The last decade's data and discourse reveal an unrealized American Dream for many. There are many reasons for this disappointment, and the education system's role is significant. Individual advancement and societal advancement depend on learning, skill acquisition and pathways to good jobs, and our higher education system is falling short.
Our education system doesn't serve a single purpose: But preparing people to live productive lives is undoubtedly a vital part. At a minimum, that preparation should include obtaining the skills and capabilities needed to successfully enter the workforce in a good job and to be capable of further development after that.
Higher education providers aren't direct players in the labor market—workers and employers are—but they play an essential role. In the past, employers took on more responsibility for training and developing employees and provided opportunities for internal advancement. The design of most colleges and universities did not aim to directly prepare students for jobs—unless those were jobs in the academy (and only after further study).
But the labor market has changed for good. In today's economy, employers expect new employees to already have more of the skills required for a job, and employees are also more responsible for navigating their career advancement. These effects are widely lamented, but there are no serious policy proposals that would reverse them. In the face of these changing conditions, our higher education system has failed to adapt significantly.
Americans have been slowly becoming more aware of the problems with our current higher ed model, chief among them terrible completion rates and rising costs. Now the current pandemic—and the prospect of paying $50,000 for a year of lectures on Zoom—has accelerated the arrival of a collective "aha!" moment.
In the rest of the post I'll address:
- Why higher ed should focus more on employability and setting students up for successful careers
- Three long-term changes in the labor market that the education system needs to respond to (but hasn't)
- The implications for existing colleges and universities and for new higher ed providers
Higher education providers should prioritize their students' employability and career success
This point seems incredibly obvious to most people but not to all higher education programs, so I'll highlight some key points:
- Students want jobs and see this as a primary objective in pursuing a four-year degree.
- Good jobs lead to higher salaries. Of course, money isn't everything, but below a certain level of earning, it has a massive impact on people's health and quality of life
- Moreover, work is an important source of meaning for many people. The autonomy, flexibility and security that come with better, higher-paying jobs make it much easier for people to focus on pursuing that meaning rather than just trying to survive.
- Better jobs also come with other benefits like higher status and less risk of various kinds.
Despite this, most colleges and universities do not prioritize employability and career success for their students. This is reflected in the metrics they track and report on, their allocation of resources, their pay and incentive systems—and even in the public comments by faculty and administrators at some schools
Some defenders of the status quo say that college isn't about getting a job and that it should be a time for exploration. This is a false trade-off: the college experience can comprise many other things besides job preparation too. Given the costs involved and the inescapability of the real world waiting after graduation, everyone is better served if students have a smooth pathway to a good first job.
Other defenders of the status quo emphasize that college isn't about job skills: It's about teaching you how to learn and think. I believe that is true and that those are sought-after skills for a wide range of careers. However, colleges do not explicitly target the development of even these general cognitive skills, based on how students are evaluated and what metrics and incentives the schools use.
The labor market has changed
Our economy as a whole has become much more dynamic over the past century. In my last post, I shared data showing the accelerating turnover of the Fortune 500 since the mid-20th century. The largest companies do not hold their space on the rankings as long as they used to. The emergence of completely new industries has played an important part. But almost every industry has one or more players founded after the year 2000 in the Fortune 500.
In response to and in conjunction with this more dynamic economy, the labor market has also become more dynamic. The idea of jobs for life is long gone, as companies restructure and conduct layoffs swiftly when under pressure. Workers have also learned to change jobs more frequently to get ahead. Automation and outsourcing have slowly eliminated categories of work, while entirely new roles (e.g., social media marketer) have emerged. Employers have collectively shifted more risk to employees in the form of retirement and healthcare benefits and have less willingness to invest in training and development, even as the technical content of roles have increased.
More and more, employers want to hire workers who already have the required skills and who will be productive very quickly
Also, there are many more college graduates, meaning being a graduate in and of itself is less of a differentiator. This has led to the pursuit of more and more graduate degrees—an arms race as they say.
Implications for higher education
In the face of this new labor market, the U.S. higher education system has mostly doubled down on the same model that has been in place for more than a hundred years. It is not working.
More focus is needed in three areas
(1) Increase focus on navigation and getting real-world feedback to gather experience
- Companies don't make significant investments without running small experiments to test their hypotheses first. After they decide to proceed with an investment, they still review it at key milestones with pre-determined criteria to decide whether to proceed further or change course.
- In contrast, the traditional college model does not enable real-world experimentation (it allows some experimentation among fields of study but those do not provide much information about what different jobs are like). Moreover, the traditional model encourages completion regardless of any new data.
(2) Increase focus on the skills employers want
- First jobs are important for all the reasons discussed above. Providers of higher ed should explicitly seek to develop relevant job skills—including relevant process and technical skills.
- Critical thinking skills are incredibly valuable but programs should be explicitly designed to develop these.
(3) Increase focus on connecting students with employers
- Career services are woeful at most colleges
To address these areas and to respond to a more dynamic labor market, shorter programs are needed. For adults in their 20s, 30s or 40s looking to change careers, this is obvious. But shorter programs are also needed for new workers.
Shorter programs would allow students to get real-world experience sooner and then return for more targeted and more advanced education, much like MBA students who are expected to have at least 2-4 years of work experience before attending. Traditional bachelor's degrees are too long for this application, and the right kind of complementary follow-up programs don't exist. Four-year degrees may still make sense for some students but perhaps fewer than you think.
More new institutions are needed. In theory, existing higher ed institutions could adapt to meet the needs of current students. In practice, this is not happening. To be clear, this is not to say that the current institutions should not exist in the future and can't be part of the solution. It's just to say that new institutions will be required to deliver the necessary degree of innovation. As I noted in the previous post, the average founding year of the top 50 national universities (according to U.S. News) is 1846. None in the top 50 were founded in the last 50 years.
In comparison to the changes in our broader economy, the innovation by traditional colleges and universities has been quite minimal. But there is still time to change, and there is more of an imperative than ever. The first wave of online education providers like Coursera and Udacity gained a lot of attention but haven't had a significant impact on the core system. There is also a new wave of startups taking on this space in exciting ways.
Education is key to the future of work. In the next weeks and months, I'll be covering these topics in more detail, including:
- Why is the status quo so sticky? Why are most colleges so old? Why isn't there more innovation?
- How the current model is driving high costs and student debt. What does this mean for students
- How has access to higher education improved and where are the largest gaps
- The landscape of newer higher education providers, especially "last mile" programs—including boot camps, apprenticeship and college alternatives—that are putting employability first
- Why for-profit colleges have mostly been a failure and the implications for education startups
- What other elements of today's colleges could and should be unbundled
- How elite universities could lead change from the top