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"New Collar" Workers Slowly Making Gains in Technology

By Daniel B. Kline - Updated Feb 1, 2018 at 3:01PM

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Some companies are embracing the idea of hiring based on skills, not degrees.

Not every high-paying job requires a four-year college degree. That's an idea many companies have been slow to embrace, but it's one that has gained acceptance since IBM (IBM 2.62%) CEO Ginni Rometty wrote an open letter on the subject in November 2016. 

In her letter, which was addressed to then-incoming President Donald Trump, Rometty called for the creation of more "new collar" jobs. She noted that not every job at IBM requires a traditional college degree and wrote that "what matters most is relevant skills, sometimes obtained through vocational training." She cited emerging fields including cybersecurity, data science, artificial intelligence, and cognitive business as areas that might be good fits for new collar workers.

A chart showing search for the term new collar.

Chart source: ZipRecruiter

A slow embrace

Since the Rometty letter was published, there have been signs that the market is embracing the concept. For example, Google searches for the term "new collar" have nearly doubled according to ZipRecruiter's Labor Economist Mitch Downey. He noted that tech is a natural space for new collar opportunities in a report on The Rise of New Collar Jobs.

"First, since the field changes so rapidly, workers must constantly build and adapt new abilities (rather than relying on formal university training)," he wrote. "Second, these jobs often require niche skills (like programming in a particular language, or data analysis methods) that can be learned by anyone."

The report showed that there has been an increase in jobs in the technology space advertised without an educational requirement. Since the release of the Rometty letter, ZipRecruiter found that the number of jobs requiring higher education stopped increasing and actually began to decrease. In fact, in the six months after the letter became public the percent of tech jobs with educational requirements fell slightly from 46% to 43%. The numbers climbed higher after that period and have not shown a consistent, long-term drop.

Workers are shown crowding around a laptop.

Technology has begun embracing the new collar jobs. Image source: Getty Images.

It's not big companies

While the CEO of IBM may have lit this fire, it's actually smaller companies that are leading the way when it comes to offering new collar jobs. That makes sense because in a highly competitive market for technology talent, smaller players may have to be more creative in order to fill open positions.

"Small companies are much more likely to create job posts aimed at attracting new collar workers," wrote Rometty. "[Small and medium-sized] more often list concrete programming languages as key skills requirements, while large companies continue to list computer science skills."

It's worth noting, however, that while there has been an increase in demand for new collar workers in the tech space, job seekers have not embraced the trend. People with bachelor's degrees are over three times more likely to apply to tech jobs than job seekers without bachelor's degrees, according to Downey.

"Despite the increase in tech postings aimed at attracting new collar workers, the rate at which these people apply to jobs has remained flat," he wrote. "In fact, job seekers with 4-year degrees applied to even more tech jobs after November 2016, widening the application divide between degree-holding and non-degree-holding job seekers."

It's a work in progress

What's clear from this report is that the while awareness that new collar workers can fill some tech jobs has increased, the mechanism to increase hiring has not yet fully developed. In addition, workers who might fit these positions are not yet looking for them.

Going forward, it's going to take more large companies like IBM to endorse the concept. That could result in a more direct pipeline between training programs and companies looking to hire workers based on skills not degrees.

For now, however, this is an idea gaining some traction and acceptance, but changing ingrained habits is no overnight task. Hiring workers -- especially in a tight labor market -- based on skills, not degrees makes sense. Getting it to actually happen, however, is going to take time.

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