Speaker 1: The benchmark of a six-figure salary used to be the gold standard income.

Speaker 2: Many entry-level job seekers find themselves in a catch-22. In order to get experience, you'd need a job, but in order to get that first job, you need experience.

Speaker 3: Over a third of employers refrain from hiring recent Gen Z college graduates in favor of older employees.

Speaker 1: People making well over six figures are still living paycheck to paycheck.

Speaker 4: 90% of organizations are concerned about employee retention.

Speaker 5: Our parents would get pensions, they would work for a company for a certain amount of time, retire, and be paid for the rest of our lives. So the incentives have shrunk, and so the loyalty is just not there.

Speaker 4: More than half of Americans say they would need at least $100,000 a year to be financially comfortable.

Speaker 1: The benchmark of a six-figure salary used to be the gold standard income. It represented the tipping point of finally earning a disposable income and building a savings, spending based on your wants, not just your needs.

Speaker 6: The American dream is what makes a middle-class lifestyle. You're able to pay your bills. You're able to put food on the table, put a roof over your family's head, and you have some additional savings.

Speaker 1: Now people making well over six figures are still living paycheck to paycheck. What used to symbolize financial freedom is now keeping people stressed about making ends meet.

Speaker 4: Only 26 percent say they would need more. A salary in the range of $100,000 to $149,000 per year would make them feel financially comfortable.

Speaker 6: I think, unfortunately, what has happened is that wages haven't kept up with the cost of living by and large for the last 50 years or so, and so it becomes increasingly hard for many families to be able to attain that sort of middle-class lifestyle, that American dream.

Speaker 7: How much you need to feel financially secure varies so much depending on not only your geographical location but, of course, your lifestyle. It used to be that a six-figure salary was like the gold standard, but nowadays that may not be enough to make ends meet in certain parts of the country, especially like New York or San Francisco, where it costs so much more just to cover your daily expenses.

Speaker 4: Here's why a $100,000 household income no longer buys the American dream. GO Banking rates analyzed how much a family of two adults and two children would need in each state to own a home, a car, and a pet, as well as have an additional 20 percent of their income for savings and 30 percent for discretionary spending.

Speaker 6: The core of what the American dream means is some amount of economic security that you feel like you can get by and do a bit better, maybe do better than your parents, maybe be able to afford a house, certainly be able to save for your children's future.

Speaker 4: All 50 states require more than a $100,000 annual income, with 38 states needing more than $140,000. The most affordable states, Mississippi, Arkansas, and Kentucky, need between $109,000 and $117,000. The median income for a household of four people in each of those states in 2022 was between $71,000 and $87,000. Hawaii, California, and Massachusetts are the most expensive. Each requires an annual income of more than $240,000. The median income for a family of four in those three states in 2022 fell at least $94,000 short of what's required for the American dream. A different analysis from EPI found that in about 80 percent of the country, a family of four can afford their basic needs on less than $100,000 per year. Those include things such as housing, food, transportation, health care, child care, taxes, and a few other basic necessities.

Speaker 6: It doesn't take into account anything extra. It's really just putting food on the table, putting a roof over your head, getting health care for your family. And so you're not saving for a rainy day if something happens to somebody or if they lose their job. So there's no extra in there for retirement, for kids college. Those are the kinds of things that many people want to save for. Those are the many things that people consider a part of the American dream.

Speaker 4: Only about 3 percent of those counties have a median income higher than the basic cost of living.

Speaker 7: The idea behind the American dream hasn't really changed, even though lifestyles have. It used to be that you could get out of school, get a job, buy a home and start a family. And now those milestones are harder to achieve.

Speaker 8: It used to be that a high school degree, you're good to go. You can get a great job building cars or something and be right in the middle class off of a high school degree. But now, in order to get in the middle class, a high school degree is clearly not enough, right? Now, you've got to pay for college.

Speaker 7: People are graduating with much larger student loan balances, and then it's harder to be on that same sort of career trajectory that would provide the stability that you maybe would have had a generation ago to save up for the down payment on a home.

Speaker 4: Student loan debt reached an all-time high of 1.77 trillion dollars in the first quarter of 2023. This can have a ripple effect, especially when entire generations are starting their adulthoods with thousands of dollars in debt.

Speaker 6: So when you think about the kinds of investments you want to make for your children, the cost of college has gone up a lot faster than overall inflation. So trying to make those investments on a smaller and smaller paycheck compared to the cost of living can be very difficult and almost impossible. And so the kinds of debt that young people can rack up going to college gets larger and larger and your ability to then make ends meet yourself, be able to buy a car, be able to move out of your parents' house, those things become much more difficult over time.

Speaker 1: The American dream typically is people owning property and having children, but that's becoming largely inaccessible for many people, and even those who have attained these things are finding themselves managing every dollar coming in and out just to stay afloat. So that tradeoff is underlying the new cost of the American dream.

Speaker 4: Millennials and Gen Zers still want to buy homes despite feeling like they can't afford it. 62% of younger millennials and 63% of Gen Zers still say owning a home is part of the American dream. 66% of U.S. renters surveyed say rising prices leave them feeling hopeless about ever owning a home. 72% of respondents say they can't afford the down payment. 17% of all homebuyers said that saving for the down payment was the most difficult task in the buying process, and 52% said student loan debt delayed their ability to save. The typical first-time homebuyer in 2022 had a household income of $95,900. Nationally, a prospective homebuyer would need a nearly $110,000 salary to afford the principal, interest, taxes, and insurance payments on a median price home. But the median household income in the United States in 2022 was a little under $75,000.

Speaker 8: If you're born into a nice neighborhood in which your parents have lots of wealth and lots of income, your chances of doing well are vastly improved.

Speaker 4: Part of that's home ownership. Collectively, Americans owe $1.13 trillion on their credit cards.

Speaker 1: Inflation, it's eroding people's purchasing power. It's reducing their ability to save for their future or invest in these long-term goals. So that loss of financial stability can create a sense of powerlessness and insecurity and contribute to feelings of uncertainty and vulnerability. It can really impact people's self-esteem, their resilience, their overall psychological health.

Speaker 4: Economists have suggested that debt growth became a substitution for income growth. More than a quarter of Americans said that they are doomspending or spending money despite economic concerns.

Speaker 7: There's also this idea that young adults are feeling more discouraged in their own financial standing. So in that way, they're less inclined to even save for long-term goals and more likely to just live in the moment. It's just sort of that mentality like, you only live once, I may not buy a home anyway, so let's take that trip or let's go to that event, whether it's a Taylor Swift concert or other big ticket item.

Speaker 4: Seventy-three percent of Gen Zers say the current economy makes it difficult to set up long-term goals.

Speaker 7: And it's not just about revenge spending. It's just about wanting to enjoy life and make the most of what you have, even if you can't necessarily buy that home or you're not starting a family just yet and you really want to feel good about yourself in the moment.

Speaker 1: People are indulging to the extreme, and I think we often buy because we think that it's going to change our life or it's going to give us this emotion that we feel like we're missing. And it's like an endless trail of spending and constantly going to make us feel empty because we're externalizing something that we need to give to ourselves. I think that's a big issue with consumerism, and it's running rampant.

Speaker 7: Social media has changed the conversation so much because there's just been this abundance of the ability to see these glamorous, glorified lifestyles. It's not only celebrities that are presenting themselves this way, but even your own peers, which makes a lot of people feel like they're just not measuring up. They can't financially compete with what they're seeing online. It has left a lot of people, especially young adults, feeling very discouraged in their own financial standing. Even if they're doing okay, they just may not feel that way when they compare themselves to what they're seeing on social media.

Speaker 8: The question is, are you able, given kind of the luck of the birth lottery, are you able to have opportunities that are the same as those of people who may have been born into families that are in better circumstances than your own? The American dream is all about it shouldn't matter. The birth lottery shouldn't matter, right? So it's deeply relative.

Speaker 4: 95% of American workers said they plan to look for a new job in 2024. Money is a big part of this. 45% of American workers say they need a higher income. Job switchers increase their salary more quickly on average than those who stay put. In February 2024, people who stayed at their job for more than three months increased their salary by 5.1% year over year, whereas those who switched jobs increased by 5.9%.

Speaker 5: I ended up almost doubling my salary after a year and a half. And then from there, each year, I probably increased my salary from anywhere to $15,000 to $35,000 or $40,000.

Speaker 4: But hiring professionals stress that it's important to be strategic about job moves.

Speaker 2: You don't want to rise up the ranks too quickly and then be this expensive head that's sort of easy to chop in any kind of downturn.

Speaker 9: I think companies do expect an unrealistic level of loyalty. But unfortunately, we're at their whim a lot of times, right? So we do have to play the game. And that game is making it seem like you're going to spend the rest of your life there.

Speaker 4: They really do want to be lied to. So how long is the optimal amount of time to stay at your job for your career advancement, salary and your well-being? The survey data about why people leave their jobs is pretty consistent across the board. Ranking at the top of the list are wanting a higher salary and not feeling like they have room for growth at their current job. The desire for higher salaries may lead people to job hop, which is when a worker jumps from job to job within a short period of time.

Speaker 10: Oftentimes, switching companies is the fastest way to get to that next level role in terms of seniority and in terms of your income level. And the reality behind that is in your current company, for you to get promoted, for you to get to the next level, that position needs to open up in a way that it's either someone leaves or they get promoted or the company is growing.

Speaker 4: Gen Z is 36% more likely than other generations to prioritize advancement opportunities. Even if there are opportunities for promotions within their current workplace, they may still find it easier to leave.

Speaker 2: A lot of employers are reaching out to people and recruiting them. Workers have more negotiating power that way. You can also find out more easily what wages are available just by going on ZipRecruiter and looking at job postings, whereas perhaps finding out what the opportunities are within your company involves sort of an uncomfortable conversation with your manager.

Speaker 4: Other common reasons for leaving are to get better benefits, to escape a toxic work environment, and for better work-life balance.

Speaker 11: The ancillary thing is, if I pay people more, would they be happier? If that were true, then investment banks and private equity firms, law firms would be the happiest places in the world to work. They notoriously aren't viewed that way because there's a certain way that you treat people, whether it's benefits or whether it's time off or compensation or, quite frankly, just how you treat people on a day-in and day-out basis with interpersonal skills. Those are the things that end up being more important.

Speaker 4: Workers also have career aspirations that may not be fulfilled in their current positions.

Speaker 5: Early in my career, I always had the goal of eventually working for myself. So I told myself, around the age of 30, try and get enough experience and exposure to the things that are required to have a consulting firm. So each job that I've worked, I've always left a company if I felt like I had already obtained the skill that I needed to obtain. And if I wasn't getting opportunities to obtain the skills that I needed, I went to the next place.

Speaker 10: As humans, we tend to change every two to three years in terms of our goals, our priorities, our stages of life. And now the younger generations ask themselves, well, how does my career serve me and not the other way around?

Speaker 9: There's never a wrong reason to want to leave. If you want to leave, you can leave, right? But you have to be smart about leaving.

Speaker 4: Americans consistently stay at their jobs for a median of three to four years. In 2022, the median tenure was 4.1 years. In 2002, it was 3.7. And back in 1983, it was 3.5 years. But breaking those numbers down by age paints a clearer picture about how long Americans should stay at their jobs. Between 2002 and 2022, workers aged 20 to 24 typically stayed at their jobs for less than one and a half years. As you look at older workers, the median tenure increases with each age group.

Speaker 2: I think a lot of people think of job hopping as being generational, but it's actually more driven by age than generation. So are parents' generations at the same age as young people today? A lot of the data shows that they quit at very similar rates.

Speaker 4: A Bureau of Labor Statistics study found that American adults born between 1957 and 1964 held an average of 12.7 jobs between the ages of 18 and 56, with nearly half of those jobs held before the age of 25.

Speaker 10: I think the idea that you have to stay at one company for an extended period of time comes most probably from our families and our parents, because their expectation and their version of success was to stay within one company or at least within one career their entire life.

Speaker 5: Our parents would get pensions, they would work for a company for a certain amount of time, retire and be paid for the rest of our lives. So the incentives have shrunk and so the loyalty is just not there.

Speaker 4: Another thing to consider is a lot of benefits accrue over time. So if you switch companies too quickly, you could be leaving money on the table. For example, some employers won't allow you to keep your 401k match until you've been there for a certain number of years.

Speaker 10: I see a huge wave of Gen Z and millennial professionals asking themselves, is this job, is this career right for me? And what do I want for my career to look like and to feel like? And where do I find this career versus feeling like, hey, I have to stay doing what I've been doing in my career.

Speaker 9: Recruiters say there's more leeway for job switching earlier in your career. Gen Z can do that right now because they're in their early 20s. But when they get to their late 20s or their early 30s, they can't be moving like that. You're 22 years old. You're not making any career mistakes right now. There are so many places that you could go and none of them would be a mistake because you're so young and you have so many years to figure out what you want to do. When you're 35, not really, right? Ideally, you're in your career and you're making a good salary with great benefits. And once you have that, you need to be more strategic and intentional about those moves that you make because now you can make a really bad career mistake.

Speaker 4: Instead of asking how long you should stay at your job, career experts suggest shifting your focus to how much you've accomplished.

Speaker 5: I think the biggest risk with job hopping or leaving your job too early is you not understanding where you are in your development. And that's why I try to tell people, remove your focus on money, especially if you're being compensated okay and you're able to pay your bills and survive. Don't focus on just getting a huge pay bump before you are actually ready, before you have gained the right skills. Don't focus on time. Don't focus on money. Focus on skills. And if you are comfortable in the skills that you are acquiring, then you are ready to move on to the next level.

Speaker 4: Workers may also want to consider looking at their career as a whole rather than honing in on only tenure or compensation.

Speaker 5: I took a $20,000 pay cut when I job hopped the first time. And I knew that was okay because it would come back tenfold based on the experience I was going to be getting at the new place of work. So I don't focus on the money. And I know that's a privileged thing to say because my roles compensate me well. And at the time when I started in my career, I just really shrunk my cost of living, I would say. I lived in a house with seven other people and my rent was like $500. So after I took the $20,000 pay cut, I ended up almost doubling my salary after a year and a half. And then from there, each year, I've probably increased my salary from anywhere to $15,000 to $35,000 or $40,000. And now that I'm an independent consultant, I mean, this is the most that I've earned ever.

Speaker 2: While it could deliver a quicker pay raise to switch jobs, often long-term loyalty and tenure are rewarded in the end. And so if you look at the top five highest paid people within a company, they're often the veterans who were there from the start. The company may only want people in senior leadership positions who have a demonstrated track record of reliability, of sustained performance, and of loyalty to the company. Companies don't do promotions that often. They might do them once a year, twice a year. And so if you've only stuck around two cycles, but the company has a policy of promoting people about once every three years, yeah, you may miss out on that big payday.

Speaker 5: If you are not a self-aware person and you don't do a lot of introspection for what you are and are not ready for, job hopping is not wise, in my opinion. If you're not really able to assess your true skill set, it's going to be hard for you to get the opportunities that you want or reach your end goal.

Speaker 4: Timing and the broader economy are important factors as well. How difficult would it be to find a new job? In January 2024, the Glassdoor Employee Confidence Index fell to its lowest point since 2016.

Speaker 9: You need to figure out the strategy before you give that notice because it is taking people six to 12 months to land a new position.

Speaker 4: A 2023 survey from Insight Global revealed that 55 percent of unemployed adults said they've been searching for a new job for so long that they are completely burnt out. This trend is hitting Gen Z the hardest, with two-thirds of them suffering from application burnout. But 75 percent of Gen Z workers would quit their jobs without having a new one lined up. I personally would never leave a job if I don't have another opportunity already lined up. Another part of being strategic is thinking about how employers are viewing a candidate's work history.

Speaker 10: For employers, turnover is challenging and very expensive because hiring realistically takes a lot of time and a lot of resources.

Speaker 4: 90 percent of organizations are concerned about employee retention. Helping employees upskill is a key component to retaining talent. Companies with strong learning cultures see higher rates of retention, more internal mobility and a healthier management pipeline compared to those with smaller levels of commitment. But there's also a Goldilocks dynamic to this. Sometimes companies don't mind turnover.

Speaker 11: People think that employers don't want any turnover. I disagree with that belief. And I think the companies that don't want turnover are actually creating more problems and mistakes. Because that would imply that every person you hire was right. And I have never met anybody who's perfect at anything.

Speaker 2: There are many industries that don't seem to mind high turnover very much.

Speaker 4: But some companies may be taking on a more forgiving attitude when viewing work history.

Speaker 2: I think employers are very, very suspicious of workers who switch jobs for a tiny incremental pay raise. But they understand if people are pursuing opportunities to learn more, to sort of advance their careers, to get broader experience with some career goal in mind.

Speaker 9: I think the people who are in hiring positions now that are millennials 10 to 15 years into their career have just a lot more empathy than older generations. And they don't expect the lifelong loyalty that older generations expected.

Speaker 10: Most people realistically have some sort of a gap on their resume. And the longer you are in the workplace, the higher the chance that you will have a gap or you will have a short term three month experience on your resume because that didn't work out. Employers are human. And they know that they understand that. And the chance that the hiring manager that you're talking to has gone through that themselves

Speaker 9: is actually very high. You have to figure out what is the best decision for you. And the only person who can do that is you. And people come to me all the time like, just tell me what to do. And I tell them, I can't tell you what to do. I can tell you like what I would do in this situation. But I can't tell you what to do because this is your career. And it's going to affect you. Picture yourself on the hunt for a new job.

Speaker 3: After scrolling through numerous job postings, you finally land on one that seems to be a perfect fit. That's until you see the required years of experience, necessary certifications, and a host of skills you need to be proficient in. In 2023, 42% of employees felt like they were ready for a new job. And that's not all. And a host of skills you need to be proficient in. In 2023, 42% of employees felt they were excluded from job opportunities due to a lack of formal qualifications or experience. Lacking enough of the right experience, skills, credentials, and or education ranked second among the biggest barriers for job seekers in 2022.

Speaker 12: The job market today is definitely tougher than the job market we've seen over the last couple of years.

Speaker 2: Many job seekers don't know what they're qualified for and feel that they're unqualified for jobs even that on paper look like a good fit. Meanwhile, companies say they are putting skills first. There has been a shift over the past few years towards skills-based hiring, with employers far more concerned about employees' experience and skills than even their degrees.

Speaker 3: 46% of companies plan to increase their hiring in the first half of 2024 because their current employees lack the required skills. 79% of workers and hiring managers said that skills, experience, and past accomplishments are more valuable than credentials and education.

Speaker 13: I think right now we see businesses working together and trying to identify what are the skills that are really necessary to do the jobs for which they're hiring today and to be able to predict the jobs that they will be hiring for in the coming months and years.

Speaker 3: So why are job requirements becoming more demanding? And what implications does it have for both job seekers and the economy as a whole?

Speaker 12: The U.S. labor market has cooled in recent months because overall economic activity has cooled. We had a big bout of inflation and the Fed raised interest rates to slow down the economy to allow supply to catch up. As a result, the labor market has slowed down as well.

Speaker 3: Hiring rates in the U.S. have dipped to 3.5% in March 2024, following heights during and after the pandemic. Total job postings declined more than 15% at the end of 2023 compared to the year prior. There was one open job for every active applicant on LinkedIn in 2022. By the following year, that ratio turned to one job for every two active applicants.

Speaker 12: When there are more candidates on the market looking for jobs and less jobs out there, the job market becomes more competitive for job seekers. But for employers, that means they get their pick of talent.

Speaker 2: If a job says that it requires no experience, but 100 people apply and many of them do have experience, well, of course the employer is going to take the person with the most experience. We also are in a high interest rate environment where companies have less access to capital and so they're less prepared to take a risk. They're only hiring where needed for sure bet jobs, and they're not being that experimental anymore.

Speaker 14: There's another reason why, and that is about the hiring process per se, which has changed. Employers increasingly got rid of recruiters.

Speaker 3: 2023 saw a sharp decline in online job postings for job recruiters, with several prominent companies like Google, Apple and Amazon laying off a significant number of recruiters and employees in the HR department.

Speaker 14: The recruiters were the kind of professional people who understood the job market, understood jobs, and would go to the line managers and say, hey, this job doesn't need five years experience. With those people gone, there's no real pushback on hiring requirements. Line managers who really aren't experts on this stuff, they might ask their team, what do you think you need to do this job? And say, well, it'd be nice to have a master's degree. Well, somebody who has five years experience, that would be great too. And so the requirements inflate, and then they can't find anybody to fill the job. And they say, oh, there's a skills gap. There's a problem in the labor force. And they don't raise the wages either, right? So you're trying to fill the same job at the same pay, but now you're requiring more background, more experience, more years of education. Guess what? Hard to do.

Speaker 3: As companies grow more selective, 54% of recruiters said quality of hire will be their top priority for 2024 through 2029. 83% of chief human resource officers said they're hiring talent with specialized skills while hiring fewer new employees than they did a year ago.

Speaker 12: What we're seeing on LinkedIn is that for employers, skills are becoming a priority. 73% of recruiters say that that is a priority when they're trying to source candidates. They want to know what skills they have, what they can actually do.

Speaker 14: What employers want is evidence that you can actually do the work. The other thing is they want somebody who's done exactly that job before and not something that looks quite similar.

Speaker 3: Hiring for entry-level and less specialized positions dropped from 79% in 2022 to just 61%.

Speaker 12: Typically, when the labor market slows, entry-level workers are hit a bit harder than overall workers.

Speaker 14: We don't have real entry-level jobs, hardly at all. Every employer wants to hire somebody who's already worked someplace else.

Speaker 3: Entry-level jobs only account for 2.5% of all the jobs posted on ZipRecruiter as of the end of April 2024, and just 1.9% of all jobs available today say they do not require experience at all. Over a third of employers refrained from hiring recent Gen Z college graduates in favor of older employees, with more than half saying recent college graduates are unprepared for the workforce. A survey also found that more than half of Americans who graduated from a two-year or four-year college did not apply for an entry-level position because they felt unqualified.

Speaker 2: Many entry-level job seekers find themselves in a catch-22. In order to get experience, you need a job. But in order to get that first job, you need experience. And that is a very challenging position to find yourself in.

Speaker 3: 57% of general job seekers between 2020 and 2022 also said that a lack of skills or training prevented them from applying for a job they wanted. 84% of unemployed workers said they are interested in more opportunities to learn more skills.

Speaker 13: The United States does not have a robust system that enables us to support the kind of upskilling and training that workers need throughout their career in order to advance.

Speaker 14: Federal government spends very little and has little control over education. And on training, too, there are some pretty big training programs the federal government pays for. But it's not really where the action is. It's state and local governments. And those have been squeezed. And in many states, they're squeezing everything down, less and less spending.

Speaker 3: OECD countries on average spent 0.11% of their GDP on training their workers in 2021. In comparison, the U.S. spent only 0.03% of their GDP on job training.

Speaker 12: One of the reasons we may not see as much on-the-job training in the U.S. as we see in other countries is that we rely on the private sector to do a lot of our training.

Speaker 14: The employers have largely given up on training, particularly compared to where they were 30 or 40 years ago. They're not developing talent internally. They're looking outside to hire people rather than to promote them from within.

Speaker 2: And there's a good reason for that. Our labor market in the United States is very, very, very flexible. You can pour a lot of money into an employee as an employer only to see them leave after two months or three months. And so there are disincentives in our labor market for employers to make big investments in workers, especially after the Great Resignation, when so many people were switching jobs very quickly.

Speaker 3: There's also a huge mismatch between the skills employees have and the skills employers are looking for.

Speaker 2: I think we have a huge skills mismatch problem in the United States with lots and lots and lots of people studying subjects for which there aren't that many job opportunities and very, very few people getting the skills in trades and industries where they're in very, very high demand.

Speaker 13: Right now, there are more people that have four-year degrees than there are jobs for which businesses are hiring with that requirement. At the same time, there's too few people who have been able to access the kind of training or skills programs that enable them to get jobs that require more education than a high school diploma and less education than a four-year degree.

Speaker 14: Believe it or not, it's a lot harder to become one of those skilled trades than you would think. The union training programs are great, but they're a smaller proportion of the economy by a lot than they used to be. So if you want to become a welder, in many places, the community colleges are your maybe only choice, and that becomes like a two-year degree program. Community colleges don't, we think, cost that much, but if you don't have the money to pay for it, it's a burden.

Speaker 13: Jobs that require skills training are really the backbone of the economy. We saw this during the pandemic. We see it today still with transportation and the supply chain. And the businesses that hire these workers are creating jobs in our community and are really growing local economies.

Speaker 3: It could cost the U.S. as much as $975 billion by 2028 if upskilling doesn't catch up with the demand in the workplace.

Speaker 12: In order to keep having rising standards of living in the U.S., we need to do two things. We need to be productive, and we need to maintain our competitive edge in the global economy. In order to do that, it's important for workers to upskill and be able to adopt all the new technologies that are available in order to help us stay competitive and be productive.

Speaker 3: Despite the challenges in upskilling, more employers are turning towards skills-based hiring. A study from 2023 found that more than half of employers use pre-employment assessments to test their job applicants' skills, knowledge, and abilities, with 79% of HR professionals saying those scores are just as important, if not more important, than traditional hiring tools like resumes and interviews.

Speaker 12: Skills-based hiring is when employers consider candidates based on what they can do and not necessarily their pedigree or degree credentials.

Speaker 14: The idea is simply, could we go back to just figure out what skills you need and then see whether people actually have those skills and hire for the skills?

Speaker 3: The biggest impact can be seen in the rise of jobs that require no degrees. Major companies like Walmart and IBM have publicly announced their intention to hire more workers without a degree. In January 2024, 52% of U.S. job postings on Indeed did not mention any formal education requirement. Up from 48% in 2019, the share of U.S. job postings requiring two- or four-year degrees fell from 20.4% to 17.8% from 2019 to 2024. For reference, just 46.6% of Americans have an associate's, bachelor's, graduate, or professional degree as of 2022.

Speaker 13: We're seeing businesses removing degree requirements in a hope of expanding the pool of workers from which they can hire.

Speaker 3: Skills-based hiring has shown to be effective in reducing mishires, as well as cost and time to hire, while increasing employee retention by 89%. 86% of candidates also said that skills-based hiring helped them secure their dream job. But whether it actually makes a long-lasting impact is up to debate. A study from 2024 found that only 37% of companies that had increased their share of workers hired without a BA degree by nearly 20% made lasting changes to their hiring. In 2023, skills-based hiring provided new opportunities for less than one in 700 hires.

Speaker 2: It takes time for a culture shift like that to funnel through the organization to every single hiring manager. So the top of an organization may choose one thing, but the actual hiring manager and interviewers or recruiters may still be doing something different.

Speaker 3: Experts say solving the issue of upskilling in the U.S. requires the role of policy.

Speaker 14: It should be a public policy concern because we have lots of young people who are skilled and ambitious and want to do things and can't crack that ceiling. And we have employers who frankly are making mistakes. They're just churning through people at sort of lower level jobs rather than trying to get somebody and develop them and hang on to them for a little bit.

Speaker 13: And they don't need to be huge economic shifts in how we're spending dollars. It needs to be relatively small investments that help companies come together and have conversations about how folks within one metro area or one rural part of a state are going to be training and developing the kind of workers that they need.

Speaker 3: For current job seekers, there are several ways to prepare their applications to better suit the needs of current employers.

Speaker 14: I think the advice on this is not new. And the advice is what employers want to see is have you done this work before, right? And so that means can I find any situation where I can do this work, even if I'm volunteering someplace or getting an internship that looks exactly like the kind of work I want to do. And if I can do that, my odds on being able to get a job are just much better.

Speaker 2: Increasingly, there are lots and lots of cheap, affordable, convenient, accessible online training programs, many of which have a large practical component. There are also freelancer platforms where you can get experience doing certain jobs. You can often get jobs just by being the cheapest candidate. And sometimes it's worthwhile doing that to build up that experience and get good reviews. So don't feel out of hope. There are ways to gain skills, credentials, and experience that can be affordable and convenient.