What is Degree Inflation
(A Review of Harvard Business School Report)
WHAT IS DEGREE INFLATION?
Degree inflation refers to the phenomenon in which the value of a college degree decreases over time due to the increasing number of people who hold such degrees. As more people obtain college degrees, the degree becomes less exclusive and loses some of its value as a signal of high achievement and education.
This can happen when a larger number of people obtain degrees, but the number of jobs that require those degrees does not increase at the same rate, resulting in a situation where a degree becomes necessary to enter a job market but not enough to guarantee employment.
The result is that people with college degrees may find themselves competing for jobs that were once held by individuals without degrees, which can lead to underemployment and fewer earnings than would be expected.
JUST 15 OCCUPATIONS ACCOUNT FOR 62% OF MIDDLE-SKILLS JOBS AT RISK OF DEGREE INFLATION (Bookkeeping – Accounting + their supervisors = top 2 fields at risk)
The job market landscape is constantly changing, with new industries emerging and traditional jobs evolving. One of the biggest challenges facing the job market today is the issue of degree inflation, which occurs when a college degree becomes less valuable over time due to the increasing number of people who hold such degrees. Recently, a report by the Harvard Business School and Burning Glass Technologies found that just 15 occupations account for 62% of middle-skills jobs at risk of degree inflation, with bookkeeping and accounting and their supervisors topping the list.
Bookkeeping and accounting have long been considered essential functions in any organization, and they continue to be in high demand today. These positions require a combination of technical skills, such as knowledge of accounting software and tax regulations, as well as soft skills such as communication and problem-solving. However, the report found that the degree gap in these occupations is significant, with employers increasingly requiring a college degree for positions that historically did not require one.
According to the report, the degree gap for bookkeeping and accounting is 20%, which translates to approximately 220,000 jobs at risk of degree inflation. This means that individuals without a college degree may find it increasingly difficult to obtain jobs in these fields or may face lower wages and limited career advancement opportunities.
The supervisors of bookkeeping and accounting workers also face a similar degree gap, with a degree gap of 27% equating to roughly 95,000 jobs at risk of degree inflation. These supervisors play a crucial role in overseeing the work of bookkeepers and accountants, ensuring accuracy and compliance, and providing support to their team members.
The report highlights the potential consequences of degree inflation for both employers and employees in the bookkeeping and accounting field. Employers may face increased recruitment and retention costs as they compete for a smaller pool of college-educated talent. They may also miss out on qualified candidates who do not have a college degree but have the necessary skills and experience for the job. On the other hand, employees without a college degree may find it increasingly difficult to obtain jobs in these occupations or may face lower wages and limited career advancement opportunities.
To address the issue of degree inflation in bookkeeping and accounting, the report recommends that employers consider alternative credentialing methods, such as industry certifications, apprenticeships, and work-based learning programs. These methods can provide job seekers with the skills and knowledge needed to succeed in these occupations without requiring a college degree. Additionally, the report recommends that policymakers and educators work together to better align educational programs with the needs of the labor market.
In conclusion, the bookkeeping and accounting field, as well as their supervisors, are among the top two fields at risk of degree inflation according to a recent report. Employers and policymakers must work together to find alternative ways to credential job seekers and ensure that non-degree holders have access to quality training and career opportunities. By doing so, they can help ensure that the value of a college degree remains high while providing opportunities for all individuals to succeed in these important occupations.
EMPLOYERS BELIEVE RECENT GRADUATES ARE MORE LIKELY TO HAVE HIGHER SALARY EXPECTATIONS AND LOWER ENGAGEMENT
According to a 2016-2017 survey conducted by Accenture, Grads of Life, and the HBS Project on Managing the Future of Work, employers believe that recent graduates are more likely to have higher salary expectations and lower engagement. On the other hand, non-degree workers are perceived to have a higher retention rate.
These findings highlight the challenges faced by recent graduates when entering the job market. While higher salary expectations may be driven by the rising cost of education and the need to pay off student loans, employers may view these expectations as unrealistic and not aligned with the experience level of recent graduates. This perception could result in recent graduates being overlooked for job opportunities or being offered lower salaries than they expect.
Lower engagement levels among recent graduates may also stem from a lack of real-world experience and the need to adjust to the demands of a professional work environment. Employers may view this as a potential risk to their business, as employees who are not engaged may not perform at their best and may be more likely to leave the company.
In contrast, non-degree workers may be perceived as having a higher retention rate because they have already demonstrated a commitment to their job and their employer. They may also be more willing to accept lower salaries and take on a wider range of responsibilities, which can make them more valuable to employers.
It is important for recent graduates to be aware of these perceptions and work to overcome them. This may involve setting realistic salary expectations and demonstrating a strong work ethic and commitment to their employer. By doing so, recent graduates can increase their chances of being hired and establish themselves as valuable members of the workforce.