Helping Employers Move Beyond Degrees To Hire Based on Skills and Potential

Welcome to the Future of Education. And now, here's your host, Michael Horne.

Welcome to the Future of Education, where we are dedicated to building a world in which all individuals can build their passions, fulfill their potential, and live a life of purpose. And to help us think through that, today, I'm tremendously excited we have Clay Lord, he's the director of foundation programs at charm, joining us to think about how we help unlock that path of progress for individuals, employees, and their jobs, but really, employers as well, that can get so much more out of those individuals when there's a better match in all facets of how they work with each other. So, Clay, thank you so much for joining us today.

Of course. Thanks for having me.

Yeah, no, you bet. Your work, obviously gets to interact with lots of different individuals, lots of different companies, creating changes in a variety of ways. But just before we dive into that, talk us through, through your own path to the role you're in now and your passion for it and sort of how you got to know SHRM originally.

You know, it's an interesting and sort of circuitous story. I actually. So I've been at SHRM foundation for about 18 months now, and I, prior to that, for about 20 years, was in the arts and culture sector, working at the local level and then at the national level on a variety of issues that I would now sort of roll up together as workforce issues for the cultural sector in the United States, which is a sector that mirrors a lot of the populations that we work on now at the SHRM foundation, in that it is sort of, generally speaking, chronically economically insecure. It's extremely diverse. It doesn't have the strongest voice as a class when it comes to policy. And so I came out of Georgetown. I grew up with a lot of privilege, went to a really good college, dove in the cultural sector, and through a lot of engagement with a lot of different partners, developed my understanding of what equity meant and my understanding of how I got to where I was and where that was me and where that was, the conditions that I was given at birth and so have since then. Basically tried to devote a lot of my work and my life to increasing opportunity for folks who are otherwise sort of left out in the cold because they don't work within the same systems or don't have the same advantages as some people do. And so I ended up at SHRM really, because I knew some folks who were working at SHRM. SHRM is the largest society for HR professionals in the world. It has 340,000 employer members, all across the world, predominantly in the United States. And then the foundation for SHRM is one of the only real locuses for driving employer action, particularly through the HR function, to be agents for social good. And so it seemed like an interesting fit for me as I was trying to navigate from the sort of very important but niche work in arts and culture into broader conversations about workforce and the future of work.

Super interesting to hear that pathway. And I love how it's not linear and yet ends up in a place of passion for you. And on that topic, obviously over the next decade, you all have set a lofty goal of aiming to transform hiring and advancement practices for 100,000 employers, 500,000 HR professionals, managers, executives, and specifically, as part of that, as I understand it, your aim is to shift away from a degree centric hiring model toward a skills first model, among some other characteristics. And so I'd just love you to talk through what would that look like right when it's done? And why does it matter so much?

Well, it's a great question, and I think that the sort of short answer is that it is responsive to the evolutions in how people are being educated and how they're trying to find their way into work. So right now, today, so not 10 years from now, but today, two and three working age adults in the United States do not have a four year degree. And today three in four job postings require a four year degree when they're posted. And so it's sort of this significant and ongoing mismatch between where and how people are finding their skills and aptitudes and competencies, where they're developing the things that they can bring to bear in the workplace, and what is required as a sort of first gateway to get through in order to access a lot of jobs. And so among three focuses that the SHRM foundation has, one of them is what we call widening pathways to work. It's focused on two sides of that coin. So one of them is around untapped pools. So really helping employers understand where and when and how to engage folks who are from groups that have historically been marginalized out of the job market, including people with disabilities, people who've been justice impacted, people who are connected to the military, older workers, and opportunity youth, which are people age 16 to 24 who don't work or go to school. And then on the other side of that coin is the other part of widening pathways to work, which we call skills first at work. And as you mentioned, we have a significant focus on helping employers to shift their hiring and Retention practices, from being degree centric to, to embracing a sort of broader aperture of hiring and advancement. That is what we shorthand to is Skills first, which is not to the exclusion of degrees. It's to say people get skills in all sorts of ways. They get them at various moments in their lives. If they're doing it right, they're learning new skills every single day. And all of those skills deserve to be taken into account when you're trying to hire for what is essentially a bundle of skills that we call a job. And so at SHRM foundation, the way that we're making that investment, and we are an operating foundation, so we raise dollars and then spend them on tools and trainings and other programs and services. The way we're making that investment is by creating the conditions to help employers. 90% of whom today say adopting Skills first strategies is a good idea, but only 15% of whom are actually saying they're doing anything about it. To move from that place of agreement that most employers are in to a place of action where they can take incremental, measurable manageable opportunities for change and they can move towards a Skills first mentality that allows them to access the full spectrum of talent. You asked what that looks like. Well, in 10 years, if we do it right, we will hit what we think is an inevitable tipping point farther down the line sooner. So we think that Skills first is the future, whether we do anything about it or not. We think that anyone who thinks that we're not moving in the direction of more and more people accumulating the skills, competencies, aptitudes and gifts that they have outside of the walls of a four year institution are just going to be left behind. But we also think that there's a way to do this movement that's chaotic and challenging for the world of work. And there's a way to do this movement that, that can allow for more people to progress at their own pace and get to a place where they are arriving there healthy and ready to support the full spectrum of talent. And so for us, if we get to that moment, we will have 100,000 employers who have demonstrated that they've moved in the direction of Skills first hiring. We don't think it's flipping a switch. We don't think you're degree centered one day in skills, the next day. But we're going to be building maturity models to test how employers are doing and how much they've embraced these practices. And we think that there are, you know, There are nearly 3 million HR professionals and of course, millions more who touch the hiring function every year. And we think that even a small percentage of those which we tag at 500,000 HR professionals, hiring managers and C suite folks, if they were taken through and educated more fully on skills first hiring and advancement practices, then we would hit a tipping point where, you know, our goal ultimately is that skills first hiring is ubiquitous and unremarkable. It is the thing that happens. It's the water that's all around us right now. What's ubiquitous and unremarkable is a degree centered mindset and that leaves a lot of people out. But if we can change that paradigm so that the default is that the ubiquitous and unremarkable thing is to hire for the full spectrum of skills and competencies that are necessary, necessary to do a job regardless of where a person got them, when they got them, how they got them, then we can open up that aperture and allow many more people to access work and many more workplaces to have the benefit of the full spectrum of talent.

Yeah, it strikes me that fundamentally you want employers, companies, right, to be hiring people that are going to help them make progress and for the individuals to be recognized not as a bundle of credentials, but more around the dignity that each person brings through the collection of their experiences to the table to show that they can help that employer make progress. And by the way, in their own lives, they get to make progress as well as it'll better align with the things that their capabilities and presumably what drives their energy. I'm curious, you started to allude to it, right? It's not. This isn't a switch, right. That you can just flip. It's why you. Yes, an employer says we don't, you know, we're dropping degree requirements, doesn't mean that they're not hiring based on degree the next day. I'm curious, like what are those big barriers toward moving the, toward this vision that you see right now out there?

Yeah. Well, so when in our research, the barriers in general towards moving from degrees to skills, there are three of them. The first we talk about as the ROI being murky. So right now the return on investment for a degree centered practice is relatively well known. Sometimes it works out well, sometimes it works out poorly, but when it works out poorly, the blame is usually placed on the candidate, not on the business or the HR provider. So the shorthand I use to talk about that is if you are hiring and you hire five people from Ivy League schools and two of them don't work out, then the assumption is that something didn't work out with those two people. If you hire five people and you hire those five people from skills based backgrounds, they don't have a four year degree from anywhere, let alone from an Ivy League school, and two of them don't work out, then the assumption is that you, the HR professional or you, the hiring manager, did something wrong and you took a risk that was too big. So that's the first one. The second one really has to do with trust, quality and knowledge. So right now There are about 60,000 providers of credentials in the world and there are over a million credential options available for people to take many of them for free and many of them of dubious quality. Some of them can be very high quality, but it's a little bit hard to tell. And then on top of that, you've got an ever growing number of startups who are vendors in this space who are trying to take advantage of this groundswell movement. You've got a significant number of products and tools that are being developed both within the kind of core tool stack that's necessary for hiring today, and then also in all of these sort of emerging spaces like AI and so on. And then when you pair that with this third challenge, that knowing how to move from degrees to skills is very different than believing that moving from degrees to skills is a good idea. We've got this sort of moment of challenge, particularly for small to mid size employers, but also for others within large employers who are interested in where there's a challenge around quality and trust in the products that they would need in order to make that shift, and then general baseline knowledge about how to do so. So that's the second one. And then the third one basically comes down to risk aversion and loneliness. So right now, very, very naturally, businesses are risk averse, generally speaking. So when what you are doing is setting up a paradigm where they can either stay the way they are and deal with the challenges of today and be ill prepared for the future, but be okay right now. Or you ask them to take a leap into something new using language that maybe expresses that newness, expresses the riskiness and innovation aspect of it, instead of the fact that it's sort of an inevitable incremental shift. And then you pair that with the fact that often these movements around skills start with a single person who is interested in changing their practices, or start with a single business within a sector who is at the front of that was the vanguard. You create conditions that are sort of not great for business folks when they're thinking From a business perspective and sort of front load that risk and challenge instead of the focus on opportunity and inevitability. And so those three together are. There are lots of things, but we sort of consolidate them into those three pools of challenges that employers are facing. And then our goal is to build tools and trainings and coalitions and resources that tackle each of those challenges by consolidating information in a way that's consumable, by raising awareness of the positive ROI associated and reducing the myths about how disruptive and challenging this process can be, and by creating opportunities for coalition and community where employers can progress together instead of feeling like they're out on the branch with everyone else watching them to see if they fall.

Yeah, that. No, that makes sense. So, so let's, let's tackle that risk aversion. One, because to your point, it's often said that governments and companies, they're great at dropping degree requirements, but at the end of the day, for hr, mitigating risk is important and hiring someone with a degree just feels less risky. As you said, it's like back in the day, right? You never got fired for buying IBM was the saying. So I'm just curious, like how, you know, what do those tools look like that really de risk this and give them the security that they can make that jump to hiring someone perhaps without a degree, but who has maybe a more demonstrated set of experiences that they can actually step in and do that job?

Well, yeah, I mean, it's a good question. And risk of course comes in a variety of forms. So one of the things that we think about is the different types of risk that are at play and the kind of more obvious ones have to do with the financial or structural risk to the organization. And so we're looking at ideas like whether there's a way to de risk the near term financial obligation of skilling through low interest or no interest loans, through mini grants, through consortium models, things like that that then would allow for proof of concept. We have done that actually in some of our pilots where there's small groups of folks who are employers and they receive some seed money in order to do an intervention. And we find that, I mean, not surprisingly, that boosts their success rate because they don't have to go through the hurdle of getting authorization for the money. You know, I think that that also speaks to another aspect of that, which is the structural risk. So one of the things that is important to note about skills first, hiring and advancement is that you are already doing skills first, hiring and advancement. It's just often under the proxy of a degree. And so every single person is ultimately hired for the skills they have or the skills they don't. Sure. Right now our model for hiring has been set up in such a way that there isn't time for most people to take in the fullness of a person's skills and aptitudes. One piece of research said that on average a resume is viewed for about six seconds before a decision is made about them. That's not long enough to assess the full spectrum of someone's skills and competencies and aptitudes and gifts. So there are technologies that are being developed. AI is being harnessed in various ways. There are really interesting companies who are working at the applicant tracking system level or at the sort of like pre interview level to parse resumes and parse experiences into skill stacks that then can be translated so that it's sort of skills and skills looking at each other. And then that person has progressed to a conversation with a person not based on how their resume looks, not based on the keywords that they use that match the job description, not based on where they went to school or whether they went to a four year school, but instead based on this technology is saying that the way this person has represented their skill stack, whether that's through a learning and employment record, a digital wallet, a printed resume, and the way that the business has articulated the needs and skills for that job matches up at a high percentage rate and therefore they're worth talking to. The other sort of risk is personal risk and that one is a little bit harder. So I mentioned in the example about Ivy League candidates versus Skills first candidates. Right now there is a perception that sometimes if a candidacy fails, it's because of the candidate, and sometimes if the candidacy fails, it's because of the person who picked them to be a candidate. And so we have to get around that. We have to deal with that reality, which I think is something that will happen over time. But we've identified sort of two main things that we think are part of that. The first is that there are not a lot of great case studies out there yet of skills first hiring and advancement strategies demonstrating positive roi. And so we're working right now with the Business roundtable and the U.S. chamber of Commerce foundation to create a case studies compendium that would be a collection of diverse case studies from employers of different sizes, shapes, industries, geographies, so that an employer who's looking to implement a strategy, one can point to an example and say this mid sized healthcare company is doing this so our midsize healthcare company can do this, but then also can find inspiration on those incremental and measurable and manageable strategies so that they can do the one thing that's going to have a good impact for them. And then the other thing that we're doing is investing at the individual level. So we're working with Opportunity at Work as well as a coalition of other partners, including Jobs for the Future, Education Design Lab, the two other organizations I mentioned, Chamber of Commerce foundation and Business Roundtable, Grads of Life, cben, National Governors association, to create a credential for Skills First Hiring and Advancement for HR professionals, hiring managers and C suite decision makers. And that is not something that exists right now. And what that means is that there's no place that you can go and take a class and at the end of it get the imprimatur that you are a documented expert on Skills first hiring and advancement practice. And that puts you at a disadvantage in dialogues with your boss, with other decision makers. It puts you at a disadvantage with yourself in some cases because you doubt your expertise and your ability to know what you should do first, second and third. Third. And so that in conjunction with our Skills first center of Excellence, which is the collection of all of the resources that I described earlier, will ideally come online at the beginning of 2025 and is designed to set up employers to reduce that risk in various ways by organizing the resources, giving them access to more direct information more quickly, and creating that opportunity for them to be certified in the specific skills necessary to be a Skills First Hiring and Advancement professional.

Makes a lot of sense. You've actually answered a bunch of the other questions I had in that answer. Let me ask, let me ask this one because it strikes me as a bigger question mark, which is something I found in my research several times, which is employers, they don't actually seem to typically know what are the skills at the heart of successful employees. Like they might know the technical skills, but that's about it. And then when they're building job descriptions or whatnot, those are almost more legal documents to mitigate risk, right? In some ways. And they're throwing every possible skill, critical thinking, communication, right, they're just throwing them on there. But it doesn't really mean something deeply, nor do they understand how it relates to the job necessarily. And so I guess I'm curious in the lack of a measurement around that or a taxonomy around these things. How do we move to skills based hiring if the employers themselves don't necessarily understand what the skills should be or how to think about it.

Yeah, it's a really fair question and I think there are a couple sort of answers to that. The first is to acknowledge that right now people are using degrees as a proxy for much more than they're actually for. And they're doing that for everything that you just said, which is that they don't know how to write a job description that is accurate to the full spectrum of what someone's going to do because they have person's not there, they haven't done it yet. You know, the nature of work is that a good chunk of what you actually do in your day to day job is encapsulated by the words and other duties as assigned. And so everything else that's in the description before that has to do with the sort of core stuff they know you're going to do, or as you said, all the other stuff they're stacking up to make sure that, you know, that you might, you might be asked to do that eventually. And so when we're advocating for employers to think about a shift from degrees to skills, part of what we're asking them to think about is to think about what it takes to adequately and accurately describe what a person is going to do and what they're going to need to do in order to succeed at this work. Which is different and the same as what the job is like. Right. So it's not the course like hard skills of the job. In fact, in most cases when we talk to employers, they say they can train, I don't know, 80 to 100% of the hard skills into someone. What they're looking for is a specific alchemy of what we call durable skills, formerly known as soft skills, plus a desire, an aptitude, a positive attitude to do the work. We did a pilot in Arkansas and, and more than a handful of the employers said what they really want more than anything in the world is for an enthusiastic person to show up every day on time and sober and they will do the rest. And I think the proxy of a degree is an unfair way to start that conversation.

It's like a crazy bar to show that you can do those things.

Yeah, right, exactly. And so I think that, you know, looking at that question of what it takes to adequately and accurately describe a job, one takes some new skills. That's why we're developing the skills credential. That's why we're trying to organize the tools that are out there. Including there's like a, there's a Beautiful tool called the Skills Skills First Job Generator that is now, I think, a product of education Design Lab. It was developed first by the Markle Foundation. It's a free tool that you can use. You can pick a bunch of different job roles, you can articulate the kind of core things you think that person's going to do, and it will generate a template job description in Skills first language for you for that job. And then I think the other part that really is coming to bear right now is that there are emerging technologies that are leaning into the idea that people are not looking to completely transform the way that they work. They. They're looking for the tools and technologies that will allow them to work the way they always have, but get better outcomes when it comes to hiring and advancement. And so some of those tools I was mentioning that are using AI to pull skill stacks out of resumes and skill stacks out of job descriptions and match them together and then propose those candidates for conversation that then can be driven by additional questions articulated by that AI that are competency based and that get at some of the deeper things that a person is looking to do and how they're looking to do it, that can ideally allow a hiring manager to stay closer to their comfort space in terms of how they want to talk to people and how they want to suss out the next person who's going to be maybe their only hire of the year, while also opening that aperture so that more people are able to access that stage of the interview process.

Gotcha. That makes a lot of sense. That's helpful. Last question as we wrap up here, which is, you know, you come back here in some number of years, right. And a decade from now, see if you've met the goals in your mind. What are those big indicators that will show that we've actually reached this vision that you're sketching out to get to this tipping point of the milieu being skills first as opposed to degree first.

I mean, I think, as I said at the start, that the biggest indicator is going to be if everyone's doing it and if it's the thing that that's the default that everyone does. So that it is an exception if you're putting a degree in a job requirement, it's an exception if you're using question sets or ATS processes that lock people out if they don't have a degree. But then on top of that, I think it's actually going to have a lot of ripple effects that go beyond that initial hiring. I think we're going to see workplaces that are different, that have more fluidity between jobs. We're already seeing that here at shrm. SHRM has been going through a concerted process of simplifying the job descriptions so that they can hold the sort of fullness of a person in them. So I have on my team four different program managers and they have essentially identical job descriptions with one paragraph of differentiation based on the subject matter expertise that they need to have. But that allows for a broader spectrum of candidates to come in and be engaged with and know what the kind of core skill set is and then to be able to move fluidly between those pools over time. Because the nature of our work, just like the nature of everyone's work, is becoming increasingly intersectional, increasingly evolutionary at a very quick pace and increasingly tied to changes in the technologies and the ways of working and the needs of a sort of fast evolving population. So I think that if we hit our goal, we will of course have our hard metrics that we'll be able to point to. We'll be able to count the 100,000 employers, we'll be able to count the 500,000 individuals. Ideally, you know, we have models that say that, that if that were to happen and you know, at the rate that we think it would result in skills, first hires, so hires of people who don't have those four year degrees into historically four year degree positions, the data says that that's something like $26,000 a year on average in extra income for those individuals. $900,000 a year in a lifetime on average. For someone who moves from a sort of non degreed track to a degree track, you know, and I think a lot of that would fluctuate. We are certain that there would be sort of variations in salary and things like that, but we certainly would see the economic flow out into populations that have historically had their wages depressed simply for the fact that they weren't able to or weren't inclined to get a degree. And given that the percentage of people who are going to get a two year or four year degree is going to continue to decline, it's declined 10% in the last five years. It's on a continued decline trajectory. Eventually it'll course correct to some degree. And we're already seeing that a little in the four year space. But it's never going to be that we're moving back up to a 50, 50 split, let alone anything that sort of is more than that. I think we're going to have to change or eventually we're going to run out of the workers that are going to qualify for the job descriptions we're writing. And we're going to be in a situation of significant crisis. We're already seeing that in certain professions. In healthcare, for example, in certain of the trades, for example. In certain spaces where they've started, they went through a process of professionalizing the role and adding more degree requirements. But there aren't enough people who have gone and gotten those degrees. And those are the spaces where they are hungriest for the innovation and the movement to skills first. And we're seeing some amazing movement there. I hope that we don't have to wait until every industry is in crisis. Our goal is to try and be proactive about this so that the world of work can move in advance of what we see coming, as opposed to move once the crisis is here. But for certain parts of the world of work, it's already in crisis and they are already reacting. And we can see glimmers of what it will look like in a post or in a movement to a skills first world from those spaces. For sure.

Well, when the alternative is, I guess, no human talent at all, all of a sudden they realize, hey, there's a lot of human talent and capital sitting on the sidelines. Let's unleash that talent. So, Clay, thank you so much for the work that you are doing to help move companies, employers in these directions and for unleashing a lot of potential and a lot of humans who would have otherwise been on the sidelines.

Well, thank you for having me here today. This has been a great conversation.

Yeah, you bet. And for all of you tuning in, stay tuned for the future of education as we keep abreast of all of these exciting updates in the world of work world of development for all individuals.