Why Small Businesses Are Increasing Educational Requirements for Employees

April 6, 2016 Pete Jansons

A diploma and grad hat represent a high achieving student.

When it comes to hiring talent for your small business, are you more particular about their educational background than you used to be? If your answer is “yes,” you aren’t alone.

According to recent CareerBuilder research, more than 1 in 4 small business employers (26 percent) say they have increased their educational requirements for jobs over the last five years.  One in five employers (20 percent) are hiring more employees with master’s degrees for positions that primarily had been held by those with college (4-year) degrees, and 3 in 10 (30 percent) are hiring more employees with college degrees for positions that primarily had been held by those with high school degrees.

Higher degrees are also influencing promotion decisions. Thirty-five percent of small business employers say they are unlikely or highly unlikely to promote someone who does not have a college degree.

The impact of increased education

Part of the reason for the increasing their educational requirements is that skills for many positions have evolved, requiring higher educated labor. Many employers also say they are able to get college-educated labor for positions once primarily held by those with high school degrees due to the tight job market.

Employers are already seeing a positive impact from this change, including a higher quality of work and better productivity. Other areas where employers are seeing positive results from increasing the number of employees with a college degree include:

  • Communication
  • Innovation/idea-generation
  • Employee retention
  • Customer loyalty
  • Revenue

While some employers are seeking more educated workers externally, others are working internally. The majority of small business employers already offer training programs for employees (including in-house training, online programs and certifications outside the company), and 35 percent of small business employers are sending current employees back to school to get an advanced degree. (Twenty-five percent of employers are even partially or fully funding the degree.)

The value of investing in employee training can’t be overstated. Whether that means increasing educational requirements, training employees on the job or sending them back to school for a higher degree or certification programs. Remember, when you invest in the future of your employees, you invest in the future of your company.

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