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Ernst & Young Doesn’t Require Degrees — Why Do You?

Earlier this year, Ernst and Young, one of the biggest professional services firms in the world, dropped a bombshell that they would no longer be requiring college degrees for candidates applying to join their teams. In a statement, EY announced:

[We] found no evidence to conclude that previous success in higher education correlated with future success in subsequent professional qualifications undertaken.

And while EY did not say that they wouldn’t be considering the degree at all for candidates, they did say that it will no longer be taken into account for getting one’s foot through the door. Still a bombshell, considering that most people admit that while their degree was not particularly useful in adding human capital, it was helpful for them to get their foot through the door.

Instead, EY will be turning to more accurate measurements of future success, like skills tests, aptitude tests, and looking at what a candidate has actually accomplished in the past (versus through which hoops a degree says they jumped).

This is surprising because Ernst & Young isn’t exactly the shining beacon of “drop-out-of-college-and-go-found-a-startup” sexiness that has taken the world by storm in the past few years. It’s exactly the kind of company that Peter Thiel describes in Zero to One as not really creating anything new, and instead “shuffling around existing resources” through its work.

If one of the world’s largest, most established, and stodgiest companies realizes that making a blunt degree requirement shuts you off to the very best talent and that there are better mechanisms for finding top talent out there in the 21st century, then you have to sit back and ask yourself the same question EY did:

WHY ARE YOU REQUIRING A DEGREE?

Most people doing hiring aren’t exactly sure why they require a degree, just that they do. They sit back, imagine their ideal candidate, draw up a list of experiences and skills, and just tack the degree on to the end as an afterthought. The ideal candidate probably has a degree, but it isn’t the degree that makes the person the ideal candidate.

This means that the ideal candidate might be out there without the degree — but if we just took a pool of young people and looked at those with and those without degrees, our candidate is more likely to be in the former pool. In an age when work can be verified with a simple Google search and when skills can be verified with an online quiz, this is a suboptimal recruiting tactic.

This is an odd realization to have, but the curious history of the degree as a signal of success and of aptitude gives us an idea of why it is that we got ourselves here.

THE CURIOUS HISTORY OF DEGREES

The undergraduate degree requirement was once an intuitive filter for finding good talent, but more and more hiring managers and entrepreneurs are realizing this isn’t the case. At one time, a university was one of the only places you could go to receive any kind of education outside of K-12 — and, unless you were a master autodidact, one of the few hopes for continuing education. For companies, this meant that going to the universities would yield them the best young people to come work for them.

An attempt to set candidates apart by IQ ends in a trip to the US Supreme Court with Griggs v. Duke Power Co., making it that employers have to rely on universities to filter candidates out by relative intelligence. This SCOTUS ruling is one of the biggest boons to the success of the university cartel in the 20th century.

A popular sight in high school guidance offices.

As young people realized that the degree was the ticket to a steady middle class job, more went to college. More colleges opened their doors to even more students, for-profit colleges popped up to get on the bandwagon, and the government subsidized these schools by the dozens through the GI bill, grants, student loans, and more.

At this point, companies are pretty much forced to require degrees (remember, this is in the pre-Internet era still), lest the HR manager have to rifle through hundreds of applications for one post. After all, if everybody who is slightly below-average and better has a degree, then you might as well as filter those who don’t, right?

As more people came out of colleges, the relative power of the undergraduate degree got weaker. Employers now must rifle through just as many applications as before the degree requirement became standard, but now having a BA doesn’t really signal anything much to them. It tells them, “oh, you can sit in a classroom and do what you are told for four years and pay your life savings for it!”

The mass popularization of the degree — led by individuals hoping to set themselves apart from the pack — ultimately makes all those who are trying to set themselves apart look the same. It weakens the hiring power of employers and it weakens relative prospects of the youth (who could have spent the time and money wasted on the degree on ventures more likely to really set themselves apart).

Even worse for the power of the degree, more high-achieving young people are passing on it today than ever before. As the Internet lowers costs for launching projects, joining fellowships, cofounding companies, and learning without the classroom, employers requiring degrees are just shutting themselves off to the very best talent.

Not long ago dropping out of school to start a company was considered risky. For this generation, it is a badge of honor, evidence of ambition and focus.

Wall Street Journal, June 5, 2015

Employers are now forced to make a decision: either require more credentials from entry level candidates to set themselves apart (I saw an unpaid internship in Long Island this summer that required a Master’s degree!), or to use a better signal — what you know and what you’ve done. The latter is what Ernst & Young did — why haven’t you?

THE NEW BETTER SIGNAL

The revolution in higher education is happening all around us and nobody notices. It isn’t driven by MOOCs or by more online courses or apps. It’s not driven by MIT or Yale making their courses open and available to all. It’s driven by tools like Google, LinkedIn, WordPress, Github, and the Internet as a wholeFor the first time in history, any candidate can build a better signal

Nina Mufleh’s web portfolio targeted at Airbnb is a great example of a better signal

Employers now have a much less costly way to verify whether or not a candidate has done what they say they have done and knows what they say they know. A quick Google search can find projects the candidate developed, stories they wrote, and features about them. A well-catered LinkedIn profile works as more than just a resume — it’s a professional portfolio that signals so much more competence than “B.A., Class of 2011” on an application does. Personal sites and blogs allow candidates to treat themselves as brands and can show off both the knowledge and the experience of a candidate with ease.

Aptitude tests can now be administered remotely through the Internet, lowering the costs for employers to test candidates on what they claim to know. The skills and knowledge necessary to ace these exams no longer sits only in the dusty libraries of universities, but at the fingertips of every person with a smartphone.

“How can this be implemented in hiring practices? A BA requirement is an easy tweak in an online application, do you really expect every hiring manager to Google every candidate?”

Absolutely not. But just as a BA requirement is an easy tweak in an application, adding a just-as-significant area for a portfolio, LinkedIn, or personal site is also easy. Removing the BA requirement so candidates can get past the filter and show off their better signals is the best step that companies can take to open themselves up to the best young talent out there. These are the young people who are focused and driven to create the best experiences for themselves possible, not just wait passively for them to arrive.

You have nothing to lose and everything to gain by considering these young people building a better signal.

Zachary Slayback writes regularly at zakslayback.com. Follow him on LinkedIn to get more posts like this one. If you liked it, please click “Like” so others can find it!

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Written by Zachary Slayback

@discoverPraxis founding team member and Business Development Director. Opinions are my own.

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