Article: Are we inflating our wage costs?

Talent Acquisition

Are we inflating our wage costs?

Companies are doing away with using degrees as metrics for capability assessment. Find out how companies will navigate in this changed environment
Are we inflating our wage costs?
 

Let us imagine this world without any ceilings or boundaries of college grades, and then we are looking at a hiring framework which specifically measures candidate’s knowledge, abilities, skills and personal characteristics which are particularly fit for that role.

 

Degrees and good grades have long been proxies for the kind of cognitive skills required for jobs in knowledge industries. Degree classifications are used widely to identify the most highly achieving students. It’s clearly there for a reason, or so it seems.

Ernst and Young, a top UK accounting firm which recruits 400 graduates each year, believes otherwise. It announced recently that it was removing degree classifications from its entrance criteria in place of numerical tests and online ‘strength’ assessments. This measure was undertaken based on the results of a study they conducted where they could not find any evidence to support that previous success in higher education correlated with future success in subsequent job roles. Indeed, the initiative has resulted in a 30% increase in terms of diversity of representation of job applicants. This stance is supported by PwC, having scrapped *UCAS scores as an entry requirement; it has received its highest ever number of graduate applications this year – 41,000 compared to 35,600 in 2014. CapGemini too has now decided that it will hire future consultants’ right out of secondary school, thus increasing its talent pool to choose hires.

This kind of transformation of the recruitment process would mean couple of things; first the access to the widest and deepest possible talent pools and second is the hiring based on potential and job requirements. Especially for India, removing the degree classification requirement would open doors to hundreds and thousands of students who were earlier not eligible to apply.

Even from the applicants’ perspective, this system will create an environment with equal opportunities for everyone including those from disadvantaged backgrounds who couldn’t pursue higher education. Let us imagine this world without any ceilings or boundaries of college grades, and then we are looking at a hiring framework which specifically measures candidate’s knowledge, abilities, skills and personal characteristics which are particularly fit for that role. In such a circumstance, the organization primarily pays for capability of the candidate and not for the educational degree of the candidate thereby decreasing the wage cost considerably.

So how does this boundary less world operate when not getting blinded by CVs:

1. CV won’t be taken at a face value: CVs are an applicant's marketing pitch and are often embellished. It is nearly impossible to determine potential when everyone only promotes whatever is required for a particular position.

2. Every Job will have defined capability specifications for its fitment: Defining the competencies required to perform the job successfully would form the basis of a candidate’s assessment.

3. Cultural Fitment will be a key to find the right candidate: Assessing the candidate’s personality to see their fitment into company’s culture would be important since it would impact his potential and performance.

To stop hiring from top and elite schools would ask for some mindset change for the firms in India. But seeing how the world’s top firms like PwC and Ernst & Young have paved the way to this transformed way of hiring; one can expect others to see how this brings huge opportunities to harness untapped talent and reducing wage costs.      

*UCAS points or UCAS Tariff is a means of differentiating students based upon their grades from various post-GCSE qualifications and is used as a means of giving students from the UK and Ireland places at UK universities.  

 

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Topics: Talent Acquisition, #HRIndustry

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