Paradigm Shift from degree-based hiring to skills-based recruitment

Go to school, pay attention to your grades, earn a degree, and find a good job.

This has long been the wisdom that has been accepted and hard-wired into our heads and somehow this plan has worked up until now.

Degrees have actually played a major role in securing jobs. But the times are changing. The world around us seems to be changing at a never-seen-before pace.

According to a recent NASSCOM survey, more than 50-60% of Indian professionals will need continual upgradation of their skills to keep up with the changing business environment.

What was relevant a decade ago, doesn’t even exist today. Organisations seem to be investing more in hiring ambitious talent who possess skills that have the ability to power growth and bring in new dimensions of thinking that would be fruitful in the long run.

This move has been highlighted by two connected LinkedIn trends that are a result of the survey carried out after taking into account all the jobs listed on the platform between 2019-2021. (Source)

• The number of jobs that did not require a degree went up by 40%
• On the other hand, the number of jobs that listed skills and responsibilities as the primary requirement for a job went up by 21%

Both these stats open up an entirely different avenue of hiring. An avenue that values skills more than degrees. An avenue that is being increasingly taken up by a lot of MNCs and top-tier companies across the world.

Proof of this paradigm shift

• Major corporations like Boeing, Walmart, and IBM have joined the Rework America Alliance, have worked with other organisations to assist workers in moving from lower-paying jobs to higher-paying ones, and have removed degree requirements from some job postings.
  
• Recently SAP got done with university requirements from its placement process by announcing its commitment to upskilling 2 million developers by 2025 at the TechEd conference this week, through entry-level certifications with Coursera. Recently, during SAP’s Business Innovation Days in San Francisco, Max Wessel, chief learning officer at SAP stated:

“As the talent landscape evolves, traditional education such as university degrees are losing relevance”

• Not only the private sector is interested in skills-based practices. The state of Maryland announced in May 2022 that it would no longer require degrees for nearly half of its positions, opening thousands of positions in the fields of healthcare, corrections, law enforcement, skilled trades, and engineering to a larger applicant pool.
  
• Ryan Roslansky, LinkedIn CEO, in his article “Skills are the new currency” published on March 29, 2022, quoted:

“We spend a lot of time thinking about how best to navigate this new world of work. And it’s become increasingly clear that the best way forward – for individuals, businesses, economies and societies – is a skills-first mindset. Recent LinkedIn data shows that the skills sets for jobs have changed by around 25% since 2015. By 2027, this number is expected to double. That means jobs are changing on you even if you aren’t changing jobs, just as business demands are changing on you even if you’re not changing your business.”

• Even the World Economic Forum emphasised the increasing importance of skills in their recent article "What next for higher education? Here's an alternate learning model for the future" published on Nov. 17, 2022.

“Second, we do not believe that education ends with graduation in the 20th century; we believe that students will continue to accumulate knowledge and skills throughout their lives by enrolling for credentials online while they are working.”

Skills-based Hiring: The next big thing in recruitment

Finding the best candidates for critical open positions and then retaining the talent they hire has proven to be difficult. This has resulted in employers making the move towards adopting practices for hiring people based on their skills.

This is where a skills-based approach to hiring comes into the equation and mitigates major flaws in the hiring process.

Following are the valuable attributes of a skills-based approach towards recruitment that have the apple of the eye of recruiters.

A Win-Win Situation

A skills-based hiring approach creates a win-win scenario for the recruiter as well as the candidate. Without a degree, potential workers who were previously passed over can now pursue lucrative career paths based solely on their skills.

With a skills-based approach towards hiring, recruiters have the luxury of reduced training time since the people hired already have the foundational knowledge sorted, which makes it easier for them to plug themselves in and start contributing from day one.

Low Attrition Rate and Self-Sufficiency

In the long term, people hired using a skill-based hiring process are more likely to work for companies for a longer period of time. According to a study in the Harvard Business Review, employees who did not complete a traditional four-year degree remained with their employers 34% longer than those who did.

In contrast to candidates with degrees, those without one, are just as capable of learning the ins and outs of the various job duties of their peers or even their superiors.

This strengthens the company from within and moves them towards a state of self-sufficiency.

Well-equipped workforce

By taking up a skills-based approach, employers can put up a workforce resilient enough to see them through tough times which can potentially mean better, more stable jobs for the recruits.

Moreover, it would simplify the process for employers to bridge the skills gap to the next role using this strategy.

This allows them to spot any overlaps or gaps in skills between lower-level and higher-level positions and develop training and transition strategies to help employees advance within the company.

(Here's an article that talks about good skill-based hiring practices that can help companies make better decisions)

Why is there this shift?

As we can see from the examples above the paradigm of hiring candidates has actually started shifting in favour of skills.

What has caused this paradigm shift?

One strong reason for this shift is the shortcomings of degrees. Hiring decisions based on degrees effectively overlook a sizable portion of applicants, which is not always a good thing.

Thus when candidates are seen solely through the lens of skills, a lot of their good qualities and degrees get a cold shoulder treatment.

Because of this, there is a growing belief that a college education is not a prerequisite for obtaining a good job or that a degree graduate will always find the best job and be easily hired for it. It's becoming more and more important to take qualifications other than just having a diploma into consideration as more people on both sides of the interview table arrive at this conclusion.

This new development does not imply that a college degree is not valuable; rather, it indicates that enforcing a degree requirement may prevent a company from hiring someone who would otherwise be capable and dedicated. Today's prospective employee, however, has a variety of additional resources at their disposal to develop the skills required for their ideal position.

Why do we see a wave of changing requirements in recruiting?

This latest reset occurred in two rounds, both still ongoing. The initial one was a structural reset, which occurred in 2017 at the start of the 2017-2019 labour bull market. The subsequent one was a cyclical reset which occurred in 2020 in part due to COVID-19. Let's take a look at each one separately.

Structural Reset

When the requirement for talent exceeds the supply, businesses place less emphasis on degrees. This became particularly clear after the late 2010s competitive labour market. Between 2017-2019, employers dropped degree prerequisites for 31% of the high-skill posts and 46% of the middle-skill posts. Managerial and IT jobs were particularly heavily hit, as they were difficult to obtain at the time.

At the heart of this reset is that businesses are abandoning the application of academic achievement as an indirect indicator for assessing job applications and instead prefer to recruit on a foundation of demonstrated expertise and competencies. This change to skills-based recruitment will provide prospects to a wide group of prospective workers who have previously been overlooked due to degree inflation. (This demographic includes prospective employees referred to as "STARs" and "hidden workers".)

Structural reset, although a promising turn, has miles to go. In a research conducted by Harvard Business Review, about 37% of the job descriptions posted under middle-skill posts showed no change in degree requirements. This implies that over 15.7 million individuals have essentially been shut down from the applicant pool while companies moan furiously about worker shortages.

Cyclical Reset

Numerous organisations were ready, at least briefly, to waive academic prerequisites for numerous positions to recruit qualified candidates during the global outbreak, which became the worst health disaster in modern history. In job listings for critical-care and intensive-care nurses, for instance, the proportion of jobs requiring an undergraduate degree fell by 12% between 2019 and 2020 from 35%-23%.

Graduation specifications for registered nurses decreased by a more modest margin of 5%. This reset was detected in approximately 5,48,000 job advertisements, representing 27% of high- and middle-skill occupations.

The change could be viewed as an interim solution when confronted with a crisis, which is why we think of it as a cyclical one instead of a structural reset. But considering its magnitude, it is bound to inform us quite a bit about whether employees with degrees perform more effectively than those hired without degrees. Previous study indicates that irrespective of certain industries like finance and professional services, performance disparities are frequently minor.

Case studies

Ryan Graves - Ex-Uber CEO, popularly known as Uber’s 1stemployee

On January 6, 2010, Travis Kalanick, the creator of Uber, tweeted about the need for a "product manager/business development killer". Ryan Graves latched onto this opportunity real quick and replied with his email address as a potential candidate for the position.

He subsequently got hired as Uber’s first employee on March 1, 2010.

Ryan would go on to serve as the Uber CEO for a few years after Travis vacated the position. Later he followed suit with Travis who resigned from the company.

Daniel Kmak - Blockchain engineer who landed not one but two jobs before he turned 19 through GitHub

Daniel Kmak is a blockchain engineer at Nervos Networks who used GitHub to attract recruiters and land, not one, but two jobs before the age of 19.

How did he accomplish this? Well, GitHub helped him create leverage that made him stand out in a sea of developers.

With his GitHub profile, he was able to demonstrate to recruiters the length and breadth of his knowledge of various programming languages, which ultimately led to his hiring.

Daniel would have also started out as a tidbits coder, but with the passage of time, he was able to become the kind of coder who wrote code that solved real-world problems and GitHub helped him achieve that.

Niraj Pant - General Partner at Polychain who almost made it to Snapchat on the back of his skills

Recently, Niraj Pant, a General Partner at Polychain tweeted the screenshot of an e-mail he had sent to Evan Spiegel, the CEO of Snapchat back in 2014.

Niraj kept this e-mail short and sweet. A short salutation with an empathetic tone preceded the list of relevant skills he possessed.

Surprisingly, Evan replied and he got him in touch with the then-lead recruiter at Snapchat. His skills were just about good enough to get him in front of the recruiters.

All these stories vividly show how companies and candidates alike are starting to realise the true potential of skills in today’s fast-paced economy.

Where is the future headed? (Conclusion)

Doctors, lawyers, and research scientists come to mind as professions that will always require extensive training from higher learning, but moving away from degree-based hiring will ultimately be simpler for everyone involved. Any cost-effective measure that ensures a good hiring fit without sacrificing quality will be eagerly incorporated in a world plagued by economic uncertainties ranging from market volatility to global pandemics.

For those who have the time, opportunity, resources, and desire, a college education is a good thing. However, not everyone possesses those qualities, and businesses are realising that degree-based hiring may be depriving them of qualified applicants. Everyone shouldn't be surprised if hiring is done based on skills because it is a great equaliser.

How does Masai fit into the picture?

Masai has always maintained that skills matter much more than degrees. In fact, it is the founding tenet of the outcome-driven education that our organisation stands for.

The need for tech talent all across the world has grown substantially, but finding top-tier talent has remained a challenging proposition for many tech-based companies.

The curriculum at Masai School has been developed to imbibe the students with the skills necessary to be hired by big tech companies.

In the three years since Masai was founded, we’ve seen a lot of our students enrolling from Tier 2 and Tier 3 towns with only high school diplomas. They come from educational backgrounds that have little to no relation to programming or coding.

With the help of Masai, these students have been able to successfully build their careers in tech, thanks to our "Skills over Degrees" philosophy.

Also, it is worthwhile mentioning that it is not just students but our hiring partners as well who have benefitted from this philosophy.

Don't believe what we say... Read what our hiring partners have to say about our students.

Anirban Majumdar, the CTO, and co-founder of Urban Piper spoke highly about how Masai has set itself apart from colleges by following a pedagogy that ensures the all-round development of its students.

Vamsee Mohan Kamabathula laid emphasis on how Masai graduates exceeded his expectations by performing at a standard that was nothing like anything he had seen earlier.

Harshit Mittal, Co-founder, and CTO of SupplyNote talk about how Masai has been proven to be the best remedy to their hiring headache by enabling them to hire people who know what it takes to build a startup.

Deekshant Jain, Head of Engineering at NoBroker.com has been really impressed by the way Masai students have been able to take up ownership of their job with utmost discipline and commitment.

Traditional methods of employment where degrees are used to dictate hiring decisions are gradually seeing a decline.

Fostering work environments where agile and creative thinking is appreciated, risk-taking is valued, and learning is derived from failures - led by people who possess the ability to lift their teams - we are witnessing the dawn of a new era where skills are taking center stage, and we’re here for it!

FAQs

What are some of the popular courses available at Masai School?

Data Science, Full-Stack Android Development, UI and UX Design, Full-Stack Web Development, and iOS Development are some of the popular courses available at Masai School.

Which top companies offer jobs without degree qualifications?

Many high-profile organisations, such as EY, IBM, Google, and Accenture, have eliminated degree requirements for certain roles and shifted to a skills-based recruitment method to fill these posts. You can get started by looking into Data analytics and Full-stack web development offered at Masai School to conquer the world of software.