Don’t rely on the declining value of credentialing signals: demonstrate you have the skills.

My recent conversation with Max Keiser on Summer Solutions (25:45) included three bits of advice:

1. Stop financializing the human experience

2. Acquire skills, not credentials

3. Vote with your feet

Today’s topic is acquire skills, not credentials. Get a Job, Build a Rea... Charles Hugh Smith Best Price: $7.99 Buy New $13.99 (as of 02:30 UTC - Details)

I have written two books on this topic:

Get a Job, Build a Real Career and Defy a Bewildering Economy

and

The Nearly Free University and the Emerging Economy: The Revolution in Higher Education.

There is a place for credentials that act as an entry key to a profession: a dental hygiene credential, passing the bar exam, etc.

But outside these licensed professions, credentials such as four-year college degrees are fundamentally signals: they don’t actually authenticate real-world skills, they simply signal that the holder of the credential completed the coursework.

It is remarkably easy to exit a university with a degree and essentially no practical real-world skills of the sort employers want and need.

That’s the problem with the signaling value of credentials: in a competitive economy, employers don’t want to gamble that the signal in a credential has value, they want evidence of real-world skills, i.e. the ability to profitably solve problems. The Nearly Free Univer... Smith, Charles Hugh Best Price: $6.49 Buy New $10.00 (as of 01:00 UTC - Details)

That’s the problem with signaling: some signals might be noise. Employers don’t want a signal, they want hard evidence of skills.

It is assumed that successfully navigating the institutional processes of higher education will impart professional working skills: showing up on time, performing as promised, being accountable, and so on.

This assumption is false: performing well in institutions of higher learning has no correlation to performance in the workplace. This is the conclusion that Google reached after crunching reams of data.

Lazlo Bock, senior vice president of people operations at Google, made the following comments in an interview published by the New York Times in June 2013:

“One of the things we’ve seen from all our data crunching is that G.P.A.’s (grade point averages) are worthless as a criteria for hiring, and test scores are worthless. Google famously used to ask everyone for a transcript and G.P.A.’s and test scores, but we don’t anymore…. We found that they don’t predict anything. Better Than College: H... Boles, Blake Buy New $7.99 (as of 09:00 UTC - Details)

What’s interesting is the proportion of people without any college education at Google has increased over time as well. So we have teams where you have 14 percent of the team made up of people who’ve never gone to college.”

Doing well in college—earning high test scores and grades—has no measurable correlation with being an effective worker or manager. This is incontrovertible evidence that the entire higher education system is detached from the real economy: excelling in higher education has no discernible correlation to real-world skills or performance.

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