Latest / The Diversity Career Podcast with Fexingo: Inclusion, Equity, and Underrepresented Professionals / How One Company Used Skills-Based Hiring to Remove the Four-Year Degree Filter
Transcript
- Lucas: There's this assumption baked into corporate hiring that a four-year degree is a reliable signal of competence. But a growing number of companies are testing that assumption by dropping the requirement entirely. Today I want to talk about one specific example — a large consumer goods company, we'll call it Vertex Goods, that removed the degree filter from every single role in its supply chain division. Luna: And by 'removed the degree filter' you mean they stopped even asking for it in the job description? Lucas: Exactly. They didn't just soften the language — 'degree preferred' — they eliminated the checkbox entirely from the applicant tracking system for about 1,200 roles. This wasn't a pilot. It was a policy change across the entire division, covering everything from warehouse supervisor to procurement analyst. Luna: That's bold. What prompted it? Was there a specific incident or data point that pushed them? Lucas: There was a moment, actually. The VP of supply chain had been reviewing retention data and noticed that employees hired without degrees — through internal mobility or referral programs — stayed longer and got promoted at similar rates as degree holders. So she asked the question: if the data doesn't support the requirement, why are we enforcing it? Luna: Right, and that question gets at a deeper issue. The degree filter disproportionately screens out Black and Latino candidates. According to the National Bureau of Economic Research, requiring a bachelor's degree eliminates something like 70 percent of Black adults and 80 percent of Latino adults from the applicant pool for a given role. Lucas: Those numbers are stark. And Vertex's own workforce data showed that their supply chain division was about 60 percent white in management roles, even though the surrounding metro area was much more diverse. So the degree requirement wasn't just a convenience — it was a structural barrier. Luna: How did they actually implement the change? I imagine there was resistance from hiring managers who felt the degree was a safety net. Lucas: Significant resistance. The first step was training. They brought in an external consultant who specialized in skills-based assessment. Every recruiter and hiring manager in the division went through a two-day workshop on how to evaluate candidates for demonstrated competencies — things like inventory management, vendor negotiation, data analysis — rather than academic credentials. Luna: So instead of asking 'do you have a degree?' they'd ask 'can you show me a time you optimized a supply chain process?' Lucas: Exactly that. They built a set of structured interview questions tied to specific skills for each role. And they created a work-sample test for the analyst positions — candidates were given a data set and asked to identify inefficiencies and propose solutions. Luna: That's a much richer signal than a piece of paper. But it's also more work for the hiring team. Did they scale it? Lucas: They did. And here's the key: they didn't just switch to skills-based hiring overnight. They ran a parallel process for six months — the old degree-based system alongside the new one — and compared outcomes. That gave them data to convince skeptics. Luna: And what did the data show? Lucas: After 18 months, the skills-hired cohort — candidates who came in without a degree, assessed purely on competencies — had a 92 percent retention rate versus 88 percent for degree-required hires. Promotion rates were essentially identical. And the share of Black and Latino employees in entry-level management roles jumped by 14 percentage points. Luna: That's a concrete impact. Fourteen points is huge. And I bet it changed the culture too — sending a signal that the company values what you can do, not where you went to school. Lucas: Absolutely. One of the warehouse supervisors I spoke with — a woman who had been with the company for eight years, no degree — told me that before the change, she never even applied for management roles because the job postings all said 'bachelor's required.' After the change, she applied, got promoted, and now she's mentoring three other non-degree employees aiming for the same. Luna: And that's the kind of story that makes you realize how much hidden talent gets filtered out by a single line in a job description. But I'm curious — were there any roles where they kept the degree requirement? Lucas: A few. Roles that required professional licenses — like certain engineering positions — still had the degree because it's tied to certification. But for supply chain, they removed it completely. And they're now expanding the policy to their marketing and customer service divisions. Luna: So the model is spreading internally. That's a good sign. But I wonder — how did they handle the external perception? Did they worry that removing the degree requirement might signal lower quality to customers or partners? Lucas: It came up in a board meeting, actually. A couple of directors were nervous. But the CEO pointed out that their competitors were already experimenting with degree-free hiring for certain roles, and that Vertex needed to stay competitive on talent. They framed it as a business decision, not just a diversity one. Luna: And that's the right framing. Because if you look at the data from companies like IBM and Google, they've both dropped degree requirements for many roles and reported no drop in performance. It's becoming a standard practice in tech, but it's still rare in consumer goods. Lucas: That's what makes Vertex's move notable. They're in a traditional industry — manufacturing, logistics, physical supply chains — and they proved it works outside of Silicon Valley. I think a lot of mid-market companies are watching. Luna: If we've helped you think through a career move or decision, you might be someone who values the kind of deep-dive conversations we do here. A couple of dollars a month is genuinely what keeps these going — buy me a coffee dot com slash fexingo, if you've gotten something out of them. Lucas: Yeah, it really does make a difference. And it keeps the show ad-free and focused on the kind of detailed stories we just talked about. Luna: Alright, back to Vertex. One thing I wanted to ask — did they face any legal challenges? Some states have laws against considering certain characteristics, but degree requirements are a grey area. Lucas: They consulted with employment counsel before making the change. The concern was mainly around disparate impact — if a requirement screens out a protected group and isn't job-related, you can be sued. By proactively removing the requirement for all roles, they actually lowered their legal risk. Luna: That's a smart legal strategy. And it's consistent with EEOC guidance, which says that if a selection procedure has a disparate impact, the employer must show it's job-related and consistent with business necessity. Vertex essentially said, 'we can't prove that a degree is necessary for these jobs, so we'll stop requiring it.' Lucas: Exactly. And they went a step further — they published the results internally and externally. That transparency created accountability. If they had seen a drop in performance, they would have had to adjust. But they didn't. Luna: I think the lesson for other companies is that you don't need to overhaul your entire hiring system overnight. Vertex did a six-month parallel run, collected data, and then scaled. That's a replicable model. Lucas: Absolutely. Start with one division, one role family, and measure everything. If the data supports it, expand. And if it doesn't, you've learned something without disrupting the whole organization. Luna: It's also worth noting that Vertex invested in training. They didn't just flip a switch and hope for the best. They gave hiring managers the tools to assess skills effectively. Lucas: That training piece is often overlooked. I've seen companies remove degree requirements but then managers still default to hiring people who look like they would have had a degree — same schools, same backgrounds. Training is what makes the policy real. Luna: So the policy alone isn't enough. You need the culture shift to go with it. And that takes time and leadership commitment. Lucas: Right. And Vertex's leadership was willing to say, 'we might make mistakes, but we're going to learn from them.' That willingness to iterate is rare in large companies. Luna: I think that's a good place to wrap up. The takeaway: degree requirements can be a hidden barrier, but with a thoughtful approach — data, training, transparency — companies can remove them and unlock talent. Lucas: And the next time you see a job posting that says 'bachelor's required,' ask yourself: is that really necessary for the work? Because chances are, it's not.