before they ever apply. 

You also don't actually eliminate bad hires, since a degree tells you very little about whether someone can actually do the specific work you need done. (If you want to know what does predict job performance, the research is pretty clear.)

And this filter doesn't fall evenly. OECD data shows that 70% of young adults with at least one tertiary-educated parent earn a tertiary qualification themselves, compared to just 26% of those whose parents didn't finish upper secondary school. This is a nearly threefold gap driven primarily by family background. 

As a result, when employers use degrees as a hiring filter, they’re unintentionally perpetuating an access gap that starts at birth.

Why dropping the requirement isn't enough

The skills-based hiring movement has made real progress. 

SHRM's 2025 Talent Trends report found that 27% of organizations have eliminated degree requirements for certain positions, and 76% of those have successfully hired candidates they otherwise would have missed. In the meantime, the Tear the Paper Ceiling campaign has pushed STARs (workers Skilled Through Alternative Routes) into the mainstream conversation.

But, as we all know, policy and practice are two different things. Harvard and the Burning Glass Institute found that across 11,000+ job postings where companies dropped degree requirements, hiring of non-degree workers increased by just 3.5 percentage points. Adjusted for scope, fewer than 1 in 700 new hires actually benefited. 

The TL;DR: The job posting changed, but the hiring behavior did not. 

This happens because recruiters and hiring managers are humans with habits, and that’s more than understandable. 

For decades, degrees have been used to demonstrate competency. If someone has a degree in computer engineering, it must mean they can do these coding tasks. 

When you remove the degree shorthand, recruiters won’t suddenly start evaluating candidates differently, and many will likely just feel less sure about who to pick. Without a replacement signal, the old instinct wins.

Recruiters need to be trained to replace degree signals with skills validation. It can come from stackable credentials and microcredentials, verified work experience, or objective assessments that measure whether a candidate can actually perform the tasks the role requires. 

The demographic cliff makes this urgent

This isn't just an equity argument. It's a supply argument. The birth rate dropped sharply in 2008, and college enrollment rates have been declining for over a decade. The pool of traditional four-year graduates is shrinking and won't recover. If your hiring model depends on a steady supply of degree holders, your model is becoming structurally unsustainable.

Meanwhile, the global talent shortage persists. ManpowerGroup's 2026 survey of 39,000 employers across 41 countries found that 72% report difficulty filling roles. In the U.S., 69% of employers say the same. Healthcare, skilled trades, and manufacturing are among the hardest-hit sectors, and these are precisely the industries where degree requirements are least justified and most damaging to the talent pipeline.

Employers now need to build the systems to evaluate candidates on what they can do rather than where they went to school or even if they have a degree at all. This includes taking steps to: 

• Write clearer job descriptions tied to real job responsibilities 
• Use broader sourcing strategies
• Leverage remote-friendly assessments that don't penalize non-traditional candidates, and
• Adopt a willingness to hire for 70% readiness and develop the other 30%.

The degree still matters, but it shouldn’t be a gatekeeper 

Nobody serious is arguing that higher education has no value, because it very clearly still does.

But a four-year degree should not be used as a blunt instrument for hiring decisions. It doesn't tell you whether someone can actually perform a specific job, and it certainly doesn't age well as a measure of current skills. 

And perhaps most significantly, it systematically excludes millions of qualified workers whose abilities were built through experience, certifications, community college, military service, or sheer persistence.