Two businessmen playing tug of warNot a day goes by without hearing about the subject of talent wars and the plight of employers struggling to fill mission critical skills with appropriately skilled talent.

While most of the advice on this topic is focused on building more effective talent management processes to attract talent, there is less commentary on whether employers should be stepping outside of the box and rethinking some of the assumptions they make about the required entry standard for employees, which may have been set impossibly high, given the skills and credentials available in the market place. We know now that there is a kind of degree inflation going on as shown in a study by Burning Glass, which revealed that employers are increasingly requiring degrees for jobs that did not traditionally require degrees.

This increasing preoccupation with degrees suggests that there is a notion that graduates outperform undergraduates, but is there any evidence to back this up and is there a chance that employers may be setting entry standards unnecessarily high and creating their own talent shortage problem? I mean, it would be folly to suggest that non-graduates were somehow limited in their ability to succeed considering that the non-graduates Bill Gates, the late Steve Jobs, Michael Dell and Richard Branson all built multi-billion pound enterprises. There is clearly unlimited potential in non-graduates!

In terms of whether graduates outperform non-graduates, I couldn’t find any research supporting this claim. In fact, I found some data to the contrary. For example, research from Gallup shows that holders of bachelor’s degrees are less engaged than workers with high school qualifications or less. And since engagement links directly to performance, there is a strong argument that less engaged graduates may perform worse than the more engaged non-graduates.

Of course, detractors may say that graduates may have learned technical skills, which means they are more competent, offsetting the lower engagement levels. But, it seems that attitude is far more important than technical skills in determining the success of new hire, according to a study by Leadership IQ. It found that 46 percent of new hires fail in the first 18 months and only 11 percent fail due to lack of technical skills, with 81 percent failing due to issues with attitude and engagement. So, technical skills don’t tend to offset shortfalls in attitude.

So, why are graduates less engaged? Gallup found that nearly 50 percent of recent graduates are underemployed, that is, doing jobs that don’t actually require a degree – and suggested this was the reason for disengagement.

As well as being less engaged, graduates come at a premium, i.e. you may be paying them more to do work in a less engaged way than a non-graduate. For example, the average lifetime earnings of a graduate are almost double that of a non-graduate in the U.S., and in the UK the graduate premium is around £200,000 over the course of the lifetime. But, with recent graduates tending to be less engaged than non-graduates, you’ll need a bigger ROI to compensate for the potential shortfall in performance.

Therefore, research suggests that it is in no way a done deal that graduates outperform non-graduates in real terms, which suggests that employers should be more open to employing non-graduates, helping companies to combat talent shortages.

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