Skills vs degrees: The new currency for the future of work?
In today’s rapidly evolving job market, a significant shift is underway: skills are becoming the new currency. As technology advances and job roles become more specialised, the focus is moving towards the practical abilities of job seekers. So why are skills emerging as the crucial factor in the future of work? For students and professionals alike, this trend underscores the importance of prioritising skill development, whether you’re stepping into your first job or advancing in your career. Embracing and continually learning new skills will be key to staying competitive and relevant in the modern workforce.
Do You Have the Skills Required to Do the Job?
In the past, a degree or certification was often considered the golden ticket to a job. However, as we move towards a more dynamic and inclusive workforce, the focus is increasingly on whether candidates possess the skills necessary to excel in a role, regardless of their formal educational background.
Skills-approach to hiring or learning and development, is when companies prioritise what employees can actually do over traditional proxies like degrees, past job titles, or years of experience. This shift acknowledges that many valuable skills are acquired through various routes—be it hands-on experience, personal projects, or non-traditional educational paths such as TAFE, VET diplomas or microcredentials. And we’re already starting to see top global players like Apple and Google hire without degrees.
The Rise of Skills-Based Hiring
Why the shift? The job market is evolving, and so are hiring practices. Here’s why skills-based hiring is gaining traction:
- Better Fit and Efficiency: Hiring managers who adopt a skills-based approach find it significantly easier to locate qualified candidates. They are more likely to place talent effectively and more likely to retain high performers compared to their peers who rely on traditional methods.
- Expanded Talent Pool: By focusing on skills rather than degrees, employers open up opportunities to a broader, more diverse range of candidates. This includes those who might have gained their skills through alternative means such as military service, caregiving, or self-directed learning.
- Future-Proofing: As the future of work becomes increasingly unpredictable, focusing on adaptable skills—like critical thinking, problem-solving, and digital literacy—prepares both employers and employees for changes that formal education alone may not address.
If you’d like to learn more about how businesses will prioritise new recruitment methods to keep pace with the future of work, please download Indeed’s report, Skillfully Aligned: Closing the gap for a future-proofed workforce.
Degrees vs. Skills: What’s the Real Value?
Degrees and formal qualifications will always have their place, particularly in fields requiring specialised knowledge. However, the growing emphasis on skills reflects a broader trend towards valuing practical ability over traditional educational credentials. In Australia, while post-school qualifications remain important, many job seekers with TAFE, VET diplomas or microcredentials are finding opportunities based on their skills rather than their degrees alone.
Hidden Workers, such as those from less conventional backgrounds, are often overlooked due to rigid qualification requirements. Skills-based approach in companies uncovers these untapped talents, fostering a more inclusive workforce that better represents our diverse communities.
Looking Ahead
As we move forward, the future of work will increasingly hinge on practical skills rather than formal qualifications. For employers, adopting a skills-based hiring approach is not just a trend but a strategic advantage. For job seekers, focusing on acquiring and demonstrating relevant skills will be key to navigating and succeeding in an ever-evolving job market.
Skills-based hiring is not just a shift in practice; it’s a new way of thinking about work and talent. By valuing what candidates can do over where they’ve been, we’re paving the way for a more equitable, efficient, and future-ready workforce.