Why Entry-Level Job Requirements Feel Absurd

Imagine looking for a new job. After scrolling through numerous job postings, you finally find one that seems like a perfect fit. That is until you see the required years of experience, necessary certifications, and a number of skills you must master. In 2023, 42% of employees felt they were excluded from job opportunities due to a lack of formal qualifications or experience. Lack of adequate experience, skills, credentials, or education ranked second among the biggest barriers for job seekers in 2022. Today's job market is definitely more difficult than the job market we have seen in recent years. Many job seekers don't know what they are qualified for and

feel

like they are not qualified for even jobs that, on paper, seem like a good fit.

Meanwhile, companies say they are prioritizing skills. There has been a shift toward skills-based hiring in recent years, and employers are much more concerned about employees' experience and skills than even their degrees. 46% of companies plan to increase their hiring in the first half of 2024, because their current employees lack the necessary skills. 79% of hiring manager workers said skills, experience, and past achievements are more valuable than credentials and education. I think we're now seeing companies working together and trying to identify what skills are really necessary to do the jobs they're hiring for today, and to be able to predict the jobs they'll be hiring for in the future. months and years.

So why are job

requirements

becoming more demanding, and what implications does this have for both job seekers and the economy as a whole? The U.S. labor market has cooled in recent months because overall economic activity has cooled. We had a big bout of inflation and the Federal Reserve raised interest rates to slow the economy and allow supply to recover. As a result, the labor market has also slowed. Hiring rates in the US fell to 3.5% in March 2024, after highs reached during and after the pandemic. Total job openings decreased more than 15% at the end of 2023 compared to the previous year.

In 2022, there was one job opening for every active applicant on LinkedIn. The following year, that ratio increased to one position for every two active applicants. When there are more candidates in the market looking for work and fewer jobs available, the job market becomes more competitive for job seekers. But for employers, that means they can choose whatever talent they want. If a job says it requires no experience, but 100 people apply and many of them have experience, well, of course the employer will hire the person with the most experience. We are also in a high interest rate environment where companies have less access to capital and are therefore less prepared to take risk.

They only hire when necessary for safe bet jobs and are no longer so experimental. There is another reason why. And it's about the hiring process itself, which has changed. Employers increasingly got rid of recruiters. 2023 saw a sharp decline in online job postings for job recruiters and several prominent companies such as Google, Apple, and Amazon laid off a significant number of recruiters and human resources employees. Recruiters were the type of professionals who understood the job market, understood the jobs, and went to their line managers and said, "Hey, this job doesn't require five years of experience." With those people out, there's no real pushback on hiring

requirements

that line managers who aren't really experts at this stuff, could ask their team, what do you think they need to do this job and say, well, it'll be ?

It's good to have a master's degree. Well, someone with five years of experience would be great too. And then the requirements get inflated and then they can't find anyone to fill the position. And they say, oh, there's a skills gap. There is a problem in the workforce. And salaries don't go up either, right? So you are trying to fill the same job with the same salary. But now more training, more experience, more years of education are needed. Guess what? Hard to do. As companies become more selective, 54% of recruiters said quality of hire will be their top priority between 2024 and 2029. 83% of hiring managers said they are hiring talent with specialized skills, while hiring fewer new employees than a year ago. .

What we're seeing on LinkedIn is that for employers, skills are becoming a priority. 73% of recruiters say that is a priority when trying to find candidates. They want to know what skills they have, what they can really do. What employers want is evidence that you can actually do the job. The other thing is that they want someone who has done exactly that job before and not something that is close enough. Hiring for

entry

-

level

and less specialized positions fell from 79% in 2022 to just 61%. Typically, when the job market slows,

entry

-

level

workers are affected a little more than workers overall.

We have almost no real entry-level jobs. Every employer wants to hire someone who has already worked somewhere else. Entry-level jobs only accounted for 2.5% of all jobs posted on ZipRecruiter as of the end of April 2024, and only 1.9% of all jobs available today say they require no experience. More than a third of employers refrain from hiring recent college graduates from Generation Z in favor of older employees, and more than half say recent college graduates are not prepared for the workforce. One survey also found that more than half of Americans who graduated from a two- or four-year college did not apply for an entry-level position because they felt unqualified.

Many entry-level job seekers find themselves at a dead end. To get experience, you would need a job, but to get that first job, you need experience, and that is a very challenging position to find yourself in. 57% of overall job seekers between 2020 and 2022 also said that a lack of skills or training prevented them from applying for the job they wanted. 84% of unemployed workers said they are interested in more opportunities to learn more skills. The United States does not have a strong system that allows us to support the kind of upskilling and training that workers need throughout their careers to advance.

The federal government spends very little and has little control over education and also training. There are some pretty big training programs that the federal government pays for, but that's not really where the action is focused. They are state and local governments. And those have been squeezed. And in many states they are repressing everything. You know, we spend less and less. OECD countries, on average, spent 0.11% of their GDP on training their workers in 2021. By comparison, the United States spent just 0.03% of its GDP on job training. One reason we may not see as much on-the-job training in the U.S. as we do in other countries is that we rely on the private sector to do much of our training.

Employers have largely abandoned training, especially compared to 30 or 40 years ago. They are not developing talent internally. They are looking outward to hire people instead of promoting them from within. And there is a good reason for that. Our labor market in the United States is very, very, very flexible. You can invest a lot of money in an employee as an employer, only to see them leave after two or three months. And so there are disincentives in our labor market for employers to make large investments in workers, especially after the big quit when so many people were changing jobs very quickly.

There is also a huge mismatch between the skills employees have and the skills employers are looking for. So I think we have a huge skills mismatch problem in the United States, with many, many people studying subjects for which there aren't many job opportunities and very, very few people acquiring the skills in trades and industries where they are. We have a very, very high demand. Right now, there are more people who have four-year degrees than there are jobs for which companies hire with that requirement. At the same time, there are very few people who have been able to access the kind of training or skills programs that allow them to get jobs that require more education than a high school diploma and less education than a four-year degree.

Believe it or not, it's much harder than you think to become one of those skilled trades. Union training programs are great, but they make up a much smaller proportion of the economy than they used to. So if you want to become a welder in many places, community colleges are perhaps your only option. And that becomes like a two-year degree program. We think community college doesn't cost that much, but if you don't have the money to pay for it, it's a burden. Skilled jobs are truly the backbone of the economy. We saw this during the pandemic. We still see it today in transportation and the supply chain.

And the companies that hire these workers are creating jobs in our community and truly growing local economies. It could cost the United States up to $975 billion by 2028 if upskilling fails to meet workplace demand. To continue to have rising standards of living in the United States, we must do two things: be productive and maintain our competitive advantage in the global economy. To achieve this, it is important that workers improve their skills and are able to adopt all the new technologies available to help us remain competitive and productive. Despite the challenges in upskilling, more and more employers are turning to skills-based hiring.

A 2023 study found that more than half of employers use pre-employment assessments to evaluate the skills, knowledge, and abilities of their job applicants, and 79% of human resources professionals say those scores are just as important, if not more, than traditional contracting. tools like resumes and interviews. Skills-based hiring occurs when employers consider candidates based on what they can do, and not necessarily their pedigree or degree. The idea is simple: could we go back and figure out what skills are needed and then see if people actually have those skills and hire them? The greatest impact can be seen in the increase in jobs that do not require degrees.

Large companies such as Walmart and IBM have publicly announced their intention to hire more workers without degrees. In January 2024, 52% of US job listings on Indeed did not mention any formal education requirements, up from 48% in 2019. The share of US job listings that required bachelor's degrees 2-4 years fell from 20.4% to 17.8% from 2019 to 2024. For reference, only 46.6% of Americans have an associate, bachelor's, graduate, or professional degree as of 2022. We're seeing companies eliminating degree requirements in hopes of expanding the pool of workers they can hire from. Skills-based hiring has proven effective in reducing bad hires, as well as cost and time to hire, while increasing employee retention by 89%. 86% of candidates also said that skills-based hiring helped them land their dream job.

But whether it will actually have a lasting impact is up for debate. A 2024 study found that only 37% of companies that had increased their share of hired workers without a bachelor's degree by almost 20% made lasting changes to their hiring. In 2023, skills-based hiring provided new opportunities for less than 1 in 700 hires. It takes time for a cultural change like that to funnel through the organization to each hiring manager, so the top of an organization may choose one thing, but the actual hiring manager, interviewers, and recruiters can still be doing something different. Experts say solving America's upskilling problem requires the role of policy.

It should be a public policy concern because we have a lot of young people who are capable and ambitious and want to do things and they can't get over that ceiling. And we have employers who,Frankly, they are making mistakes. They are simply looking for people in lower level positions rather than trying to get someone, develop them and keep them for a while. And there doesn't need to be big economic changes in how we spend money. They should be relatively small investments that help companies come together and talk about how people within a metropolitan area or a rural part of a state are going to train and develop the type of workers they need.

For current job seekers, there are several ways to prepare your applications to better fit the needs of current employers. I think the advice on this is not new, and the advice that employers want to see is: have you done this job before? Good? And that means I can find some situation where I can do this work, even if I volunteer somewhere or do an internship that looks exactly like the kind of work I want to do. And if I can do that, my chances of being able to get a job are much better. There are more and more cheap, affordable, convenient and accessible online training programs, many of which have a large practical component.

There are also platforms for freelancers where you can gain experience doing certain jobs. You can often get a job simply by being the cheapest candidate, and sometimes it's worth doing so to develop that experience and get good reviews. So don't lose hope. There are ways to gain skills, credentials, and experience that can be affordable and convenient.