You’ve heard of white-collar workers and blue-collar workers, so what are new-collar workers? (No, this is not a Dr. Seuss rhyme). New-collar workers are a diverse and often overlooked talent pool in the labor market, consisting of workers who do not hold a college degree. Seeing as only 38% of the American population over the age of 25 have a bachelor’s degree or higher, new-collar workers are numerous. The term was first coined by Ginni Rometty when she was serving as IBM’s CEO in 2016. Rometty stated that “what matters most is that these employees… have relevant skills, often obtained through vocational training,” when explaining how IBM tapped into the new-collar workforce to fill vacant positions.
Although the new-collar talent pool has long been overlooked, companies are beginning to see their value; a study done by the Burning Glass Institute revealed that “some 46% of middle-skill and 31% of high-skill occupations experienced material degree resets [the de-emphasis of university degrees by employers during the hiring process]between 2017 and 2019,” noting that this was the beginning of a longer trend. This upswing comes directly after Rometty’s statement, with IBM being the forerunner for new-collar employment, and dropping the degree requirement.
The majority of new-collar workers are employed in the tech industry. This is largely the result of the last ‘Great Resignation,’ which started in 2021 and peaked in 2022. To combat this exodus, companies began practicing skill-based hiring, allowing them to fill crucial positions without waiting for the next generation to complete a four-year degree. A focus on upskilling is both a time efficient and cost-effective practice that employers can utilize to incorporate new-collar workers into their workforce, making new-collar workers an extremely viable solution to labor shortages. Upskilling involves hiring candidates with quality soft skills (communication, willingness to learn, etc.), and guiding them in hard skill development.
Many companies are offering in-house training for their new-collar employees to do just that. Bank of America, for example, offers what they dub “The Academy.” This program allows their employees to receive specialized training in order to advance within the company. In 2021 alone, over 65,000 employees utilized the Academy to that end. While this number does not consist entirely of new-collar employees, it does provide an excellent example of how non-degree holders stand toe-to-toe with college graduates. Additionally, the Forage blog argues that new-collar workers are actually more beneficial to the workplace. They claim that new-collar workers bring a level of diversity that college graduates do not, and cite a study from Research and Markets, which found that diverse companies earn 2.5 times as much as their non-diverse counterparts on average.
There are many ways in which employees can learn key skills for employment. A great example of these are S.T.A.R.s, or workers who are Skilled Through Alternative Routes. According to the Harvard Business Review, companies and organizations that overlook “on-ramps, such as apprenticeships, internships, and training programs,” are overlooking a key talent pool which, as previously stated, makes up a vast majority of the American population, and may lead to more diverse and therefore more productive workforces.
So, who are new-collar workers? They may very well play a significant role in the future of hiring, as skill-based hiring becomes more important. Is your company ready to explore this vast pool of talent?
Nexxt is a recruitment media company that uses today’s most effective marketing tactics to reach the full spectrum of talent – from active to passive, and everything in between. Learn more about hiring with Nexxt.
This article was written by Cameron Ballard.
Cameron Ballard is a student at Seton Hall University and Vice President of the English Honors Society. He has always had a passion for reading and writing, especially poetry. Beyond this, you can usually find him fishing or hiking in his home state of New Jersey.