US is shifting from 'degree-centric economy to a skill-centric economy,' experts say
Since mid-2022, hiring rates have fallen consistently for all jobs, but especially those that typically require a bachelor's degree
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Taking an unconventional career path could give jobseekers an advantage in the highly competitive job market.
According to Ramsey Solutions' Ken Coleman, upskilling constantly and specializing in a specific craft "is the game going forward."
Coleman told FOX Business that he believes over time, degrees are going to become less valuable. Instead, people should look at what direction they want to go in, what skill sets are needed for those roles and where to attain them, Coleman said.
"Specific upskilling on the path that you want to go… it's a lot easier and a lot less time-consuming than the potential four-year degree or two-year degree," Coleman said. "We're going to see more and more fields stop requiring a college degree."
Construction is seen at the Toll Brothers Borello Ranch Estates housing community in Morgan Hill, California, on June 4. (Getty / Getty Images)
"Upskilling" is a term used to describe when an employee is provided with training programs and development opportunities to expand their abilities and minimize skill gaps.
Ian Zhu, CEO of SchoolJoy, a generative learning system, agreed with Coleman, saying that the U.S. is "shifting from a degree-centric economy to a skill-centric economy" and that a "vocational education or an associate's degree supports this skill-centric economy." This is especially true given the acceleration of generative AI in the workplace, Zhu said.
In July, ADP looked at data representing more than 16 million people at more than 31,000 U.S. employers from January 2019 through May 2024, and discovered that finding a job in today's market has been harder for those who have attained a bachelor's degree.
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Since mid-2022, hiring rates have fallen consistently for all jobs, but especially for those that typically require a bachelor's degree, according to ADP data.
Homes under construction are seen at the Cold Spring Barbera Homes subdivision in Loudonville, New York, on Nov. 8, 2023. ( Angus Mordant/Bloomberg via Getty Images / Getty Images)
The data showed that as hiring rates fell for jobs that require college degrees, turnover rates fell even more. But, for jobs without advanced degree requirements, turnover rates fell more slowly in comparison to hiring rates, leading to slower growth in that sector of the labor market, ADP said.
Mark Hedstrom, executive director at Skilled Careers Coalition, said the current labor market is particularly tight for the top talent in traditional four-year degree careers as the U.S. unemployment rate sits near a historic low.
A mechanic reaches into his tool chest in a shop. (iStock / iStock)
What makes matters worse is that the tight labor market is coupled with a "changing nature of work for these careers, such as the growth in AI, hybrid and remote workplaces."
Hedstrom continues to see young people who opt for four-year college degrees not landing the jobs upon graduation that they were expecting, leaving them "disillusioned and in debt."
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At the same time, the "skilled labor gap continues to widen" with more opportunities for highly trained professionals in skilled careers spanning construction, industrial, manufacturing, creative and service, according to Hedstrom.
"A rise in demand for skilled careers and skilled talent, and a drop in demand for four-year degree jobs has no doubt fueled the ‘toolbelt generation’ phenomena among 20-somethings who are turning to vocational and trade schools more and more to get a jump on a high-paying in-demand career," he added.