Episode Transcript
[00:00:06] Speaker A: Today I want to talk about a very interesting and kind of controversial topic that came out of the Wall Street.
[00:00:13] Speaker B: Journal today on Wednesday, that essentially some.
[00:00:17] Speaker A: Research that was done by burning glass.
[00:00:19] Speaker B: And strata education, that roughly half of.
[00:00:22] Speaker A: College grads in the last ten years, from the 2012 to 2021 period of.
[00:00:28] Speaker C: Time, so it's about nine years, are.
[00:00:31] Speaker A: Underperforming in their financial lives. In other words, they are underemployed. They are making less money, or the equivalent that they would have made without a college degree.
[00:00:41] Speaker B: That's a pretty big indictment of what's.
[00:00:44] Speaker A: Going on in the education system. But before I get into what this.
[00:00:47] Speaker B: Is all about, let me talk about.
[00:00:49] Speaker A: The general data, and the general data.
[00:00:52] Speaker B: From every study that's been done, is that a college degree is worth a lot.
[00:00:57] Speaker A: The data that I've seen most recently says that on average, college grads, and there's a large average here of many.
[00:01:04] Speaker B: Many different ranges, on average, college grads.
[00:01:07] Speaker A: Will make 20% to 25% more per year than non college grads or high school grads.
[00:01:13] Speaker B: And over a lifetime, they will amass.
[00:01:16] Speaker A: Two to three times the wealth of.
[00:01:18] Speaker B: A high school graduate.
[00:01:19] Speaker A: Now, the price they pay is four.
[00:01:22] Speaker B: Or five years in college, time spent.
[00:01:24] Speaker A: Out of the workforce, and sometimes exorbitantly high tuition.
[00:01:29] Speaker B: So we'll talk about that in a minute. But for that price, you have a.
[00:01:33] Speaker A: Lot of economic earning potential and a lot of psychological benefits of having a college degree, being proud of your college degree, meeting people in college, getting to know different topics in college, and learning about life. And let me just take 1 minute.
[00:01:48] Speaker B: And just mention that I'm of the.
[00:01:50] Speaker A: Age when my parents basically said to.
[00:01:53] Speaker B: Me, you're going to college whether you.
[00:01:55] Speaker C: Like it or not, and you're going.
[00:01:56] Speaker A: To get a liberal arts education.
[00:01:58] Speaker B: And I did get a liberal arts education.
[00:02:00] Speaker A: I studied English and history and philosophy for the first two years, and I.
[00:02:05] Speaker B: Got bored with that stuff. And then I moved into engineering.
[00:02:08] Speaker A: And I was lucky enough to go to a school that had a very, very good engineering curriculum at Cornell. And I became an engineer, and it.
[00:02:16] Speaker C: Was kind of a heavy lift, but.
[00:02:18] Speaker A: I took physics and chemistry and mechanical.
[00:02:20] Speaker B: Engineering and thermodynamics and math and all that stuff.
[00:02:23] Speaker A: So I ended up, fortunately having quite a bit of education in liberal arts and quite a bit of education in the sciences. I don't think that's everybody's experience, because a lot of the kids or people that are mentioned in this survey are people who studied philosophy or social sciences, and they went out and they took.
[00:02:41] Speaker B: A job in healthcare or policing or.
[00:02:44] Speaker A: Maybe even human resources, and didn't really achieve a high level of earnings over.
[00:02:48] Speaker C: The first ten years of their life.
[00:02:50] Speaker B: So the data would lead you to.
[00:02:54] Speaker A: Believe that if you don't study software.
[00:02:57] Speaker B: Engineering or math or accounting or something very practical, your college degree isn't going to pay off.
[00:03:05] Speaker A: And I would suggest that that's a.
[00:03:06] Speaker B: Very limited survey and study because over.
[00:03:11] Speaker A: A long period of time, and I'm.
[00:03:13] Speaker B: Talking about many decades of your career.
[00:03:16] Speaker A: The richness of your education, the completeness of your understanding of the world, of.
[00:03:21] Speaker B: Society, of economics, of people, of science.
[00:03:24] Speaker A: Will give you many, many more opportunities.
[00:03:28] Speaker C: As a critical thinker.
[00:03:30] Speaker A: Because as most of you know, especially.
[00:03:32] Speaker C: Those of you that are recruiting, the.
[00:03:34] Speaker B: Most important skill is not somebody's technical skills.
[00:03:37] Speaker A: It's their ability to think, it's their ability to learn, its ability to reason, its ability to deal with complex information.
[00:03:44] Speaker B: And make sense of it and use it effectively to solve a problem. And that, by the way, is why engineering students do well in business, is.
[00:03:52] Speaker A: Because engineers are taught to be problem solvers, basically.
[00:03:55] Speaker B: But that all put aside, musicians, entertainers.
[00:03:59] Speaker A: People that work in the media industry.
[00:04:01] Speaker B: Publishing reporters, people who want to become.
[00:04:04] Speaker A: Influencers, people who want to become youtuber.
[00:04:06] Speaker B: TikTok stars, they have different skills and.
[00:04:09] Speaker A: They can make plenty of money doing those things today that they weren't able to do before. So what is this data really telling us?
[00:04:16] Speaker B: Well, I think there's two fundamental concepts.
[00:04:20] Speaker A: Here that I think come out from this research, and the Wall Street Journal.
[00:04:23] Speaker B: Has done a whole series of articles.
[00:04:25] Speaker A: On how colleges are providing less return on investment to students and how students are checking out and deciding maybe they.
[00:04:34] Speaker B: Don'T want to spend so much money on college.
[00:04:36] Speaker A: The first is the education industry, as.
[00:04:39] Speaker B: An industry, as a business, is out.
[00:04:42] Speaker A: Of sync with the needs of the business community. Now, a lot of companies have tried to address this, and there's been lots of research studies on it. But let me give you my personal experience. We as businesses, are trying to hire people to solve problems in our companies. We're looking for people with particular skills and general skills, writing skills, reading skills.
[00:05:04] Speaker B: Communication skills, listening skills, thinking skills, problem.
[00:05:08] Speaker A: Solving skills are by far the most important of all. If somebody applies for a job and.
[00:05:13] Speaker B: They can't spell, they can't write a reasonable email, they can't assimilate information and communicate clearly, they're not going to be.
[00:05:22] Speaker A: Very easy to hire, and they're not going to be very effective at virtually any job.
[00:05:26] Speaker B: And to me, if the college or.
[00:05:29] Speaker A: University you go to doesn't force you to learn how to write and read and learn about the world and solve problems and understand the basics of math and science.
[00:05:38] Speaker C: They haven't done their job.
[00:05:39] Speaker A: And there are a lot of degree mills that are called where you can get a college degree for $25,000, and they probably don't teach you that stuff.
[00:05:48] Speaker B: And maybe you're learning remotely, and employers.
[00:05:50] Speaker C: Pick that up very, very quickly in.
[00:05:53] Speaker A: The resume or in the conversations with prospects, and they don't offer them high paying jobs. So one of the reasons for this.
[00:06:02] Speaker B: Research, the findings, is an indictment of the educational institutions.
[00:06:07] Speaker A: Now, I don't specialize in the education industry, but having talked to many educators, the problem the educators have is their business model is dependent upon degrees, lots and lots of degrees. The outcomes of those degrees, the effectiveness of placing those people in jobs doesn't necessarily contribute to their ability to attract students. They spend a lot of time on marketing and advertising and being on the list of us news and world report and so forth. But in the article, they talk particularly.
[00:06:39] Speaker B: About Northeastern University, where students actually have internships in school, which is a great thing to do.
[00:06:46] Speaker A: We used to do that at Cornell also, but most universities don't have very much of that investment. And the college placement office is kind of a quiet place other than a place for businesses to come.
[00:06:57] Speaker C: And do, you know, I think one.
[00:07:00] Speaker A: Of the problems we have in the United States is the university industry is, in a sense, an isolated industry that is not as aligned to the needs of businesses as I think it could be. And why is that? I don't want to get into the politics of it.
[00:07:15] Speaker B: There's a lot of politics.
[00:07:16] Speaker A: I'm not a fan of forgiving student loans, not because I don't think students should go to school, but I think when you forgive student loans, that money goes directly to colleges and universities that are not necessarily adding value and doesn't incent them to be more competitive. And as the number of students goes down and we continue to live through this world of a lower birth rate, it's going to get harder and harder for these underperforming universities and colleges to stay in business. And so there'll be consolidation, things like that.
[00:07:45] Speaker B: That will happen.
[00:07:45] Speaker A: The second reason that I think this data is interesting is what we're trying.
[00:07:50] Speaker C: To do in our companies, which is skills based hiring.
[00:07:53] Speaker A: What we've been doing as a community of HR professionals for the last several decades is we've been trying to stop hiring people simply because of their degree. And many, many companies have tried very, very hard to not entirely base their hiring on a given college degree or school. Now, that problem doesn't ever go away because, as somebody just told me from.
[00:08:21] Speaker B: My days at Deloitte, Deloitte found that in the United States there are about.
[00:08:26] Speaker A: 100 great universities and 1600 that just don't produce great candidates. And so they recruit at these hundred great universities and they throw a lot.
[00:08:36] Speaker B: Of money and endowments and benefits to.
[00:08:39] Speaker A: These hundred universities so that the students coming out of those universities will come to Deloitte, as do investment banks, as do many big companies.
[00:08:47] Speaker B: So the credentialism of hiring hasn't ended at all.
[00:08:51] Speaker A: But the reason for that is that.
[00:08:54] Speaker B: A credential at a top university is.
[00:08:57] Speaker A: Essentially a sorting mechanism to get great.
[00:09:01] Speaker B: Kids, great people who think clearly, who have skills, who have experienced many things.
[00:09:08] Speaker A: In the world and probably are going to be great problem solvers and great.
[00:09:12] Speaker B: Learners and great business people also.
[00:09:14] Speaker A: So we do use college degree as a very strong signal, regardless of this.
[00:09:19] Speaker C: Focus on skills based hiring.
[00:09:21] Speaker B: But that said, we now are living.
[00:09:24] Speaker A: In a world where there are skills.
[00:09:26] Speaker B: Gaps in technology and science, in different new advanced science and technology in every.
[00:09:33] Speaker A: Industry, really, where the college degree is not necessarily the signal of what this person knows how to do. And as most of you know, as.
[00:09:41] Speaker B: Your career progresses, unless you're a college.
[00:09:44] Speaker A: Professor, most of us don't continue to.
[00:09:48] Speaker B: Use the things we used in college that much. I mean, I studied heat transfer and.
[00:09:54] Speaker A: Aerodynamics and thermodynamics and physics. I haven't used that really much at all. I used it my first couple of years, but I like to think about it, but I don't really use it in my job.
[00:10:04] Speaker B: And I think that's true of virtually everybody.
[00:10:06] Speaker A: So now that we're doing skills based hiring and we're using skills inference tools.
[00:10:10] Speaker B: And we're using AI, we're finding people whose skills are deep, but their degree is irrelevant. So this idea that just because you go to college, you're going to have.
[00:10:22] Speaker A: A high paying job is just not.
[00:10:25] Speaker B: The way the world works anymore. Now, to the students and to the people that go to college, I have.
[00:10:32] Speaker A: A very positive outlook for you and a very maybe constructive response, even though it may be true, and I believe.
[00:10:39] Speaker C: This data, I'm sure is correct, that.
[00:10:41] Speaker A: Half the people who graduate from college are underperforming in their career for the first nine years.
[00:10:47] Speaker B: That's only the first nine years.
[00:10:49] Speaker A: Careers go on for 40, 50, 60 years.
[00:10:52] Speaker B: Now, you have lots and lots of.
[00:10:54] Speaker A: Time to decide what you're going to.
[00:10:56] Speaker B: Do with your life. And many of the studies that I've.
[00:10:59] Speaker A: Particularly read myself and particularly seen in my own life show that the first ten or 15 years of your career sometimes don't matter. What matters is what you learn and what you're exposed to. And whether you get a mentor or a coach, or you pick up good habits during that period of time that allow you as an individual to find.
[00:11:22] Speaker B: The things that you love, to excel, to grow, to advance in the direction.
[00:11:26] Speaker C: You want to go.
[00:11:27] Speaker A: Maybe you really want to be a.
[00:11:29] Speaker B: Creative person, and that is the destiny.
[00:11:32] Speaker A: Of your career, and you will make a good living in that career over time. Or maybe you want to just be a salesperson, or maybe you want to work with tools and machines and cars or technology and computers. Or maybe you want to help people and work in healthcare, and maybe you don't like healthcare after a while and you've had enough of healthcare and you want to go work in research and science.
[00:11:53] Speaker B: I mean, the careers are long.
[00:11:55] Speaker A: And if I think back about my.
[00:11:57] Speaker B: Career, I've had, I don't know, eight.
[00:12:00] Speaker A: Or nine very significant different responsibilities in.
[00:12:04] Speaker B: My career, some of which I was good at, some of which I wasn't good at. But in retrospect, I am very glad.
[00:12:10] Speaker A: That I had this long period of time to develop my personal experience with my career. So I landed where I am, and I think that's the way careers go.
[00:12:20] Speaker B: I wouldn't over worry about this data.
[00:12:24] Speaker A: Unless these 45% to 50% of younger people are not getting advice because there are periods of time during your career, and I've had several, where you're in.
[00:12:35] Speaker B: A survival mode, the company's doing poorly, you hate your boss, it's a terrible job, it's a terrible company, the economy cratered, you have kid issues at home.
[00:12:47] Speaker A: You go through a divorce, you get sick, and you can't work for some physical reason.
[00:12:52] Speaker B: And all you're doing is just treading.
[00:12:54] Speaker A: Water in your job life. And that happens. I mean, I think everybody goes through.
[00:12:59] Speaker C: Those periods of time that is a.
[00:13:01] Speaker A: Normal human condition in a 70, 80.
[00:13:05] Speaker B: Year life, hopefully longer than that.
[00:13:07] Speaker A: During those lulls and ebbs and flows, you have to take your own internal strength and say, this is a period of time I'm going to get through.
[00:13:17] Speaker B: And when I come out of this, I'm going to find something better. And there are periods of time when.
[00:13:21] Speaker A: It'S really hard to find a job. You could be in a city or.
[00:13:23] Speaker B: A location or have a disability of.
[00:13:27] Speaker A: Some kind where it really is hard to find a job. But you've got to stick with it.
[00:13:30] Speaker B: And get some help and get some coaching.
[00:13:32] Speaker A: And those are some of the more important things that happen to people that feel that their earnings have not reached their potential.
[00:13:40] Speaker B: I mean, the final thing that I'll say about this data and this is.
[00:13:44] Speaker A: Targeted towards maybe you in HR, but.
[00:13:46] Speaker B: Also to job seekers is there are many ways to excel and enjoy your career. Some people have gig work.
[00:13:56] Speaker A: Some people will drive an uber car during the day and they'll do something.
[00:14:00] Speaker C: They love at night.
[00:14:01] Speaker A: Some people will strive to join the.
[00:14:03] Speaker B: Company that they love.
[00:14:05] Speaker A: Some people will find a mentor or a coach that will bring them along.
[00:14:08] Speaker C: In the organization they're in.
[00:14:10] Speaker A: All of these are valid, useful ways.
[00:14:13] Speaker B: To grow your career.
[00:14:14] Speaker A: Where you went to college and what you learned in college becomes less and.
[00:14:18] Speaker B: Less important over time.
[00:14:19] Speaker A: And the people that are struggling in.
[00:14:22] Speaker B: This particular survey, I don't know who they all are, of course, all have.
[00:14:26] Speaker A: The opportunity to turn that around.
[00:14:28] Speaker B: And so I don't think we should.
[00:14:30] Speaker A: Blame colleges or associate college so much with the general struggles that everybody has with their career.
[00:14:38] Speaker B: Everybody, including the people you think are really successful, they've got issues, too.
[00:14:43] Speaker A: So I would sort of summarize this.
[00:14:45] Speaker B: Finding with a couple of things. Number one, it is true if you're.
[00:14:49] Speaker A: A recruiter, that there are really top universities that are really good at certain things, and you're going to have to source and identify who those are depending.
[00:14:58] Speaker C: On who you're trying to hire.
[00:14:59] Speaker A: Number two, skills based hiring is real.
[00:15:02] Speaker B: And over time, unless the education institutions in the United States change, you are.
[00:15:08] Speaker A: Going to find lots of amazing people in the job market who don't have.
[00:15:12] Speaker B: The college degrees that you may have expected.
[00:15:15] Speaker A: Number three, colleges and universities have no.
[00:15:18] Speaker B: Choice but to become more competitive, to.
[00:15:21] Speaker A: Find better ways to deliver for less money, to be more aligned with the.
[00:15:26] Speaker B: Needs of the workforce and the companies and the employers around the world while.
[00:15:31] Speaker A: They develop general basic skills. That is the challenge they face, and.
[00:15:35] Speaker B: I think it's going to get tougher for them. And number four, for those of you that are looking for work, don't let.
[00:15:41] Speaker A: This information bother you. World of work goes on. Careers go on for years. You have opportunities to learn and grow. Expose yourself to as many people and opportunities as you can and you'll be surprised what's out there as opportunities for you to do new things. Life goes on over a long period of time and you can never predict when something great is right around the corner. Let me stop there and give you some ideas to think about relative to college.
