I agree that a little empirical research would go a long way. What's out there is largely lefty anger about managerialism and righty anger about navel-gazing lefties not getting with the program.
I'm intrigued by what's going on at UT with course-level outcomes that are developed by the faculty, basically in answer to the question, what will students who pass your course learn to do? The idea is that the students have those course outcomes in their back pocket to trot out to employers or parents or whoever who want to know what they know how to do. So, instead of a credential, students have information to support their own understanding of the social value of their educational experiences.
Will employers care to ask students about the social value of their educational experiences? Maybe not, but maybe those who invest in an actual process of learning about their job applicants will find this useful.
Measuring "outcomes" of learning through wages seems to be some sort of incentive to get universities to talk to businesses about what skills (or "credentials") are needed but what a goofy way to accomplish it. And agree about lack of interest in social value, which may not manifest itself for a decade....
I don't understand the claim that firms have no incentive to tell universities what skills they want and would prefer to gripe to politicians
My experience is that professors largely know the missing skills but don't care. "I teach you principles and how to learn"
And industry screams about what they need loudly and often
Specifically, industry has spent 30 years saying that Computer Science grads should be able to write professional software. Despite that, many graduates manage to never even use source control. This is changing one funeral at a time, luckily
My experience at P&G, where I spent my entire career, was that the company made the training investments as a way to build the capabilities needed to excel in the marketplace so there was no conflict between training investments & delivering business outcomes.
This also meant, most of the training was on-the-job training rather than classrooms in any fancy campus that people had to travel to. This approach is true for front line technicians & management employees. And one reason why P&G is able to attract talented employees around the world.
Some colleges in some markets (a very small number from my experience) make the effort to partner in a way that both parties benefit from this but this is the exception rather then the norm.
I’d echo comment by JM: the top consulting firms continue to make substantial investments in training. The training programs that McKinsey runs are superb. One two-week training I attended was worth more than a year of business school. The sessions were full of experiential learning, role-play exercises that I can still recall 25 years later. When companies run their own training programs, the opportunity cost is high - they are taking those employees away from their day jobs. So big incentive to invest and make the programs truly value-additive and not just a credential or signaling. When an academic instruction runs a training program, incentives are to maximize revenue. Before McKinsey I was a submarine officer, and the six-month Nuclear Power School covered more material than two years of a STEM college degree. The military is an interesting case to compare against corporate and academic training, as the military also has high incentives to deliver effective training.
This was an excellent overview, Hollis, and I’m glad to see attention returning to the quiet disappearance of institutional training. You’re absolutely right. Something vital was lost when companies stopped investing in the long-term development of their people. But I think there are two pieces of this story that deserve a bit more friction.
First, the rot at the heart of the current system is more structural than economic. Under modern capitalism, corporations are legally obligated to prioritize shareholder value above all else. Training programs? Long-term human development? These are expensive liabilities now. Any executive who tries to rebuild a modern-day Crotonville can be sued for misallocating resources. We built a system that punishes anyone who tries to train workers.
Second, there’s the AI angle, the elephant brushing past the filing cabinets. You touched on workforce alignment, but there’s another shift underway that directly intersects with credentialism: automation now enables the appearance of skill acquisition without the reality of learning. With many online courses reduced to box-ticking rituals and generative AI able to complete much of the coursework, credentials are easier than ever to stack, yet harder than ever to trust.
Meanwhile, the same AI that helps students “earn” those badges is also screening their résumés. It’s gatekeeping both ends of the pipeline. That’s a closed circle. The snake eating its own tail.
Thank you again for the thoughtful piece. I just think if we’re going to talk about how we got here, we also need to look at the operating system we’re all still running, because the system is teaching us not to teach.
Might have to write a full rebuttal soon. There’s a lot more here worth dragging into the light.
"If some fields are in “high demand,” shouldn’t the employers that want the skill be willing to pay for the training?"
And how long does that employer get that skilled employee for, after training? A year? Two years, 10 years? Or a month because they employee comes back to work and resigns to go work somewhere else that can get a free ride on your training?
Back in the 1980s this didn't happen so much. Because of less mobility people didn't have so much choice. They didn't change job so much. You trained someone, they would probably work for you for a decade. As it became more common in the 90s, employers wanted to do less of it. At which point, people have to do a lot more of their own training.
There was an attempt to address this in the UK. Companies would hire you, train you and if you left within 2 years, you would pay back your training. These employees went to court, claiming it amounted to indentured servitude, which is illegal, and got away without repaying their training, so of course, companies stopped doing that.
Would you consider the large consultancies (e.g., McKinsey) and the large investment banks (e.g., Goldman) exceptions to this general rule, at least for the slice of high intensity + early career roles that college graduates can access?
College is a major financial investment. It only works if it's ROI-positive for students and taxpayers.
What is the point of govt-subsidized college education if not to increase the productivity, earning power and future tax collections of college graduates?
To make good parents? Good citizens? Stewards of culture? Visionaries? Conservators of the best that is known and thought? To instill values and virtues and judgement?
Those are all “nice to have” tertiary benefits that do not require a college education.
Abe Lincoln. Carnegie. Rockefeller. Ford. Etc. all achieved incredible things that pushed the human race forward without a college education.
Besides, now we have increasingly powerful AI, which has the potential to be a fundamentally better teacher. The potential of AI as a teacher has not been fully realized (will take years), but it’s obvious that the math on higher ed as we know it is not mathing, so something needs to change.
I expect that AI will do to universities what the internet did to newspapers.
Context: my father was a community college professor. I dropped out of Berkeley twice, then paid my way through Columbia by working as a 911 paramedic in the Bronx. Got an incredible education in the late 2000s, but feel I am now learning faster than I ever have thx to AI.
I don't disagree with your analysis at all. And perhaps you agree that if firms invested in training, more people might not go to college at all, or at least not right away.
I agree that a little empirical research would go a long way. What's out there is largely lefty anger about managerialism and righty anger about navel-gazing lefties not getting with the program.
I'm intrigued by what's going on at UT with course-level outcomes that are developed by the faculty, basically in answer to the question, what will students who pass your course learn to do? The idea is that the students have those course outcomes in their back pocket to trot out to employers or parents or whoever who want to know what they know how to do. So, instead of a credential, students have information to support their own understanding of the social value of their educational experiences.
Will employers care to ask students about the social value of their educational experiences? Maybe not, but maybe those who invest in an actual process of learning about their job applicants will find this useful.
Measuring "outcomes" of learning through wages seems to be some sort of incentive to get universities to talk to businesses about what skills (or "credentials") are needed but what a goofy way to accomplish it. And agree about lack of interest in social value, which may not manifest itself for a decade....
I don't understand the claim that firms have no incentive to tell universities what skills they want and would prefer to gripe to politicians
My experience is that professors largely know the missing skills but don't care. "I teach you principles and how to learn"
And industry screams about what they need loudly and often
Specifically, industry has spent 30 years saying that Computer Science grads should be able to write professional software. Despite that, many graduates manage to never even use source control. This is changing one funeral at a time, luckily
You may be right about computer science. This is an important conversation.
My experience at P&G, where I spent my entire career, was that the company made the training investments as a way to build the capabilities needed to excel in the marketplace so there was no conflict between training investments & delivering business outcomes.
This also meant, most of the training was on-the-job training rather than classrooms in any fancy campus that people had to travel to. This approach is true for front line technicians & management employees. And one reason why P&G is able to attract talented employees around the world.
Some colleges in some markets (a very small number from my experience) make the effort to partner in a way that both parties benefit from this but this is the exception rather then the norm.
I’d echo comment by JM: the top consulting firms continue to make substantial investments in training. The training programs that McKinsey runs are superb. One two-week training I attended was worth more than a year of business school. The sessions were full of experiential learning, role-play exercises that I can still recall 25 years later. When companies run their own training programs, the opportunity cost is high - they are taking those employees away from their day jobs. So big incentive to invest and make the programs truly value-additive and not just a credential or signaling. When an academic instruction runs a training program, incentives are to maximize revenue. Before McKinsey I was a submarine officer, and the six-month Nuclear Power School covered more material than two years of a STEM college degree. The military is an interesting case to compare against corporate and academic training, as the military also has high incentives to deliver effective training.
LOVE this.
And can we get some company pensions back, too, while we're at it?
This was an excellent overview, Hollis, and I’m glad to see attention returning to the quiet disappearance of institutional training. You’re absolutely right. Something vital was lost when companies stopped investing in the long-term development of their people. But I think there are two pieces of this story that deserve a bit more friction.
First, the rot at the heart of the current system is more structural than economic. Under modern capitalism, corporations are legally obligated to prioritize shareholder value above all else. Training programs? Long-term human development? These are expensive liabilities now. Any executive who tries to rebuild a modern-day Crotonville can be sued for misallocating resources. We built a system that punishes anyone who tries to train workers.
Second, there’s the AI angle, the elephant brushing past the filing cabinets. You touched on workforce alignment, but there’s another shift underway that directly intersects with credentialism: automation now enables the appearance of skill acquisition without the reality of learning. With many online courses reduced to box-ticking rituals and generative AI able to complete much of the coursework, credentials are easier than ever to stack, yet harder than ever to trust.
Meanwhile, the same AI that helps students “earn” those badges is also screening their résumés. It’s gatekeeping both ends of the pipeline. That’s a closed circle. The snake eating its own tail.
Thank you again for the thoughtful piece. I just think if we’re going to talk about how we got here, we also need to look at the operating system we’re all still running, because the system is teaching us not to teach.
Might have to write a full rebuttal soon. There’s a lot more here worth dragging into the light.
"If some fields are in “high demand,” shouldn’t the employers that want the skill be willing to pay for the training?"
And how long does that employer get that skilled employee for, after training? A year? Two years, 10 years? Or a month because they employee comes back to work and resigns to go work somewhere else that can get a free ride on your training?
Back in the 1980s this didn't happen so much. Because of less mobility people didn't have so much choice. They didn't change job so much. You trained someone, they would probably work for you for a decade. As it became more common in the 90s, employers wanted to do less of it. At which point, people have to do a lot more of their own training.
There was an attempt to address this in the UK. Companies would hire you, train you and if you left within 2 years, you would pay back your training. These employees went to court, claiming it amounted to indentured servitude, which is illegal, and got away without repaying their training, so of course, companies stopped doing that.
Would you consider the large consultancies (e.g., McKinsey) and the large investment banks (e.g., Goldman) exceptions to this general rule, at least for the slice of high intensity + early career roles that college graduates can access?
It is a good question — as I said I looked for good research and found little.
College is a major financial investment. It only works if it's ROI-positive for students and taxpayers.
What is the point of govt-subsidized college education if not to increase the productivity, earning power and future tax collections of college graduates?
To make good parents? Good citizens? Stewards of culture? Visionaries? Conservators of the best that is known and thought? To instill values and virtues and judgement?
Those are all “nice to have” tertiary benefits that do not require a college education.
Abe Lincoln. Carnegie. Rockefeller. Ford. Etc. all achieved incredible things that pushed the human race forward without a college education.
Besides, now we have increasingly powerful AI, which has the potential to be a fundamentally better teacher. The potential of AI as a teacher has not been fully realized (will take years), but it’s obvious that the math on higher ed as we know it is not mathing, so something needs to change.
I expect that AI will do to universities what the internet did to newspapers.
Context: my father was a community college professor. I dropped out of Berkeley twice, then paid my way through Columbia by working as a 911 paramedic in the Bronx. Got an incredible education in the late 2000s, but feel I am now learning faster than I ever have thx to AI.
I don't disagree with your analysis at all. And perhaps you agree that if firms invested in training, more people might not go to college at all, or at least not right away.
Given how little worker loyalty there is, I don’t see how it makes sense for firms to invest in worker training.
Maybe it’s a chicken vs egg problem. I dunno.
But honestly, with AI you can now kinda learn anything. It’s insane.
Personally, I see traditional employment being replaced by AI-enabled entrepreneurship. This is the where the puck is going — we should skate there.