Credentialism and its Pitfalls | Opinion

Why Credentials Aren’t Everything

Link to the Original Editorial

If the pandemic made one thing clear, it is that our economy is shifting radically.

There are roughly 57.3 million freelancers working in the United States, and only about 33 percent of them would prefer a traditional job. Eighty percent of freelancers report being satisfied with their jobs—an optimistic metric given the dreary state of traditional work. Likewise, among our traditional workforce, 36 percent of workers are gig/temp workers.

The pros and cons of this shift in the economy are straightforward. Freelancers have autonomy in choosing work and freelancer jobs generally pay well. With the added benefit of setting your schedule, it can be a great way to make a living if you are disciplined enough. Working as a freelancer requires no formal credentials or college degree, making barriers to entry much lower than most traditional jobs. Some freelancers are not formally educated, allowing many to find work without the worry of automatic rejection due to lack of credentials. Given the rates of job satisfaction among freelancers, and the high-paying nature of freelance work, does this not undermine another growing shift in the economy? Namely, credentialism?

A change in our economy has been ongoing for quite a long time—namely, a transformation in our economy from an experience economy to an economy that gives formal credentials precedence. Surely some positions would be most optimally filled by a formally educated individual, such as a doctor with a MD, who attended medical school. There are countless jobs where a formal credential is helpful for employers while reviewing applications. It would be unconscionable to hire someone as a surgeon if they did not have a MD.

But how necessary is it for almost every job to require some formal credential to even be considered for an interview? For instance, 16 percent of production supervisor positions are currently filled by individuals with a bachelor's degree. In comparison, 67 percent of current production supervisor job postings require a bachelor's degree, risking roughly 6 million jobs, simply because of increased employer demands for bachelor's degree requirements. This is otherwise known as degree inflation. How does this make sense when employers generally report that their non-graduate workers perform equally as well on the job as their graduate workers?

Credentialism has made things much harder for employers to fill positions, as less than half of the U.S. population possesses a college degree. Employers are beginning to catch on to just how inefficient over-emphasizing credentials are to hiring high-quality workers. It seems that, as public pressure mounts, the economy will start to re-appreciate the value of experience, not just credentials.

It seems that our culture is not yet ready to move past credentialism. A common experience among high school graduates is the pressure to go to college. These students worry about being perceived as a "failure" or "loser" if they don't attend university. Yet, nearly half of recent college graduates are jobless.

Bridgewater Associates—as envisioned by its founder, Ray Dalio—is a great example of how businesses might shift in a more positive direction away from credentialism. Bridgewater is what Dalio referred to as an "idea meritocracy," where credentials don't matter. What matters is whether or not you have good ideas, and whether or not you're willing to really hear out good ideas from people who are not formally credentialed. In Dalio's book Principles, despite the financial nature of his business, Dalio said that he hired "un-credentialed" individuals who lacked any formal financial education, simply because they understood the nature of the industry well and were also open to on-site job training.

Individuals with the skillset and experience to fulfill a specific high-skilled role should not be excluded from employment because they do not have a degree or credential. On-the-job training generates efficient workers and significantly improves employee retention rates, irrespective of whether or not the trainee has formal credentials. When employers invest in the development and education of their employees, employees work more efficiently and are, in general, happier.

Such training is underutilized by employers—making their complaints about struggling to hire high-skilled workers all the more banal. Credentialism needlessly keeps many from finding work, makes the process of hiring new workers obtuse and opaque and has created a culture that paradoxically gives preference or demerit to certain credentials, depending upon context and political disposition.

Freelancing and the research regarding the overwhelming success of on-site training proves that we need not retain this dismal state of affairs. If anything, it shows that our economy is and should be moving away from tradition, and toward workers' freedom and empowerment. But insofar as our economy continues to over-value credentials, our culture will deepen in its shallowness, and our economy will continue to produce disgruntled and unproductive employees and employers alike.