WSJ: In This Job Market, More Companies are Lowering Experience Requirements

August 15, 2018

On the Argentus blog, we’ve spent the past few months charting the strong job market and its effects on hiring. My, how things have changed. A few short years ago, publications were writing about how employers weren’t bothering to hire for their open positions. Now, candidates are in such high demand, companies are more and more doing something that would be considered radical in the previous economy: posting positions with no experience requirements.

Kelsey Gee at the Wall Street Journal gave some frontline reporting last week about the talent picture in the U.S. economy, which is beginning to see strong wage growth follow historically low unemployment rates. She charts how more companies are becoming flexible in their hiring process, to the point of doing away with experience requirements for some positions completely. We’ve written before to argue that companies should hire people for their potential – especially junior employees – and in this market it seems that more companies are putting this into practice.  Companies like Microsoft, Bank of America and Github, are in particular relaxing education requirements and looking at candidates who don’t have degrees for positions that would have required a degree during the recession.

Alicia Modestino, an economist at Northeastern University, has argued that in times of recession companies tend to raise job requirements, like in 2008. In times of expansion – like we’re seeing now – companies become more flexible in their requirements to compete for talent, a practice Modestino calls “Down-skilling.”

At first, it might be easy to assume that companies are only doing this for transactional or administrative positions, but the Wall Street Journal interviewed the President of SCM talent group – a Supply Chain Recruitment firm in the U.S. – who said that companies are re-evaluating their requirements for Supply Chain Managers and other strategic positions. He said that his recruitment firm has been turning away clients who want to fish for underpaid or unaware applicants instead of bolstering education, experience and compensation levels in order to compete.

At Argentus, we’re working in the same vertical in Canada. Candidates in our market are in such high demand that we’ve been doing the same.

Anecdotally, we’ve seen a small uptick in roles for high-potential entry level grads in Supply Chain Management – (though still not as many as we’d like to see, with the high number of new grads that come to us!) Companies are becoming slightly more willing to relax requirements on the junior end to hire quickly; in a hiring market as strong as this one, “entry level” can actually mean entry level instead of, paradoxically, requiring at least 3 years of experience. But companies should be more flexible, at least if they want to actually hire instead of kicking tires.

In strong job markets, companies can’t afford to hire the same way they did during a recession. More employees in Procurement and Supply Chain are waking up to their own value, and the strong job market is compounding an already-considerable talent crunch. Hiring managers can’t afford to practice magical thinking in their hiring in this economy – the type of thinking that says, “if we post it, they will come,” or that treats employees like they have no leverage in the process.

The WSJ outlined three options that companies have to keep down hiring costs and secure talent in this market:

  • Offer more money up front
  • Retrain current staff to upskill them for changing requirements, or:
  • Become more flexible in their job requirements.

All three are valuable options, but for some reason the third one has always been a bit of a third rail. Hiring is a risk, and companies don’t want to hire someone who can’t do the job. But just because someone hasn’t done the exact same thing before, or just because they don’t have a degree, or just because they’ve done it before, but in another country, doesn’t mean they can’t do it.

There will always be lots of positions with considerable requirements that can’t be flexed away: a Director of Vendor management who’s conducting a business transformation obviously needs to have done that in the past. A Senior Manager tasked with setting up a totally new Supply Chain needs the deep base of knowledge and connections that certain experience provides. The necessity of strong experience and education requirements makes sense for some positions.

But for a Supply Chain Analyst, or a Buyer role, companies are well-served to relax hard-and-fast requirements and treat applicants on a case by case basis. Assess skills, assess technical and analytical capability, without requiring that candidates fit a specific experiential profile.

In our interviews with senior Supply Chain and Procurement leadership, one thing we hear again and again is that strong business acumen and soft skills – in other words, potential – is more important for junior employees than specific education requirements. So if the Wall Street Journal report is accurate, and more companies are waking up to this line of thinking, you know what?

Bring it on.


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