Corporate America Is Rewriting Higher Ed’s Talent Contract

At some point this year, a CEO will have to acknowledge, before the board, what many companies and shareholders already understand: no business strategy can outperform the talent system required to execute it.

The company may have capital. It may have technology. It may have customers. It may even have a compelling AI strategy. But if it cannot find, develop and retain the people required to execute that strategy, then the rest of the plan becomes theoretical.

I hear some version of this concern in nearly every serious conversation with boards, CEOs and senior executives. Recently, in a discussion with hedge fund executives, the conversation moved quickly from market volatility and artificial intelligence to a more fundamental question: where will the next generation of high-judgment talent come from? The concern was not simply whether companies could hire enough people. It was whether the traditional systems built to prepare people still work fast enough, clearly enough and credibly enough for the economy now taking shape.

That is why, alongside AI, growth, geopolitical risk and economic uncertainty, talent has become one of the top five issues in corporate boardrooms. The World Economic Forum’s Future of Jobs Report 2025 found that skills gaps are considered the biggest barrier to business transformation, with 63% of employers identifying them as a major obstacle.

For decades, higher education was the presumed answer. Colleges and universities developed talent. Employers hired from that pipeline. Students and families absorbed the cost because the degree reliably signaled future value.

That contract is now under pressure.

That pressure is now being intensified by Washington. The Department of Education is moving toward a more aggressive accountability framework that will judge programs more directly by cost, earnings and student outcomes. But the federal push is only the urgent trigger. The deeper story is already unfolding in the market: Corporate America is setting the value standard, and students and families are demanding clearer evidence that education leads to opportunity.

These forces are not separate. They are converging into a new accountability environment.

Together, these pressures create three tests higher education can no longer avoid.

The Three Tests Higher Education Now Faces
The old talent contract rested on trust. The new one will be judged by evidence across three fronts.

The first is the regulatory test. Can colleges produce program-level data, earnings outcomes, cost transparency and a defensible account of value before policymakers, accreditors, trustees and governing boards?

The second is the market test. Can employers see evidence that graduates have the skills, judgment, AI fluency, adaptability and speed to productivity required in the modern economy?

The third is the public trust test. Can students and families understand what they are paying for, what outcomes are likely to follow and whether the degree remains a rational investment?

Public trust has not disappeared, but it has become conditional. Gallup found that confidence in higher education rose to 42% in 2025, up from recent lows of 36% in 2023 and 2024. That modest recovery should not comfort university leaders. It should warn them that trust is now something institutions must keep earning.

Higher education does not have to surrender its mission to pass those tests. But it does have to stop assuming that mission alone will answer them.

The Market Is Already Grading Higher Education
The most important higher education accountability system may not be written first in Washington. It may already be operating inside corporate talent budgets.

Consider Amazon. Beginning in 2019, the company committed more than $1.2 billion through 2025 to provide 300,000 employees access to free training programs, including college tuition for front-line workers. Amazon has also said Career Choice can prepay full college tuition and fund high school completion, GEDs and English-language proficiency certifications.

That is not charity. It is talent strategy. When one of the world’s largest employers starts financing pieces of the education-to-work pipeline itself, higher education should read it as a market signal.

Walmart has made a similar move through Live Better U, which covers 100% of tuition and required books for eligible programs. IBM and Google have helped normalize skills-based pathways, employer credentials and alternative routes into technical roles. Other companies are using contractor, project-based and platform-enabled talent to access capability on demand. These are not identical strategies. But together, they point to the same conclusion: Corporate America is no longer treating the traditional degree pipeline as its only source of talent.

None of this means the college degree is dead. That argument is too simplistic. Degrees still matter. Elite institutions still carry powerful signaling value. Many professions still require formal education, licensure and deep academic preparation.

But the automatic market power of the degree has weakened.

As I argued in The College Devaluation Crisis, the problem is not that college has no value. The problem is that too many institutions still expect students, families and employers to accept that value on faith. In a labor market defined by speed, skills, automation and constant disruption, faith is no longer enough.

Corporate America is not waiting for higher education to resolve its own identity crisis. It is buying what works.

The Old Talent Contract Is Breaking
The old bargain between higher education and Corporate America worked because each side trusted the other to do its part.

Universities educated students and conferred credentials. Employers interpreted those credentials as evidence of capability. Students borrowed or paid because the labor market usually rewarded the investment. Families believed the degree was a durable asset. Policymakers subsidized the system because higher education produced public and private returns.

That model still exists, but it no longer operates with the same authority.

Enrollment pressure has exposed the fragility of the pipeline. Public confidence in higher education has weakened. Employers are increasingly skeptical that a degree alone proves readiness. Students are asking whether the cost of college still matches the return. Parents are asking whether the pathway is worth the debt. Boards are asking whether talent pipelines built on yesterday’s assumptions can support tomorrow’s strategy.

Having worked inside corporations and universities — and advised leaders and boards across both — I understand the tension in both rooms.

Academic leaders fear that ROI will reduce education to wages and weaken the broader mission of learning. They are right to worry. Colleges and universities do more than prepare people for their first job. They develop judgment, citizenship, research capacity, leadership, communication, creativity and social mobility.

Corporate leaders, on the other hand, fear that talent scarcity will make even the best strategy impossible to execute. They are facing scarcity now. They need people who can work with AI, solve ambiguous problems, communicate across teams and learn faster than the work changes. They are less interested in institutional tradition than in whether graduates can create value.

Both are right. Both are incomplete. The problem is that the market is not waiting for them to reconcile it.

AI is accelerating the pressure. The more companies deploy AI, the more they need people who can exercise judgment, interpret context, adapt quickly and work across functions. The paradox of the AI economy is that technical capability makes human capability more important, not less.

That is where higher education should have a decisive advantage. Colleges and universities are built to develop judgment, communication, critical thinking, analytical reasoning and adaptive capacity. Those are precisely the capacities companies need.

But higher education has not always translated those strengths into language employers trust.

Washington Is The Urgent Trigger
The Trump administration’s emerging higher education ROI agenda should be understood as an accelerant, not the origin of the problem.

The Department of Education’s proposed Student Tuition and Transparency System and earnings accountability framework would move higher education closer to a program-level ROI regime. The proposal would make institutions and programs accountable for low-earning outcomes across sectors and require colleges to report program-level data on tuition, fees and financial aid. That is not a minor compliance change. It is a signal that higher education is entering a more transparent, outcomes-driven era.

If finalized, the rule would require preparation, not just reaction. Institutions will need cleaner program-level data, stronger employer-alignment narratives, clearer evidence of student outcomes and a more defensible explanation of value. Presidents, provosts and boards should not wait until the first earnings metrics are published to ask whether their programs can withstand public scrutiny.

But colleges should not mistake the federal rule for the beginning of the ROI era. It is the public version of a test the market has already begun.

A federal accountability regime focused on earnings outcomes will intensify pressure on institutions to prove value. It will force uncomfortable questions about programs that leave students with debt but weak labor-market returns. It will also raise legitimate concerns about whether ROI can be defined too narrowly.

That distinction matters. The federal rule may determine compliance. Corporate America will determine relevance.

ROI Must Be Bigger Than Wages
This is not an argument for turning universities into corporate training centers.

Faculty, like me, are right to resist any model that reduces education to short-term wage data or treats students as inputs into a labor market machine. The purpose of higher education, after all, is larger than job placement. It includes intellectual formation, research, citizenship, creativity, ethical judgment and social mobility.

But defending that broader mission now requires clearer evidence of value, not less.

A serious ROI framework should include earnings, but not only earnings. It should include job placement, career mobility, skills alignment, employer satisfaction, speed to productivity, graduate adaptability, research contribution, innovation capacity, leadership formation and civic value.

That broader frame matters because higher education and Corporate America often speak different languages. University leaders talk about access, discovery, citizenship and transformation. Those are real and important. But corporate boards are asking different questions. Are graduates ready to work? Can they solve problems? Can they use AI responsibly? Can they communicate under pressure? Can they lead teams? Can they learn faster than the work changes?

For students and families, this is not an abstract policy debate. It is a tuition bill, a loan balance and a career bet.

If institutions cannot answer these question with evidence, employers will continue to build parallel systems and families will continue to question the investment.

The future does not belong only to the most prestigious institutions. It belongs to institutions that can make learning, work and value visible.

The encouraging news is that the next model is already visible in parts of the sector.

Some schools are already moving in the right direction: community colleges such as Ivy Tech Community College and Dallas College are building employer-aligned pathways in health care, advanced manufacturing, logistics and technology; universities with mature co-op and work-integrated learning models, including Northeastern University and the University of Cincinnati, are making the classroom-to-career transition more explicit; and competency-based programs, including the University of Wisconsin Flexible Option and Purdue Global’s ExcelTrack, are translating learning into measurable skills.

These models are not perfect. But they point toward the next version of higher education: institutions that can defend mission and prove value at the same time.

A New Talent Compact
The answer is not for corporations to bypass higher education, for universities to defend the status quo, or for government to reduce educational value to a wage formula. The answer is a new “Talent Compact”.

Corporate America must stop acting only as a consumer of talent and become a co-producer of it. That means sharing labor-market data, co-designing curriculum, building paid pathways, investing in applied learning and treating higher education partnerships as strategic talent infrastructure rather than philanthropy.

Higher education must stop asking the market to accept its value on faith. Colleges and universities should publish clearer outcomes, translate learning into skills employers can understand, embed work-based learning more deeply and prove that graduates can think, communicate, adapt and create value in an AI-enabled economy.

Government should raise the floor for transparency without shrinking the definition of education. Good policy should expose weak outcomes, protect students and taxpayers, and still recognize that mobility, research, civic formation and regional economic contribution are part of higher education’s return.

The old talent contract assumed trust. The new one will require evidence.

Corporate leaders should not read this as higher education’s problem alone. If companies simply build around colleges and universities, they may solve an immediate hiring problem while weakening the long-term talent ecosystem they cannot afford to weaken or lose.

Washington can create pressure. Employers can create alternatives. Students and families can demand clearer proof of value. But the next talent compact will require corporate leaders and colleges to do something harder together: connect learning, work and opportunity with evidence.

The better strategy is not bypass. It is reinvention.