If you ask a graduating M.B.A. student, a prep school guidance counselor or the internet how to be hired at the global consulting firm McKinsey, you’re likely to find a list of prestigious “target schools” where it has consistently aimed its recruiting efforts. You know the ones — Harvard, Yale, Stanford.
But these days, McKinsey would prefer a different answer. “Exceptional can come from anywhere,” its career website says. And then, in case that wasn’t clear enough, “We hire people, not degrees,” and also, “We believe in your potential, regardless of your pedigree.”
Katy George, Mckinsey’s chief people officer, told Fortune last year that the firm had increased the number of schools that its new hires came from to 1,500 from about 700, part of its process of “pivoting from pedigree to potential.”
Many companies are working toward a similar makeover.
“Elite” has never sat well with many American institutions, but the word has taken a particular beating in recent years. On the 2016 campaign trail, Donald J. Trump used the label practically as an insult; the Black Lives Matter movement drew attention to racial disparities along the path to people becoming rich and powerful; and debates over free speech and safe spaces on college campuses transformed into hot-button issues, leading to opinion essays with headlines like “Elite Universities Are Out of Touch” and “Why I Stopped Hiring Ivy League Graduates.”
The legitimacy of traditional markers of brilliance, like an Ivy League diploma, are being questioned. And so, companies have had to come up with other ways to convey to recruits, investors and customers that they’re not just ticking boxes that may be outdated — their talent is truly the most talented. Broadening the recruiting net fits the bill, but may come with some of the same shortcomings as previous strategies.
One way companies have tried to highlight the fairness of their recruiting practices took off in the wake of the murder of George Floyd in 2020, when they doubled down on emphasizing a commitment to “diversity, equity and inclusion.” Companies hired D.E.I. officers in droves and published accountability reports.
That approach has since become a political minefield and, in some cases, a legal liability. Today, executives are talking less about diversity (even as some surveys suggest they remain committed to efforts for increasing it). Some have started emphasizing “inclusion” or “belonging.” But many were already pivoting to something broader.
“Skills-based hiring,” “skills-first hiring” and efforts to break the “paper ceiling” — the bias against those without college degrees — are all rising buzz phrases. (“It’s kind of our contribution to the ‘paper ceiling’ movement,” Ms. George told Fortune of McKinsey’s expanded recruiting lens.)
The idea, as the consulting firm BCG described it, is putting “competence over credentials,” meaning that companies should stop looking for the right degree and instead focus on who has the right skills, regardless of how they acquired them.
The pitch is basically meritocracy. And it’s everywhere. McKinsey has developed a video game to assess candidates’ cognitive skills, which it says gives it “insight beyond the résumé or conventional interview.” And it has published an interview prep website that a spokesperson said was necessary “so exceptional candidates from any source can succeed in our interviews, regardless of whether they have access to resources like a consulting club, active career services support, or an alumni network that’s well-connected within the consulting industry.” Bank of America has partnerships with 34 community colleges, and says it has hired and trained thousands of employees from these schools. Goldman Sachs switched to doing interviews for entry-level jobs virtually instead of only at a few top-level schools. “We now encounter talent from places we previously didn’t get to,” its global head of human capital wrote in 2019.
A handful of companies, including Walmart last year, said they were removing degree requirements for corporate jobs altogether, and more than a dozen states announced they would stop requiring degrees for some government jobs. In 2020, a coalition of big companies including Accenture, JPMorgan Chase and Deloitte set out to put more Black workers into well-paying jobs. The group recently shifted its mission to promoting “hiring for skills, not just degrees.”
Economists generally agree that eschewing unnecessary degree requirements (or prestigious degree requirements, in McKinsey’s case) is a good idea — particularly in an era of degree inflation and a tight labor market. Reducing reliance on credentials is also more likely to increase diversity, even when it’s not a stated objective.
It also happens to be easier to state as an objective. “I think it’s hard to be opposed to it, frankly,” said Anthony Carnevale, who recently retired as the founding director of the Georgetown University Center on Education and the Workforce, and worked on employment policy under three White House administrations.
“Somebody who is most skilled for the job and deserves the job, they ought to get the job,” he said. “I don’t know how you argue with that.”
Not surprisingly, making the promise is simpler than delivering it.
Some companies have made real progress, like Accenture, which is considered a pioneer of the strategy and has said nearly 50 percent of its jobs in North America no longer require a college degree. But a Harvard Study that looked at job postings at large firms from 2014 to 2023 found that although there was a huge uptick in roles that dropped degree requirements, not much had changed in actual hiring practices.
In the period after companies removed degree requirements from some jobs, about 3.5 percent of those jobs were filled by candidates without a degree. That means fewer than 1 in 700 workers hired last year benefited from the shift in policy.
Joseph Fuller, a professor at Harvard Business School and a co-author of the study, said the lack of follow-through was not because companies were “virtue washing,” but because “there’s a big difference between announcing a policy change and having that kind of reify to the company.”
He said that, to a frontline manager, choosing the candidate with a college degree could feel like “when you’re indifferent between two main dishes at a Chinese restaurant and one comes with free egg rolls.”
Mr. Carnevale of Georgetown University pointed to another challenge: It’s difficult to articulate exactly what qualities someone needs to do a particular job well, let alone how to assess those qualities without being sued. “Imagine trying to figure all that out, with lawyers in the room, what the actual knowledge, skills, abilities, personality traits, work values, work interests are — it’s dicey business,” he said.
Just like screening for credentials, evaluating a candidate based on experience can be prone to bias, said Anthony Abraham Jack, an associate professor at Boston University and the author of the upcoming book “The Privileged Poor: How Elite Colleges Are Failing Disadvantaged Students.” For example, he said, “traditional markers of evaluation ignore especially the work that lower-income students do on behalf of their families.”
In other words, skills-based hiring may not be so different from other corporate efforts that have struggled to bring hiring practices closer to meritocracy. “It’s not like a quick fix; most things that actually work tend to sort of fit that bill,” said Joelle Emerson, the chief executive of the D.E.I. consultancy Paradigm. “Things that sound too good to be true — like, oh, we’re just going to do skills-based hiring — they usually are too good to be true.”
Source Agencies
