The labor-market value of a college degree is well established: on average, college graduates have higher earnings than those with lower levels of educational attainment, and they are less likely to experience job loss in the face of economic downturns like the COVID-19 recession. Indeed, as AAC&U has documented in its employer surveys, business executives and hiring managers widely report that a college degree is worth the investment of time and money.
But what, specifically, is most valuable about what students learn in college? What competencies—or knowledge, skills, and abilities—are associated with success in the workforce?
At the Georgetown University Center on Education and the Workforce, we recently explored these questions using data reported by workers and analysts through the Occupational Information Network (O*NET). Our research complements the findings of AAC&U’s surveys of employers and hiring managers by providing information from the perspective of employees—the people who are arguably best positioned to know what they need in their jobs. It also expands on the analysis of the competencies employees need by exploring the relationship between competencies and earnings.
In our new report, Workplace Basics: The Competencies Employers Want, we present several findings of interest to postsecondary educators and their students:
The cognitive competencies associated with higher education have grown more important over time.
Since 1970, factors like automation and globalization have caused the demand for cognitive competencies to rise and the demand for physical competencies to fall. Competencies like leadership, teaching and learning, and problem-solving and complex thinking are in much higher demand than they were fifty years ago, while competencies like vision and hearing, fine motor abilities, and mechanical skills are in much lower demand.
The growing importance of cognitive competencies has coincided with the growing demand for higher education. The most intensive use of high-demand cognitive competencies generally occurs among workers with a college degree. Among workers who use communication competencies most intensively, for example, 77 percent have a bachelor’s degree or higher; among workers who use problem-solving and complex thinking most intensively, 75 percent have a bachelor’s degree or higher. In contrast, among workers who use psychomotor and sensory abilities most intensively, only 10 percent have a bachelor’s degree or higher.
Across the workforce, five competencies are consistently in high demand, and using these competencies more intensively is associated with higher earnings.
Five competencies—(1) communication, (2) teamwork, (3) sales and customer service, (4) leadership, and (5) problem-solving and complex thinking—are in high demand across all major occupational groups (which include employees across professional, technical, support, and service roles). Whatever their planned career pathways, students will likely need these competencies on the job, so a curriculum that allows all students to hone their knowledge, skills, and abilities in these areas is sure to be of benefit, whatever their major field of study.
Using these competencies at higher intensities is also associated with considerable earnings boosts. Among all nineteen major competencies we studied, using communication more intensively is associated with the largest earnings boost—an average increase of 20 percent for each one-quartile increase in intensity. For problem-solving and complex thinking, the comparable earnings boost is 19 percent. In contrast, workers who use strength, coordination, and fine motor abilities at higher intensities experience a slight average earnings penalty.
In every major occupational group, workers need these five competencies and a set of occupation-specific competencies to succeed.
The five general competencies mentioned above are among the top ten in-demand competencies in every major occupational group. The rest of the top ten for each occupational group is rounded out with competencies that are specific to the needs of those occupations. For workers in science, technology, engineering, and mathematics—the highest-paid occupational group as a whole, and among the most highly educated—the top ten competencies also include digital technology, mathematics and computer science, perception and attentiveness, engineering and physical sciences, and vision and hearing.
This suggests that the best education to prepare students for work is an education that provides the optimal blend of general and specific competencies based on students’ occupational goals. If money is a motivator, students can also benefit from knowing that certain competencies used at high intensities within specific occupational groups are more likely to give them an earnings boost. Overall, though, students would be best served by choosing their occupational pathways based on their interests and values alongside their economic goals.
Taken together, these findings provide quantitative support for a common refrain among educators: that the mix of general and specific learning associated with the US college degree is exactly the kind of learning students need to succeed in the modern workforce. As AAC&U’s surveys have established, employers and educators agree about the value of a liberal education; now we know that the argument bears out in employee experiences and earnings.
Visit our website to read the full report and see a breakdown of in-demand competencies for each of the major occupational groups.
Anthony P. Carnevale is director and research professor, Megan L. Fasules is assistant research professor and research economist, and Kathryn Peltier Campbell is senior editor/writer and postsecondary specialist at the Georgetown University Center on Education and the Workforce.
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