Aug 28, 2024

New-Collar Workers: A Trend That Embraces Diversity

"New-collar" workers are associated with industries where employees develop their technical and soft skills through nontraditional education paths — meaning a college degree may not be a hiring prerequisite. Read through to see how new-collar workers can help your company.

A recent Cengage Group survey reported that 41% of respondents would prefer to get a certificate that would instantly qualify them for an in-demand job rather than obtain a college degree. These people are excellent candidates for "new-collar worker" positions.

What is a new-collar worker? According to Indeed, new-collar jobs are associated with industries where employees develop their technical and soft skills, often in technology industries, through nontraditional education paths. In other words, applicants are considered for open positions even though they do not have a B.A., B.S., or graduate degree. Instead, the company practices skills-based hiring, considering aptitude and insight to determine excellent job candidates.

This approach aligns with the results of a recent Harvard Business School and Accenture survey that shows that a four-year degree does not boost productivity for jobs that can be done without those degrees. IBM, which coined the term "new collar" back in 2016, has been joined by companies like Aon, Cleveland Clinic, Delta Air Lines, Merck and Bank of America in successfully practicing skills-based hiring and creating new-collar jobs.

Right for you?

To determine whether your business should consider new-collar hiring, consider these steps:

1. Drop your assumptions about people with four-year degrees. College graduates may have a broader perspective of the world — a good thing — but that perspective may not be relevant to every job.
2. Assess whether your industry is suitable for skills-based hiring. Currently, most new-collar jobs are in technology, software, engineering and health care, but that does not preclude the approach’s applicability to other industries.
3. Rethink job categories at your business. What are the actual skills a job requires? Is a college or graduate degree truly needed to perform the tasks?
4. Rewrite job descriptions for positions that fall into this category, removing the college degree requirement and emphasizing instead the skills, aptitudes and capabilities needed for the job. Include both hard and soft skills.
5. Broaden your hiring network to include community colleges, trade schools and so forth. Also consider employees already at the company. You may find you have overlooked well-qualified employees simply because they do not have four-year degrees.
6. Consider providing apprenticeships, internships and training programs for people with the right aptitudes. These types of programs can create a vibrant pool of trained candidates.
7. Make the program a companywide initiative. This means gaining buy-in from the entire leadership team, from the CEO to the line managers.

Another benefit of skills-based management is increased diversity in the workforce. There is no lack of talent if companies shift from the traditional valuing of a college degree. U.S. Census data from 2021 reports that about 65% of Americans aged 25 or older do not hold a college degree; these individuals are more likely to identify as racial minorities. Many of the individuals in this population have the skills, aptitude and insights to become new-collar workers; what they lack is opportunity.