Opportunity@Work: Addressing the opportunity gap and improving workforce equity outcomes

In the fifth installment of the McKinsey Action 9 Fireside Chat series, McKinsey partner Darius Bates chats with Byron Auguste, cofounder and CEO of Opportunity@Work, to discuss how the organization is changing the talent marketplace to enable workers, who are skilled through alternative routes (STARs) rather than four-year college degrees, to access higher-paying jobs. They are joined by McKinsey partner Carolyn Pierce, who leads McKinsey’s collaboration with Opportunity@Work. Here are some highlights of the discussion:

• Byron Auguste shares his motivation for founding Opportunity@Work after a successful career at McKinsey and serving in the Obama administration. His experiences highlight the macroeconomic issue of long-term unemployment and the rigid hiring practices that have historically excluded STARs.
• Byron and Carolyn explain how Opportunity@Work assists organizations in transforming their hiring practices through the use of data, visualization tools, and other resources.
• Carolyn discusses her role in forging a connection between Opportunity@Work and McKinsey and how the two organizations have teamed up to build practical tools for inclusive hiring as well as share research to scale Opportunity@Work’s impact.
• Byron outlines the importance of ensuring equitable outcomes for Black STARs and other underrepresented groups.

This transcript has been edited for clarity and length.

Darius Bates: Hello, everyone, and welcome back to the McKinsey Action 9 Fireside Chat series, a collection of conversations on place-based efforts to improve equity outcomes for people of color. Through these discussions, we aim to surface and share key insights, successes, and challenges from leaders working in the place-based domain in hopes of deepening and accelerating impact across various geographies.

I’m Darius Bates, a partner in McKinsey’s Atlanta office and the partner lead for our action 9 commitment. To learn more about McKinsey’s 10 actions, see “Our ten actions toward racial equity.” In partnering with organizations to bring about equitable outcomes for Black communities, we created this forum to highlight the work and learnings from these efforts, which leads me to the introduction of today’s guests.

I’m pleased to welcome Byron Auguste, cofounder and CEO of Opportunity@Work, and Carolyn Pierce, a partner in McKinsey’s Southern California office who leads our firm’s pro bono support for Opportunity@Work. Opportunity@Work is a national nonprofit organization based in Washington, DC, that supports talented individuals known as STARs, which stands for those skilled through alternative routes such as job experience, military service, or community college, rather than through a bachelor’s degree. These individuals represent more than 70 million people in the US, which is approximately half of the workforce, and they possess skills that often go untapped in the talent marketplace. Opportunity@Work is working to change that.

Byron cofounded Opportunity@Work in 2015. Prior to that, he was the first Black senior partner at McKinsey. He also has served as an economic policy advisor in the Obama administration. Thank you for joining us, Byron and Carolyn. It’s great to have you here. I know I’ve just begun to touch on your background and commitment to enabling economic empowerment, but I want to start with a bit more on the why.

Founding motivation for Opportunity@Work

Darius Bates:  Byron, let’s talk a bit about how a person of your talents and drive becomes passionate about an initiative like Opportunity@Work, and specifically, as someone who has run the race to join the partnership at McKinsey, I understand it can be a tough call to leave that path and embark on a new one. So, when you think back to 2015, can you help us understand how you arrived at the decision to leave behind your successful career in consulting and then your next career in the Obama administration to start Opportunity@Work? What was your most critical activation point or points?

Byron Auguste: Well, Darius, I think my most critical activation point, or the moment when I somewhat changed trajectory, was when I decided to go into the Obama administration in 2013. I had been at McKinsey nearly 20 years at that point, and I loved my career there. I loved problem solving, and I loved working with people. I had been working on increasingly complex problems in the tech industry and then in public–private partnerships around the world, so going into the Obama administration was a decision to focus that problem solving on the United States.

I was deputy director of the National Economic Council around the time when the United States was recovering from the Great Recession, and long-term unemployment was still a lingering problem. It was so striking to me, coming from the business side, to see how much of the problem was showing up at the macroeconomic level looked like a business decision-making problem.

Specifically, there had always been this rule of thumb that if you were out of work for six months, then somehow you were a lemon, and it became harder and harder to employ you. But of course, when you have millions of people out of work all at once, it doesn’t make any sense to think about it that way. And yet the way businesses were acting was so rigid; they were following the prompts, which really struck me.

I came from the world of McKinsey, where we talked about the war for talent and how getting the right talent can be such a competitive advantage. At the National Economic Council, I moved to a world in which we were looking at millions of Americans who were just as skilled on paper as the ones working but were just in the wrong place at the wrong time. And yet our business systems were not reactive, which really struck me. I think it was the first time in the White House that we had chief HR officer forums and chief learning officer forums, where we actually brought in businesses to really look at this problem through a business lens.

And when all was said and done, I was working for two or three years in the Obama administration on the real economy problems of employment, infrastructure, and so forth—lots of working with the private sector. I found there was a huge gap when it came to the labor market regarding how to get businesses that were responsible for most of the employment to really adapt their own talent processes in a way that would not only have great effects on the business, but a macroeffect. I felt there was such a need, and I’d been following that since I left the White House.

Darius Bates: That makes a lot of sense; thanks for sharing that. I know you’ve known Carolyn for quite some time, and she’s played a critical role in connecting Opportunity@Work with McKinsey. Carolyn, to you: Can you speak on what inspired you to move in that way—to try to bring our organizations together for collaboration?

Carolyn Pierce: Absolutely. I was very fortunate to end up at McKinsey. I joined in a somewhat unconventional way, and the focus I’ve always had in the work I’ve done here is to help organizations think about how they solve all of their people challenges, from hiring to thinking about how the organizations are set up to how to manage the annual performance review process.

I started my work back in 2015–16; that was when I first connected with Byron. We were looking at how organizations do executive selection, and someone connected me with Byron believing he’d have a perspective on the topic, which he did. And then, a few years later, we started thinking about how those practices scale across an organization.

Consider the thousands of hires that many companies make every year and how they think about that process. The thing I heard a lot about was this concern about a skills gap—that there simply weren’t enough skilled workers, especially when it came to technology skills, and that this was the real problem. But I knew from my own experience that it was not the only problem.

And honestly, it’s a question of whether or not it’s the real problem. I came across an article Byron had written that talked about how we think of jobs as low skilled because they’re low wage, and how that’s not really what’s going on, that there’s a whole set of people in the economy who are just overlooked and their skills aren’t counted.

That article really resonated with me because it was consistent with my own experience and the experience of a lot of people I’ve worked with. I didn’t finish college. I worked my way up to the role I have now, but I had lots of moments in my career where I didn’t even bother applying to jobs because I knew they would be looking for that four-year degree, and I knew I would get screened out automatically, so I often never bothered applying to a lot of the jobs I was interested in.

When I saw Byron’s article and what Opportunity@Work was trying to do in terms of changing the way that worked, I knew there was a place for my team and my corner of McKinsey to help and to think about, “How do we change that at scale? How do we think about the way technology and AI are helping to screen resumes and helping to match skilled workers to the most important jobs in different organizations? How could we do that in a better way that wouldn’t, by default, screen out such a large portion of the population?”

Darius Bates: That makes a ton of sense. I think a little bit of where you’re going begs us to ask the question, Byron, you can hit on this a bit more: Could you summarize what Opportunity@Work is doing to address the problem you’ve eloquently outlined?

Byron Auguste: I think if you dig into the structure of the way hiring works and the signaling involved, the fact of the matter is that there are 70 million American STARs who are skilled through alternative routes and don’t have bachelor’s degrees. These individuals are typically screened out before the skills assessments stage.

In other words, you screen out half of the skilled workforce and then claim you’re looking for skills. Consequently, you don’t get enough skills. Regarding solutions, if it were trivially easy to change, companies would have done so. It is not easy.

When we talk about our solutions, we should map them to the problem. First, there are widespread degree requirements, especially since the start of the pandemic. In the ten years prior, about 70 percent of new jobs typically required a bachelor’s degree for an applicant’s skills to be assessed. The first solution is to remove those barriers. This may sound simple, but it is not because big companies can’t just wake up one morning and decide to change. They have to work through all the systems, comparable pay, and other related aspects.

That’s work, but it’s work companies should be doing, and we can help them with it. Our partners can too. The real challenge begins when you stop screening people out due to a lack of pedigree, which you should. The next question is, on what basis do you screen people in for relevant skills?

This is where the work gets interesting. You should have a STARs strategy, a sourcing strategy, and an alternative-route strategy, just like you might have a campus-recruiting strategy. If STARs make up half the skilled workforce and you don’t have a STARs talent strategy, you don’t have a talent strategy. We and our partners in the Tear the Paper Ceiling campaign can help companies develop their own talent strategies.

Our role is not so much that of a consultant. There are many consulting firms out there, but for us, it starts with data. The first piece of important data is the skills that people acquire on the job. Everyone knows that people gain most of their relevant skills on the job.

However, these skills often don’t count, especially for those without bachelor’s degrees. We help gather data on STARs talent. This is part of the work we’ve done with McKinsey. We help companies visualize this data and demonstrate that having a top STARs talent strategy can lead to success. Finally, we emphasize the importance of doing this work not just intentionally but collaboratively.

There is significant benefit in having many companies in a region working together because it creates a broad talent pool. Even if someone doesn’t get hired by one company, they might get hired by another. For example, they might not get a job as a software developer but could find a position in quality assurance, a role they might not have considered. It works best when done collectively and purposefully, with Opportunity@Work serving as a utility to help both the private and public sectors solve this problem.

Darius Bates: I think it’s great that you’re employing multiple strategies to achieve your goals. When I first heard about Opportunity@Work, I was impressed by the logic behind it. It makes perfect sense. Clearly, we’re missing out if we continue to select talent the way we always have. From my experience with transformation work, I know that the details of execution are crucial. How do you actually implement this once people agree that hiring STARs is beneficial? Your efforts have certainly helped more people recognize the importance of this approach.

Darius Bates: Opportunity@Work, as you’ve described, focuses on helping those with skills gain access to opportunities they might otherwise miss. Can you talk about why this matters in the context of action 9, where we’re trying to support organizations uplifting the Black community?

Byron Auguste: As you said, Darius, this is a challenge for half of Americans, not just Black people, though it disproportionately affects Black people. Excluding people based on the lack of a college degree is damaging. A college degree indicates effort and financial capacity, but it doesn’t account for the many who don’t complete college due to responsibilities like family care and full-time work.

Many people don’t finish college not because they’re irresponsible but because they are responsible—they have families and jobs that don’t align with class schedules. This often results in taking seven years to complete a degree instead of four, with funds running out halfway through. This situation affects millions, especially Black STARs, who have some college education but are in lower-paying jobs.

They are behind financially and would love to complete their degrees but can’t afford to. However, they could earn more if they had jobs that matched their skills. Addressing this involves advocacy on policy issues, but ultimately, letting people work in jobs that reflect their skills is crucial. If you can do the job, you should get the job. This can significantly benefit Black Americans economically.

For perspective, there are about 5.5 million Black college graduates in the workforce and close to 11 million Black STARs. More than half of these Black STARs have the skills for jobs that pay 50 to 70 percent more than their current jobs. This means about six million people are underemployed. If we consider both Black college graduates and these six million Black STARs, we’ve doubled the Black talent pool for middle- and high-wage jobs, which companies are looking to fill.

This is a win for companies and critically important for the Black community to build higher earnings and generational wealth. College alone won’t get us there.

Darius Bates: That really resonates. In the States, it’s often not the first generation that sees the most success but rather a foundational generation that prepares the way. For a parent to significantly increase their income and invest more in their children’s futures can have a transformational impact on the family unit and, by extension, the entire community.

Supporting organizations and STARs

Darius Bates: There’s a lot of overlap between what we aim to support and what Opportunity@Work is pursuing. That’s why I, like Caroline, was excited to collaborate with you. Could you elaborate on the challenges organizations face when trying to adopt these approaches? Where do they typically struggle?

Byron Auguste: Carolyn may have insights on this too, but I’d say the hardest part is getting started. Many companies are on autopilot with degree requirements in job descriptions. This is embedded in their workflows and systems. Our view at Opportunity@Work is that while changing mindsets and creating intention are important, it’s also crucial to find simple ways for companies to change their practices.

For example, start with a specific department if you’re not ready to overhaul the entire company. Target areas where there are many STARs with the necessary skills. Ensure you have passionate leadership in these areas because the first attempt is always the hardest. Align your approach with your company’s natural flow. If your company does a lot of campus hiring, consider [tech training] programs like Merit America or Per Scholas. If your company is comfortable with assessments, offer those same assessments to STARs.

Most companies don’t just hand out jobs based on degrees—they assess skills. Use the same skills assessments for STARs. These are examples of how to simplify the process and get started. Working in a coalition like the Tear the Paper Ceiling allows you to learn from other companies’ successes. Start with something familiar, ensure you have real leadership and champions, and target areas with many STARs. This increases your chances of success.

Darius Bates: Got it. Carolyn, does this align with your experience in supporting clients looking to adopt approaches from Opportunity@Work or similar to what Byron described?

Carolyn Pierce: Yes, challenging the defaults is crucial. When I started discussing this with organizations five or six years ago, there was more resistance to opening up hiring to nondegree holders. Now the challenge is more about inertia—reposting job descriptions with degree requirements out of habit. On my own team, we removed degree requirements, but a new recruiter reverted to the old defaults. It’s something we had to stay on top of.

Most of our work has focused on alternatives to degree screens, using all available data to demonstrate that someone who learned their skills in the military, for example, has the necessary competencies even without a four-year degree. How do we show employers that the skills are what matter?

Byron Auguste: Education is part of this. Carolyn’s example of the new recruiter reverting to degree screens shows the need for ongoing education. Our STARs Public Sector Hub works with public agencies, states, and academics [to address these challenges].

A survey of managers revealed that many overestimate the percentage of people with bachelor’s degrees. Managers who overestimate this are less likely to hire STARs or invest in their development. There is a widespread misconception that having a bachelor’s degree is mainstream and not having one is remedial.

That’s not to say that median workers in this country are STARs. The experience they gain on the job is the most significant experience and the most important element they have. So there is some educating to do, ironically enough, of people who think this is the best way of doing it but don’t even have the basic facts.

Darius Bates: I hear you loud and clear on that. And combining what you shared with where Carolyn was going, it really drives home the point that the decision to shift to a more welcoming approach for STARs needs to be made at senior levels of the organization. It’s real work to rewire the ways of working and to do it consistently right, to maintain your commitment so that you don’t have someone coming in and then saying, “Wait, why are we doing this? This is harder. Let’s go back to what we used to do.”

This makes me think about the question we face when looking for talent: Do you want to find the person with the right credentials on paper, or do you want to tap into the full market of folks who could really thrive in the role? If you answer yes to tapping into the full market, then it seems like a commitment to change is necessary, despite the need to do things differently over time.

Darius Bates: You’ve mentioned the Tear the Paper Ceiling campaign a couple of times. Just for our listeners, can you share a little more about what that campaign is and its impact to date?

Byron Auguste: The Tear the Paper Ceiling campaign is a narrative campaign that you can see across all media, including television, the internet, and in-store displays. It has had about four billion impressions already and continues to grow. The campaign encourages people to recognize the talent they might be missing. It features STARs talking about the work they do and the impact they have. It has been wildly successful and continues to grow.

But it’s also a coalition. We now have almost 70 members, including companies of all kinds, top talent platforms, job search platforms, and some of the leading nonprofits in the talent and learning spaces. This coalition aims to tap into the other half of the skilled talent pool—Americans who are skilled through alternative routes. The coalition aspect, of which McKinsey is a member, and the work we’re doing together with McKinsey is under this umbrella. It’s not just for Opportunity@Work; it’s to create tools, methods, and learnings so that this approach can spread to the entire labor market. TearThePaperCeiling.org is a place you can visit. We get about 150,000 visits a month from people and businesses asking how they can hire STARs and what they can do. It provides access to a whole set of tools. This is a great example of solving this problem together and with purpose. Connecting the signals of STARs skills through the mainstream software that companies use for hiring is a very powerful aspect of change, and that’s some of the work going on within the paper ceiling.

Understanding network effects and outcomes

Darius Bates: You mentioned in a prior conversation that it gets easier to support approaches that welcome STARs as more organizations adopt certain practices. Can you elaborate on why that is? What are the network effects that reduce the incremental work per organization as more get on board?

Byron Auguste: Most of my career in business was in the tech field, particularly with emerging business models that benefited from network effects. By network effect, I mean that the more participants there are, the lower the cost and the better the system works. This isn’t always the case; sometimes, an incremental participant pulls resources away from others. But in a network effect, it’s better if there are more parties, especially if the parties aren’t all alike.

For example, you have very big companies, the top-of-the-food-chain companies, where thousands of people apply for their 50 jobs. Then you have small businesses where most people are employed, and where most STARs get their opportunities. These small businesses often don’t have the same way of getting the message out that they’re open for business. If you have big businesses and small businesses together, it can create a synergy.

For instance, someone might think they can get a software development job at a big tech company. If they can’t, they might find a similar role at an insurance company or a supplier to that company. Maybe they’ll be hired as a SaaS [software-as-a-service] administrator, a job they didn’t even know existed. Many people say, “I know what I can do, but no one will give me a chance.” If the only shot they have is an exact company at an exact time for an exact role, they are less likely to succeed. But if they can show up and demonstrate their skills, more opportunities will open up.

Small businesses benefit tremendously from the attraction power of bigger, well-known businesses, and vice versa. This kind of synergy and marketplace dynamic is what we’re aiming for. The Denver metro region does this well, partly by intention and partly by happenstance. What if we did that on purpose and developed the visualization tools and software to allow every region and industry to do that? That’s what we’re doing. We want to make it possible for any part of our economy to say, “This is the right way to do it. We want to be part of it.” The Tear the Paper Ceiling coalition is there to support them.

Darius Bates: I like that. And if I restate it in my own words, you’re saying we need more seats on the bus, and they need to be more diverse to increase the chance that everyone can sit down. This proposal is a transformational change in the way we think about selection. Driving transformational change in organizations requires momentum. Folks need to see things clicking in the right direction to reach escape velocity. This speaks to what you’re describing about the network. If we get folks to go in together and see some traction, it can accelerate from there.

Carolyn Pierce: Another improvement when more organizations drop the degree screen is the way people accumulate skills over multiple jobs. Our research focuses on gateway jobs—the jobs that help someone move from a low-paying job to a high-paying job. These corporate jobs are key. If we break that rung on the career ladder for approximately 60 million Americans by not allowing them to be considered for those jobs, we lose the skill growth that happens when they’re in the door. It’s not just a bad experience for the individual; it breaks the way skill growth works over a career.

Byron Auguste: I agree. When I was in the White House working on the National Economic Council, companies often said their sweet spot for hiring was three to five years of experience, but they couldn’t find anyone with that experience. The way someone gets three to five years of experience is by being hired with zero years of experience. If everyone is looking for the same thing, no one will get what they need. We know this approach works because it’s already working. There are millions of STARs in high-wage jobs today. Many were in jobs where companies wouldn’t have considered them before. If you exclude people based on degrees, you’ll miss out on talent already proving their worth.

Darius Bates: That makes sense. The evidence is already there. As we make this a more prevalent approach, how do we ensure equity among the network of STARs? Action 9 focuses on empowering Black communities. There are many Black STARs, but they aren’t the only STARs. How do you ensure Black STARs have equivalent outcomes as non-Black STARs as more organizations adopt this approach?

Byron Auguste: We always start with data. Wishes are great, but data shows us where we are and what could work. There is concern that saying, “STARs without degrees can do these jobs” implies that people shouldn’t pursue higher education. Education is crucial, especially in the Black community. We’re not saying higher education isn’t valuable. We’re saying if you have the skills, you should get the job.

A higher percentage of Black workers are STARs, yet they’re more excluded than White STARs. Black STARs are only half as likely to get promotions as White STARs, and women STARs face similar disparities. To improve equity, it’s essential to recognize skills across all backgrounds. More than half of Black STARs have the skills for higher-paying jobs. This compares to five and a half million Black college graduates. If you see Black college graduates as talent, you should also recognize Black STARs, doubling the Black talent pool. Excluding Black STARs creates competitors, as some become CEOs of their own companies.

Darius Bates: I see. So it’s about expanding the front end of the funnel. Old practices inadvertently exclude great talent. Everything you’re saying is inspirational. How is McKinsey involved in supporting Opportunity@Work? How do you see the impact, especially looking forward?

Carolyn Pierce: We’ve focused on practical alternatives for organizations. We started with research on how people build skills, STARs or not, and what we can learn from that. We’ve built practical tools as alternatives to degree screens so organizations can find the talent they need. Now we’re building an API [application programming interface] to share Opportunity@Work’s research and data more widely. We’re excited about creating solutions that scale massively. This is why I’ve been so excited about the paper ceiling work.

Byron Auguste: It’s crucial that our tools are rooted in data and can use dynamic data. We need up-to-date views with geographic specificity. But we also need to move from awareness to action. Workforce planning, understanding talent pools, and seeing market-level data are essential. Collaborations in markets can show gaps and allow quick learning. Our goal is for the inclusion mode to be as easy as current hiring practices. We believe doing this work together and on purpose is powerful. It’s change management, not magic. It’s the work companies should be doing.

Looking to the future and a call to action

Darius Bates: What’s the aspiration for Opportunity@Work in the next ten years? Paint a picture of success.

Byron Auguste: Our goal is to have a million STARs hired into higher-wage jobs they can do with their current skills, resulting in $20 billion a year in benefits for companies as a result. Opportunity@Work aims to drive systemic change and does not intend to exist indefinitely as an organization. We want to solve the problem collaboratively with our network, purposefully. We encourage everyone who supports this change to join us, as it benefits everyone, and everyone can contribute.

Darius Bates: Following up on your point about not wanting Opportunity@Work to live forever, how do you think organizations will use this to influence their hiring methodologies? Will this align with Opportunity@Work’s goals, or could it become a hindrance? How are you processing this?

Byron Auguste: Predicting the future is tricky because it depends on our actions today. The best way to predict the future is to shape it, especially with generative AI, which amplifies our intentions. If we use it to include people based on their skills, it can be transformative. For example, we have a massive STARs mobility data model with 140 million job transitions. We currently present it with a drop-down menu of the 30 most common jobs, but there are hundreds of other jobs. Generative AI can help us make this data more accessible and intuitive.

We are part of Google’s generative AI accelerator for nonprofits, receiving real investment based on our progress. This is not just for us but for our partners and the country to tap into this data intentionally for inclusion based on skills. Generative AI can simplify the complex world of credentials and skills signals, making it more intuitive. I am optimistic about using generative AI to solve these problems for those who genuinely want to address them.

Darius Bates: It’s crucial to highlight the problem statement now, as generative AI will amplify intention. There’s a risk that organizations may unintentionally exclude certain talent pools by relying on AI tools, leading to more exclusionary practices.

Byron Auguste: Exactly. AI operates beneath the hood, and if you don’t understand it, you get what you get. Companies need a reliable place to plug in their questions and get answers based on effective skills screening, not just pedigree. Opportunity@Work aims to be that place, leveraging our data and our partners’ resources to provide accessible and intentional inclusion based on skills.

Recently, someone turned our STARs hiring playbook into a chatbot in just 90 minutes, allowing users to ask questions in any way that makes sense to them. This is the power of generative AI, amplifying intention. Companies must decide their intentions now; otherwise, they’ll unintentionally amplify existing biases.

Darius Bates: Given the potential of these tools, what call to action would you give to corporations and nonprofits?

Carolyn Pierce: Organizations should reflect on their experiences with advanced analytics over the past decade and apply these lessons to the rapid advancements in generative AI. It’s not just about the systems we build but also about the systems provided by major vendors. Companies must align their actions with their stated values. If you value skills but only hire based on profiles, AI will learn and perpetuate that discrepancy. Organizations must ask vendors the right questions and set clear expectations for models to balance performance and inclusivity.

Byron Auguste: Absolutely. The complementarity between generative AI and human skills lies in understanding the problem and the human need. AI can help fill skills gaps, allowing companies to develop their people more effectively. Companies that prioritize developing their employees and expanding their talent pool will succeed. Leveraging AI for skills development and talent acquisition can create a more equitable environment where efforts lead to consistent progress, benefiting everyone.

Darius Bates: Thank you, Byron and Carolyn, for this inspiring and insightful conversation. For our listeners, we look forward to your return for more discussions on advancing communities and the importance of Opportunity@Work. Check out McKinsey’s website for more on our initiatives. Once again, I’m Darius Bates, and this has been the Action 9 Fireside Chat series. See you soon.

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