Why companies like Walmart are ditching college degree requirements

State of play: Walmart, the largest private employer in the U.S., recently said it would no longer require a 4-year degree for an unspecified number of corporate positions.

• The company said it's rewriting job descriptions so that applicants "can have a related college degree or possess the skills needed for the job, whether through previous experience or other forms of learning."
• "We're removing obstacles to opportunity," Walmart senior VP for associate learning and leadership Lorraine Stomski tells Axios.
• And it's not just Walmart.

By the numbers: About 78.4% of job postings in "college-level occupations" in 2023 specifically called for a degree, down from 82.5% in 2017 and 85% in 2010, according to labor analytics firm Lightcast.

• Jobs like insurance sales agent, e-commerce analyst, property appraiser and call center manager are among the positions that increasingly do not require a degree.
• "Because we still have these labor shortages ongoing, a way for employers to get more people in the door and get more people to at least apply for these positions is to drop the degree requirements," Lightcast senior economist Rucha Vankudre tells Axios.

Between the lines: Advocates for a switch to skills-based hiring say it's better for the workforce and for hirers.

• It especially fosters upward mobility for internal candidates who have the applicable skills and experience to get promoted but lack the educational credentials, says Elyse Rosenblum, founder of Grads of Life, a group that promotes skills-based hiring.
• When strictly requiring college degrees, "you're dramatically narrowing your talent pool," Rosenblum tells Axios. "Companies have a tremendous opportunity to hire from within."
• She said numerous positions in IT, financial services and health care are particularly ripe for skills-based hiring.

The other side: Deemphasizing college will undermine the nation's competitiveness on a global scale, says James Keyes, former CEO of Blockbuster and 7-Eleven.

• "College is about learning to learn – you don't want that person to come into the workforce and be unable to learn," says Keyes, who advocates for college in his forthcoming book Education is Freedom.

The big question: How will workers get relevant skills if they can't get a job in the first place?

• At Walmart, the company is helping its workers earn short-form certificates through a public benefit corporation called Guild.
• The company has identified this route as a good way to train and hire cybersecurity analysts, for example, Stomski says.
• Walmart also does not require college degrees for its store managers, who have an average salary and bonus compensation of $230,000, or for the next level down in management at an average of $113,000, Stomski says.

Yes, but: Keyes argues that internal training programs often don't help employees when they look for a job elsewhere.

• He noted that the difference in earning power between college grads and non-college grads remains "dramatic."
• Recent college grads earn 52% more than peers with only a high school degree, according to the Federal Reserve Bank of New York.

💭 Our thought bubble: In a capitalistic system, employers have no incentive to stick to their traditional hiring practices if they identify a better route.

• That means this trend is a serious threat to colleges and universities, which must prove their relevance to prospective enrollees who have real-world job opportunities and fear taking on student debt.

Go deeper: AI threatens to dethrone the 4-year college degree