Over four out of every ten employers are hiring academically overqualified workers – and they’re happy they did.
A recent survey from Career Builder found that 41 percent of employers are hiring workers with college degrees for positions that don’t require them, and had in the past been filled with workers who have only a high school education. That’s up from 37 percent in the 2016 survey.
While the study’s authors found that most employers who did so believed that they had to because of the tightening labor market, 38 percent of employers surveyed reported that they had actually increased their academic requirements and listed qualifications when it came to hiring.
Furthermore, 33 percent of employers are hiring more workers with masters degrees for jobs that had previously been held by those with a bachelor’s degree – again, that’s an increase compared to the 33 percent of employers who reported the same measures last year.
Why the increase? Workers need more skills now, report most employers: 61 percent of companies responding said that the skills required for those positions have evolved.
While traditionally employers have been hesitant to hire academically overqualified workers because of concerns about job retention, employers report seeing a number of real benefits from the trend as more educated workers bring more to the table than their peers with only high school educations. Among the benefits reported by employers:
- 61 percent report higher quality of work from the more educated workers.
- 51 percent report higher productivity.
- 45 percent report better communication skills.
- 41 percent report more innovation and idea generation from college educated workers.
- 33 percent report better employee retention.
- 26 percent report improved revenue
- 24 percent see improved customer loyalty.
According to Careerbuilder, respondents attribute each of these benefits specifically to the hire educated workers in their work force.
In our view, it also means that even as bachelors’ level job seekers are losing labor market share to more and more graduate-level degree holders, they themselves are taking market share from high school diploma and GED-educated workers. Workers who don’t a four year degree are getting squeezed out.
It’s going to get worse: HHGregg is closing 88 unprofitable stores, laying off at least 1,500 workers. Target is reporting revenues lower than fiscal 2011 levels – even as it reported a 34 percent increase in online sales. JCPenney just announced plans to shut down 130 to 140 stores. Each of these decisions to shut down scores of locations at big box retailers means thousands of cashier, stock handler, loss prevention and janitorial jobs that have been go-to sources of income for high school educated workers will vanish.
Meanwhile, new technology may soon make truck drivers obsolete – threatening up to 1.7 million traditional blue collar jobs that have been a ticket for high school educated workers to reach the middle class for generations.
Smart, young working class people are seeing the writing on the wall, and have been making tremendous sacrifices to attend college to escape the structural economic changes that are weighing on high-school educated and traditional blue collar workers. Many have borrowed heavily to attend college, amassing more than $30,000, on average, per graduate.
To attract these upwardly mobile workers, many employers are now offering student loan repayment assistance as an employee benefit, including Fidelity, Pricewaterhouse Coopers, Aetna, Penguin Random House, Nataxis, Nvidia, First Republic Bank, Chegg, Powertex Group and Staples.
The benefit makes sense as many younger workers, struggling with student loan payments, have not been responsive to other employee benefits, such as generous 401(k) matches and expansive cafeteria plan benefits and health insurance (unless the employer pays most of the cost). The reason: They can’t contribute. A big 401(k) match with great funds and low plan expenses does no good for a millennial worker with little or no disposable income who cannot hope to make major contributions to the plan anytime soon.
Allocating similar resources to the student loan repayment benefit that companies promise to older workers via their match program makes sense to attract and retain top millennial talent, employers report.