How Colleges — and Employers — Fail to Prepare Students for Work

The anxiety that many college students, and parents face regarding employment opportunities after graduation is visceral, amped-up further by the enormous financial investment that typically comes with higher education. 

While there is much confusion about the right way to approach career planning at these stages, new research by Wharton management professor Peter Cappelli, set to become a book this spring, is turning more than one piece of conventional wisdom on its head. One example: While it may seem wise to become more pragmatic when choosing a major, too narrow a focus may not prove successful. Even paths that once seemed a sure bet are now suspect, such as whether attending elite schools pays off. 

And one of the latest trends will surprise many: Students might be “better off thinking about … employability being driven by experiences which are extracurricular” — like internships — rather than a school’s status. Cappelli, who also is director of Wharton’s Center for Human Resources, covers these and related topics in this Knowledge@Wharton interview.

An edited transcript of the conversation follows. 

The upshot of the research for the book:

I’m finishing up a book project, and the book is tentatively titled Parents as Venture Capitalists because the idea is to see if we can trick parents into reading this book and think about what’s going on with education, and particularly college. The context is that there is an enormous amount of complaining going on in the United States now by the employer community about difficulty in hiring people, finding people with the right skills. And much of that complaining seems to be directed at education.

One of the things we wanted to look at was to see whether this is actually true — whether there is any merit to these complaints. When you look carefully, it appears that there really isn’t any merit to it, that the big change seems to be that employers are not training people — that entry-level jobs have largely gone away. What employers are really after is hiring people who can do the job as soon as they walk in the door, and the proof for that has to be that you are currently doing the same job someplace else for a competitor. That’s who everybody wants to hire. 

Nevertheless, the pressure has come around to students and to colleges to try to get more vocational, so I’m trying to look at what that means and whether it’s actually a good idea. And the conclusion pretty clearly is no, it’s not a good idea.

You can see obviously that it’s taken to extremes in some places. There are courses at most every state university on turf management, for example, which is, about golf courses. And there are courses in majors in things like adventure tourism and casino management, and every little weird niche in the market. And ultimately the issue here is that higher education, post-secondary education, is just not well-suited to deliver job training: Getting your first job is probably not ultimately what your college education is supposed to be about. 

But for parents, of course, there’s a big issue of how much money you’re spending for this and whether there will be a pay-off at the end of it. So at the moment there’s an awful lot of concern. Parents are worrying, “Is my kid going to get a job?” The employers are complaining, “We want to hire people with a particular set of skills.” And colleges are kind of in the middle, but it’s a peculiar supply chain problem. At the moment, the parents and the students — potential students — are so far removed from where the employers are in terms of information, but also just in terms of timing. The employers are saying, “Here’s what we want, but it will be five years. We’re not making any promises.” And the kids are trying to pick majors and colleges to go to based on the job market. And it’s really a mess right now, is the punch line. 

“A lot of very vocational experience in college, learning a lot of very practical things, in the long run I think is very much a waste of time.”

On the key takeaways: 

The first takeaway is that there is an incredible amount of variation in how well different colleges prepare you for all kinds of things. When we hear policymakers talk about the need for more people to go to college and that everybody, as President Obama says, needs at least a year of some sort of college, the variation is so astonishing that talking about college in general doesn’t really make very much sense. There are maybe 10% of colleges in the U.S. where going there actually hurts your rate of return. If you look at what you have to pay to go and what you’re likely to learn from that afterwards in terms of your market value, the best thing you could do is drop out — you’re really not gaining anything at all from those schools. 

And there are others that have a terrific, even immediate return. And still there are others where we think the long-term value of the education is way better than the first year job you’re going to get out of this. So I think the big return is that there is a huge variance. The information is really poor about which schools are good ones or maybe even how to think about the problem. And so it does suggest [that there is] a real opportunity for information to make a difference, and a little more careful thinking to make a difference as well. 

The most surprising conclusions:

The thing that I found most surprising and disappointing, is how messed up the system is and the extent to which kids are borrowing enormous amounts of money and going into debt chasing what they think are job opportunities that may or may not be there years in the future. I think the focus on very practical majors is ending up really turning around to bite people.

If you happen to graduate in a year when there are no casino management jobs, what do you do? I think you’re probably worse off than you would be with a classics degree — sort of equally unprepared for anything, but at least literate and understanding good arguments and critical thinking. But a lot of very vocational experience in college, learning a lot of very practical things, in the long run I think is very much a waste of time. So I think maybe the surprising conclusion is, first how messed up the system is. And second, the idea that being very vocational probably actually hurts you. 

On the practical implications:

I think a practical consideration here starts with maybe the first assertion, and that is there’s a heck of a lot of uncertainty, and so planning today where you think the job market is going to be in five years is probably a fool’s errand.  Twitter It’s just not going to work very well. One of the things we know in general from all aspects of business is shortening the forecasting time works a lot better. So one of the obvious takeaways: Delay your choice of major and delay your specification as long as possible. 

“The information on what kind of school pays off is not completely clear, but it may not be the case that it matters so much if you don’t get into these super elite schools.”

In practice, one of the things that it also means is if you go to a college where it’s going to be difficult to change majors, that’s a real problem because it’s quite likely that the student will end up being stuck there longer, maybe having to do a fifth year, as a way to try to get the courses that allow them to graduate with the new major they would like. I have a son who did exactly that and it ends up being a lot more expensive if it takes five years to get a degree as opposed to four. 

Suggested strategies as a result of the research: 

Some obvious ones are, if you can cut down the cost up front it’s easier to get a better return on your investment. The information on what kind of school pays off is not completely clear, but it may not be the case that it matters so much if you don’t get into these super elite schools. So if you’re a level below there, it might not matter very much. There’s a big area of maybe 50% of the distribution of colleges based on quality that if you’re in there, anywhere in there, it doesn’t matter all that much. 

Maybe the most interesting thing that I seem to be finding is that there’s kind of an emerging model where your employability after you graduate is driven by things that don’t have to do with your college education per se. They have to do certainly with the internships you’ve gotten. And there is even a network of vendors now that will give a recent college grad work experience in some field where perhaps they never majored in college or know nothing about. So there are places that will turn you into an IT person in six months, for example. And it’s not classroom training so much, it’s real work experience. You learn by doing, as an apprentice model might teach you. And at the end of that experience what you get are references, basically, that say “This person did the website for me. This student solved this IT problem for us. They managed this project.” Whatever it is. 

So it might very well be that you’re better off thinking about your employability being driven by experiences that are extracurricular as opposed to curricular.… 

“There’s kind of an emerging model where your employability after you graduate is driven by things that don’t have to do with your college education per se. They have to do certainly with the internships you’ve gotten.”

How else might the conclusions of this research be applied?

There are three sets of stakeholders in this discussion about colleges in the workplace. There’s obviously parents. And we’ve been talking a little bit about the parents’ concerns about their kids getting jobs and the importance of thinking longer term. There’s also schools, colleges in the middle, which have been playing something of a brokerage role, but may not have been doing a very good job of it to be honest. It’s not clear that they are really engaging the employers especially, and that they’re necessarily doing the best for the kids. 

And then there are employers on the other end. I think the lessons for employers is that if you think about this as a supply chain you would never manage any other supply chain like this, where you just complained loudly that you weren’t finding what you wanted from your suppliers and you’re just hoping they’re going to produce it at a price you want to pay, they’re just going to deliver it to your door.

But that is the way most employers seem to be thinking about the labor market — that somehow the right people will just show up when they want them with the right skills. I’d say the way to think about this as a supply chain problem is the employers who are the end users here really have to get closer to their suppliers, which at the very least are the schools and maybe even before that, the parents. 

One of the interesting things we see in other countries, especially in India, is the extent to which employers are reaching out to parents, even when they hire people, they make the pitch to the parents, not to the kids. And they  try to make the pitch at the school level before kids pick their majors, maybe even at the high school level before they pick their colleges about what the opportunities are like with their company or maybe even in that field. 

How does the research relate to what is going on in the news today? 

President Obama has had this effort for a little while about accountability in higher education and the scorecard they’re trying to produce for higher education, which is a good idea. As a parent or any kind of student or anybody, you could go on the website and try to see, what does it cost to go to school here, what are the job prospects if you graduate with this degree or that degree? I think it’s a good start. We’ve still got the problem that there is so much variation in the experience of individual students depending on when they go and which major they choose, and what school, that it’s not a perfect solution, but at least it’s a start to get some sense about whether you’re sending your kid to an expensive college that is going to do him or her any good or not.

It’s really hard to know. Schools have gotten very good at marketing, or at least better than the parents are at understanding the market. And where do you go for objective information? So, it’s not a bad start.

Dispelled misperceptions:

One of the things we hear a lot is about the STEM skill problem — STEM stands for science, technology, engineering and math — and the idea that we need lots more STEM graduates. Well, there’s no real evidence for that. If you look at where they actually get jobs, for example, in the real sciences like biology, about 20%, maybe 25% of students who graduate with a degree in biology get a job that uses biology. And even in fields that we think are hot, like IT, only about two thirds of people who graduate with an IT degree get a job in IT. And when they’re asked why they don’t, the main explanation is they couldn’t find one. So the idea that if you get a STEM degree you’re suddenly going to be fixed, your problems are solved, really does not seem to be true. 

“One of the things we hear a lot is about the STEM skill problem … and the idea that we need lots more STEM graduates. Well, there’s no real evidence for that.”

How the study stands apart:

There’s a lot of research on labor markets and there’s a huge industry in higher education. But one of the issues in research is that research tends to fit within disciplines, within paradigms where they don’t talk to each other very much. And so one of the things I’m trying to do here is to look across these different fields. So, you can see what the higher-ed folks are saying about education equality, you can see what the labor market folks say about the wage outcomes from different jobs, you can see what people in learning say about what sorts of contexts teach people the most…. You can start to see maybe some patterns across these things.

What’s next?

I think this is kind of a capstone production. I’m doing some pretty focused studies in things like financial aid and student outcomes…. My guess is I’m not following this up with anything. This is kind of it. This is what I know on this topic. Certainly the current generation of kids in college has lived through a really difficult time — the worst labor market since the Great Depression. And it’s understandable that people would be anxious about this, and especially the parents of kids who are entering college now and those who are about to leave. The good news is the economy is getting better and it’s unlikely to look the way things look now in four or five years. It’s more likely to look like the way things did 10 years or so ago. So I think the current circumstances are pretty unusual. 

The other thing is, it is unclear that obsessing about jobs now when you’re early in college or in high school — for sure — does you any good. It isn’t clear that simply getting into the best college you can is going to make a defining difference in your life afterwards, and particularly economic prospects afterwards.

There’s plenty of time, you’ve got the rest of your life to worry about your career. And your success is going to have more to do with how you manage those points than anything you can do about it in high school or even in college for that matter. So I think the advice for parents is things are going to get better, they’re already starting to get better. And worrying about it right now doesn’t do very much good because there’s not much that’s going to matter.

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