Should Your Company Require College Degrees When Hiring?

There has been talk about how the global economy has become too obsessed with college for years now. Students enter college, spend four years learning about something with little workplace value, and graduate with mountains of debt and a degree not worth the paper it is printed on.

And now one major British company has decided to really make that degree even less valuable. As the Huffington Post has reported, British accounting firm Ernst & Young has announced it will be removing the degree classification from its entry criteria. The company declared that there is “no evidence” success at university correlates with achievement in later life.

Should other companies follow the example of Ernst & Young, and has the college degree truly become something useless? The answer, like so many things, is “it depends.”

Testing as an Alternative?

There are two important things which should be noted about Ernst & Young’s decision. The first thing is that the company has announced that testing will play a larger role in choosing applicants.

While American companies are allowed to use testing, they have been loath to do so since Griggs v. Duke Power Co. This Supreme Court case in 1971 found a company’s test for promotions to be racially discriminatory and struck it down. Since then, companies have turned to educational credentials to evaluate job applicants.

Companies do have good reason to be leery of tests. Either a job opening will get only a few applicants, in which case it may not be worth the cost and time to buy, score, and run tests. Or it will have many applicants, in which case rejected applicants may claim discrimination.

But there are advantages to testing. While there may be upfront costs in running tests, it can save money over the long run by screening out unqualified candidates. A medium-sized or large business which is careful can use tests as a valuable supporting tool in employment screening.

The Days of High Grades Are Over

The second important thing is that Ernst & Young is not saying that anyone who has never entered college can just walk up and ask for a job. What Ernst & Young is dropping is a requirement of requiring a 2:1–the equivalent of an “A” in American education–in its degrees.

In short, Ernst & Young is not so much targeting college degrees as they are targeting high grades. This is nothing new, as businesses today rarely ask applicants what their GPA was in college.

And while it may go against centuries of tradition in valuing high grades, such an approach makes sense–as long as the student was productive outside the classroom. Ernst & Young, like many other businesses, believes that a student with average grades that has worked with a small accounting firm is better than a student with excellent grades that has not. And this also applies to elite schools, as studies have shown, that businesses are not that interested if a student has entered an Ivy League school anymore.

This is true of every single degree, even the more valuable science and engineering degrees. Experience matters more than getting a 2:1 or a 4.0 grade point average.

The Upside of College

But if companies no longer care about the grades of college students, then what value is college? Why not hire some random person off the street?

Some professions may be better suited to do that, but students with a college degree do have advantages. They have shown the self-discipline needed to get through college, and colleges will normally give their students opportunities to gain experience that non-college students do not have access to.

For all the fretting about the value of a college degree, it is college-educated workers who have benefited the most from the modern economy. The real wages of high-school educated workers have declined over the past few years, but college individuals have been growing in demand as businesses snap them up.

College Has Some Value Still–But Only Some

So, what is the final verdict?

Businesses as a whole care too much about the value of a college degree, and there are many talented individuals who simply lack the family background to make it into college. And Ernst & Young’s decision to not worry about grades is correct, as experience is what truly matters for getting a successful worker.

But college-educated individuals normally have valuable skills which their non-educated peers do not have, which means that a college education does possess value.

A business which lacks the resources to heavily screen its workers may be fine using college as a low bar to find capable workers. But a business which has the time and resources should choose to look for alternative, more detailed means like testing to find the best and brightest workers.

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