No degree? No problem as tight labor market changes the game

August 7, 2016 | USA Today

Less educated workers are suddenly hot commodities.

San Diego-based Get It Done House Buyers, which buys homes to sell at a profit, began hiring salespeople without a Bachelor's degree eight months ago because of the tight labor market, says CEO Todd Toback. Turns out they’re his best performers. “They’re really, really hungry,” Toback says.

Now, instead of reviewing resumes, he says, “We see how people act during interviews.”

One of those salesmen, Raymond Sylverne, 28, formerly a full-time Marine, says he was aware of employers' bias toward college grads but, “I had confidence. If I had a college degree but couldn’t convert (sales, I’d) be useless.”

The 4.9% jobless rate has left employers a shrinking pool of available workers, forcing many to hire candidates with only high school diplomas or less for jobs that previously required four-year degrees. Many recruiters are pleased with the results, prompting them to modify how they evaluate applicants.The shift is a boon for workers who have struggled on the outer edges of a labor market that has long deemed a college degree a requirement.

In July, the unemployment rate for high school dropouts plunged to 6.3% from 7.5% the previous month, and was down from 8.2% a year ago. The jobless rate for high school graduates has fallen half a percentage point the past year to 5%. But the rate for Americans with a Bachelor’s degree or higher has been stagnant at 2.5%.

The jobless rate can sometimes paint a deceptive picture because of movements into and out of the labor force. But the share of the over-25 population of high school dropouts that’s employed is up nearly 1.5 percentage points the past year to 44%. The equivalent measure for college graduates is down to 72.1% from 72.6%.

Candidates armed with a Bachelor’s still enjoy a far lower unemployment rate and higher wages. But as the labor market tightens, "there’s less of an advantage for people with a college degree,” says Dean Baker, co-director of the Center for Economic and Policy Research.

That's partly because many new jobs are in restaurants, hotels and health care — industries that don’t require a college education, says Dean Maki, chief economist of Point72 Asset Management.

But high school graduates and dropouts are also snaring positions that had been going to the better educated, Maki says. During and after the recession, restaurants brought on college grads for jobs such as servers that didn’t require a four-year degree because they had their pick from a swollen pool of laid-off Americans.

Similarly, hotels that snagged college grads for low-level manager jobs during the downturn are taking on less educated applicants and training them, says Amy Glaser, senior vice president at Adecco Staffing. They've discovered the workers are less likely to leave because of the investment in their development and their skills are more suited to jobs for which some college grads felt overqualified.

Openings that traditionally have gone to college graduates, such as in sales, are being filled by less educated applicants, Glaser says. Tech companies, meanwhile, are finding programmers among high school graduates who have some coding experience and raw talent. With employers placing more emphasis on skills than educational background, staffing giant Manpower revived its MyPath program in May to train applicants’ for its clients’ open positions, says Senior Vice President Kip Wright.

Companies are also relying more on aptitude tests, says Jeanne Branthover, a partner in executive recruiting firm DHR International.

"It’s no longer, ‘Tell me what you did in school,' " she says. "Now it’s. ‘I want to know how you think.’”