When GPA No Longer Matters

In just the past five years, the percentage of employers screening candidates by grade point average (GPA) has been cut in half. According to the National Association of Colleges and Employers (NACE) latest ‘Job Outlook’ survey of employers, those who screen for GPA has dropped from 73% in 2018-19 to 37% in 2022-23. This precipitous drop points toward profound implications for the future of education and work. When employers no longer value the most important measure of student performance in school and college, everything changes.

Although the survey doesn’t provide insights into why employers are ditching GPA as a screening mechanism, there are several notable trends that may be contributing factors. And it will be well worth further investigation and research to fully understand what’s happening. Nonetheless, the trend lines are clear: employers are increasingly voting ‘no confidence’ in GPA as an effective means for evaluating talent. How and why can that be? And if the trend continues, what are the implications for educational institutions, students and employers?

First, we may finally be suffering from the insidious effects of grade inflation. According to a recent ACT report, average GPA for high school students has jumped from 3.17 in 2010 to 3.36 in 2021. Average GPA among 4-year colleges and universities jumped from 2.83 in 1983 to 3.15 in 2013. An ‘A’ became the most prevalent grade around the year 2000. At Harvard, average GPA has risen from 2.8 in 1966 to 3.8 in 2022 – an entire point! If everyone gets an A, how does an employer sort out the top applicants for a job?

Second, there have been rising doubts about the work-readiness of college graduates. It’s gotten to a point where only 13% of U.S. adults and 11% of C-level executives strongly agree college graduates are well-prepared for work. Think about this: during the same time that GPA has been rising, there is a growing and widespread sense that college graduates are not well-prepared for work. Does this suggest little correlation between academic performance and work-readiness? Perhaps.

On top of this current generation of students being the least working in U.S. history, there is also evidence that few college graduates are hitting the marks on the most important work-readiness experiences of college. For example, less than 1/3 of U.S. college grads had a job or internship where they were able to apply what they were learning in the classroom. And only 26% of college graduates strongly agree their education is relevant to their work.

Third, the labor market in the U.S. has been white hot for years and employers continue to struggle to fill roles and develop talent – even into a recession where there remains 1.7 jobs open for every person looking for work. Factors such as declining rates of U.S. population growth and immigration flow are certainly weighing heavily. The population growth rate in the U.S. has been on a steady decline since 1992 when it was 1.44%. By 2022, it has declined to just .38%. Immigration to the U.S. has been on a steep decline since 2016 when 1,183,505 people immigrated to the country. In 2021, that number was just 245,000.

With virtually no population growth and dramatically declining immigration flow, U.S. employers are being forced to look for talent in ways they haven’t in the past. The impact of this includes examples such as employers dropping bachelor’s degree requirements and launching new talent development training programs for traditionally underserved populations. Added to the challenge is the increasing need for constant upskilling and reskilling for employees in the workplace. The rapid pace of technological advancement has increased the average number of days needed to train an employee by 10x in the past half decade.

All this has led to the advent of skills-based hiring. Employers are clearly signaling that what they ultimately want to know is whether someone can do the job and having them demonstrate that through skills assessments is a powerful way to do so. For those who can’t demonstrate that skill now, many employers will help them acquire the skill through short-form, intensive, non-degree training. In addition to skills-assessments being used more prominently by employers, they are putting added weight on prior work experience as well. This is true even for newly-minted graduates, where the #1 criterion an employer looks for in a college graduate is one who had a previous internship or work experience.

What does this ultimately mean for the future of education and work? Unless there is a significant improvement in the alignment between GPA and work-readiness among graduates, GPA is on its way to irrelevance. What it will be replaced with – or at least dramatically enhanced by – is a set of work-ready experiences and indicators. These are not a mystery. They simply haven’t been prioritized and scaled by most educational institutions. Educational institutions of all kinds must dramatically ramp up efforts to ensure all students have more work-integrated learning experiences such as internships or co-ops and long-term projects. Adding industry-recognized credentials to degree programs will also be an effective way to scale work-readiness.

A simple takeaway for students is that work experiences and skills matter a great deal; focusing on GPA alone will be a disadvantage in the job market. For educational institutions, it is no longer sufficient to offer work-integrated learning as an optional experience; it must be fully scaled for all students across all programs of study. And do not discount the value of non-degree training programs and industry-recognized credentials; there’s no reason they can’t be woven into the degree-based experience. For employers, there must be an urgent recognition that schools and colleges will not solve this alone; it requires a dramatic increase in the number of internship experiences offered to students.

There is no easy fix here. A dramatic shift is clearly underway. The traditional measure of student success is on the verge of becoming obsolete. There are two potential outcomes in all this: 1. GPA gets replaced with skills-based assessments and experience or 2. Various work-readiness indicators – such as skills-acquisition and work-integrated learning experiences – become a major part of how GPA is calculated. Regardless, major changes lie ahead and students, educators and employers must be ready to embrace them together.