Education versus Experience: Which influences hiring decisions more?

A fundamental issue of judgement for a recruiter when evaluating any candidate is to weigh the worth of academic degrees against real world professional experience. The fact that both continue to be considered for any role demonstrates that business managers value intellectual ability and street smarts. However, there are specific and distinct reasons for why each is valuable. To decide which aspect should be given more weightage depends on many job-specific factors, but it is important to first understand in general what degrees and work experience separately show about a candidate.      

The case for degrees

Analysis from the US Bureau of Labor Statistics shows that degrees are beneficial for job seekers, and enhance their potential earnings. In 2020, its research indicated that people with a Bachelor’s degree earned a median income of US$1,248 per week, while those with only a high school diploma earned a median income of US$746 per week. Moreover, the unemployment rate for individuals with a Bachelor’s degree was 2% while the rate for those which just a high school diploma was 3.8%. 

This reflects a positive correlation between the monetary value placed by companies on employees and their level of educational attainment. Broadly speaking, this is because jobs that require more than a high school diploma are likely to entail relatively complex intellectual tasks, the ability for which is indicated by a Bachelor’s or higher academic degree. There are also very specific reasons for hiring requirements pertaining to academic achievement.         

• Specialised knowledge. Many professions demand degrees as a minimum requirement, such as for doctors, lawyers, and engineers. This is to ensure that potential candidates have acquired the requisite level of knowledge that is specific to, and indispensable for, working in a particular field. While on-the-job training enhances this knowledge base, a prior minimum level of understanding is necessary.      
• Transferable skills. Completing a Bachelor’s or higher degree requires a certain amount of all-round intellectual ability, apart from mastering specific bodies of knowledge. While at university, students need to develop time management skills, analytical abilities, and research capabilities, which are highly transferable across disciplines.    

Real world experience 

While having a respected university’s name on a resume adds credibility for the reasons outlined above, when push comes to shove from a business perspective, it is a worker’s ability to deliver actual results that matters. For this reason, demonstrable practical success and market experience are highly valued by employers, notwithstanding an applicant’s academic credentials. 

This isn’t the case just for workers, as success in entrepreneurship also suggests that ‘real world’ experience can often be the more practically useful factor. Individuals such as Steve Jobs, Oprah Winfrey, and Bill Gates are good examples: college dropouts who went on to make fortunes in diverse industries. When considering a potential worker or business leader, there are some distinct reasons to pay special attention to what they have done instead of what they studied (or didn’t).                  

• Differentiation. While most university graduates come with similar experiences and academic abilities, actual work experience is often the main differentiating factor between job applicants. Having successfully completed practical projects or met business targets can make an individual stand out from the crowd.
• Hitting the ground running. A candidate with relevant industry experience is much more likely to learn the ropes quickly and require less practical training, compared to fresh graduates or individuals with relatively less experience.      

It’s not an “either, or”

From a recruitment perspective, both education and work experience remain critical. A market survey in 2012 exploring employer preferences found that while 65% of jobs required post-secondary education, employers still considered some form of experience such as internships or volunteer work to be more important than GPA or coursework when evaluating applicants. On the other hand, according to a 2018 study by the Association of American Colleges and Universities, 88% of executives and 85% of hiring managers surveyed said that they considered candidates with college degrees to be more worthy due to the time, money, and effort expended in attaining them. It would be unwise to completely neglect one in favour of the other; education and experience both need to be weighted appropriately depending on the nature, seniority level, and level of specialisation of the job.