Potential Over Credentials: A Call To Action For HR Departments

Apprenticeship is the new pipeline

With technology startups announcing layoffs and hiring freezes, now might seem like odd timing to discuss the shortage of digital talent. I beg to differ. As HR professionals know, finding and retaining tech workers in the United States will be difficult whether we go into an economic contraction or not. The main pipelines for tech talent—universities, immigration, and to some extent, coding camps—do not even come close to meeting domestic demand.

Unless our country develops more pipelines for digital talent, there will be consequences. The organizational consulting firm Korn Ferry estimates that the global technology sector will suffer $449.7 billion in unrealized output by 2030 due to a shortage of 4.3 million workers. The U.S. alone will account for $162.2 billion—36% of that total—if business continues as usual. 

An overhaul of our university system and immigration policies seems extremely unlikely. That is why I believe apprenticeship programs are coming to your HR department. The emerging roles and skills needed in this country, changing cultural attitudes towards college, and the scale of untapped potential make it almost inevitable. Employers are ready to put potential over credentials. 

The Eight-Year Window

Part of the problem for digital employers—and the solution—is that too many Americans are stuck in jobs without a future. According to consulting firm McKinsey, which analyzed 800 professions in eight major economies, 1 in 10 Americans will need to change jobs by 2030 because their role will no longer exist. About half will need more advanced skills to make this transition. 

The World Economic Forum (WEF) Future of Jobs 2020 report argues that the most in-demand emerging roles in America are digital. The WEF identified AI and machine learning specialists, data analysts and scientists, and big data specialists as the three most in-demand jobs. Data entry clerks, accounting/booking/payroll clerks, and secretaries were seen as the most “redundant.” 

The top three “emerging skills” are quite broad: analytical thinking and innovation, active learning and learning strategies, and complex problem-solving. These strike me as skills that do not cater to university instruction. 

Learning “innovation” in a classroom would be like reading a cookbook but never preparing any meals. To learn how to cook, you must cook. Likewise, to learn innovation, you must innovate something. The same applies to complex problem-solving. Although college courses can contrive scenarios in which students innovate or solve complex problems, simulations will not compare favorably to the on-job experience. Plus, why pay a college $10,000 or more per year to practice something that employers would pay you to do? Employers are beginning to ask that same question.  

Discounting College

Whether university training is relevant to a job or not, most tech roles still require at least a bachelor’s degree. Perhaps not for long. Research from the nonprofit Burning Glass Institute suggests that employers require more credentials when they have leverage in the job market (e.g., just after the Great Recession) but drop requirements when they are short on talent.  

For example, as talent demand intensified leading up to Covid-19, “skill-based hiring” gained momentum. According to Burning Glass, “Some 46% of middle-skill and 31% of high-skill occupations experienced material degree resets between 2017 and 2019.” The researchers call this a “structural reset,” meaning that it is likely permanent. Differently, they believe Covid-19 caused a “cyclical reset” that temporarily lowered requirements for certain roles (notably in healthcare).

The WEF Future of Jobs report is describing structural changes in employment from roles that require manual work and repetition to jobs that favor human guidance of automated systems. That change poses a long-term reset in requirements and at a scale perhaps not seen since the first Industrial Revolution.

Accenture and IBM seem to be ahead of the curve in recognizing this structural reset. According to Burning Glass’s analysis, Accenture requires a degree for only 26% of its quality assurance (QA) engineering roles, and IBM for just 29%. By comparison, 84% of QA roles at Google require a degree, as do 90% at Apple, 94% at Intel, and 100% at Oracle. Even Facebook, founded by a college dropout, demands a degree for most IT roles.

Degree requirements are supposed to select top candidates, but in practice, they exclude more than 81 million workers without bachelor’s degrees, or about 56% of the civilian workforce over the age of 25. Black, Hispanic, and Native American workers are overrepresented among non-degree holders, posing a diversity and inclusion issue on top of a limiting talent strategy.  

Apprenticeships Are the New Pipeline

In my prior role as CEO and co-founder of Phone2Action (now Capitol Canary), a digital advocacy platform, I ran apprenticeship programs for over eight years and found them essential to our talent strategy. Rather than compete with Silicon Valley for the same degree holders, visa applicants, and coding camp graduates, we developed our own talent pool. Well-known tech companies, including Google, Accenture, Pinterest, ServiceNow, and Uber have done the same with “registered” apprenticeships.

Different from an internship in which companies can do whatever they want, apprenticeships registered with the Department of Labor (DOL) have to meet standards for on-the-job training, classroom instruction, and wages. That way, after the apprenticeship period, the apprentice is equipped to work professionally in the field.

In 2020, there were over 275,000 apprentices in programs registered with the DOL, but just 2,951 of them worked in “Information,” a broad category that includes information technology, media, and more. Meanwhile, 188,452 apprenticed in skilled trades related to construction (good news for the housing shortage). The same characteristics that make a construction apprenticeship so effective—hands-on learning under the supervision of a professional—suit digital roles.

The barrier for tech companies, I believe, is designing and administering these apprenticeship programs. Whereas the construction trades have always depended on apprenticeships, the tech industry does not have this tradition. The process of turning someone into a skilled digital worker is not well understood within corporations and is even less understood in higher education.

Thus, DOL-approved intermediaries are increasingly behind these tech apprenticeships, redesigning what preparation for a technology career looks like in this century. The effort to develop a winning formula for tech apprenticeships is likely to have beneficial ripple effects. Perhaps it will lead to a healthier distinction between education and career preparation, which are too often conflated.     

Director of Apprenticeships

There is room for a massive expansion of technology apprenticeships. Given the talent shortage in tech, the discounting of college, and the need for more talent pipelines, apprenticeship programs are probably coming to your HR department.

Soon enough, we will see HR departments hiring a Director of Apprenticeships. Competing on the open market for tech talent will be seen as inefficient. Perhaps the tech companies that move early on apprenticeships will not become a Korn Ferry statistic about unrealized output.

Amidst economic uncertainty, apprenticeships tap a new talent pool that is eager to learn. Whether an employer’s aim is to reduce recruiting costs, increase diversity and inclusion, or simply find the talent they need to exist, the outcome is that millions of Americans may have an opportunity to advance out of stagnant work and join the digital economy. This is the time to value potential over credentials.

Ximena Hartsock is Co-Founder of BuildWithin. Connect Ximena Hartsock