What’s the real-world value of a college degree? It depends on who you ask.
According to a study on small business owners from Manta, small business owners with college degrees place more importance on college education when hiring. A smaller percentage of small business owners don’t have a college degree, and place less importance on education when hiring. Why?
31% of business owners don’t have a college degree
The authors of the study extrapolated that because small business owners who did not have a college degree (31% of respondents) knew from experience that college education is not the only way to build your skill set, they were also the owners more likely to hire employees based on experience and skill instead of education.
Business owners with a college degree had a different response. Although 69% of the respondents surveyed held a college degree and 68% said it “made a difference in their success,” just 61% said that having one was necessary or important to be successful in business.
Why is there such a divide here? How could some business owners think college degrees are essentially worthless while others won’t hire someone without one? And most importantly, which school of thought is truly ‘right?’
Are college degrees useful predictors of performance?
To find the answer, let’s take a look at the changing hiring practices of larger companies that have historically been inflexible with education requirements – Google, for example.
Google’s Senior VP of People Operations, Laszlo Bock, says that instead of looking at degrees and good grades, they look at aptitude and ability.
But how do you measure applicants when you’re not relying on college degrees and GPAs?
Hiring minus the college degree requirement
Google uses sample work tests – actual examples of the kind of work an employee would do as a test to find whether they’d be a good fit. That seems to make more sense than relying on the grades earned in college to determine eligibility for a job.
After all, if 31% of small business owners can start and run a successful business without needing a college degree, shouldn’t most employees be able to do their jobs without needing a college degree to do so?
Peter Cappelli thinks so. “There is a long literature in psychology showing that job performance and college grades are poorly related. It is remarkable how frequently companies rely on hiring criteria for which there is no evidence of it working.”
Something to consider
For now, consider this: A college degree offers a well-rounded study of a given subject or major that is of undeniable personal value. It provides concrete proof that you know about your major and can apply yourself consistently.
But it doesn’t necessarily prepare you for a job or make you more suited for a role than someone without a degree. It doesn’t mean you’ll be a better business owner or employee. It doesn’t mean you’ll be more successful.
So, then, how much is a degree really worth today? If 31% of business owners don’t have a college degree and still find success, could that mean that real experience is more valuable than college education?
Do you have a college degree, and do you think small business owners need one? What about the employees you hire? We’d love to hear from you.