Traditionally, the value placed on educational qualifications drives millions of students to pursue degrees. Organisations, too, have hired talent based on these qualifications, rather than on the skills they possess.
But how essential is a higher-education degree today? And should employers be focusing more on a person’s work and life skills as a better indication of their ability?
Research has found 90% of job ads in technology, healthcare and business management required a degree - despite many of the roles being possible for those without an advanced qualification. Given that research is also finding that educational attainment doesn’t necessarily equal ability, this approach could be restricting the organisation’s talent pool significantly.
Are skills a better predictor of success than degrees?
In APAC, there are high-profile examples of people who’ve paved the way without traditional qualifications.
Hong Kong’s Li Ka-Shing left school at age 12 and is now worth more than $US30 billion meanwhile China’s Zhou Qunfei dropped out at 16, and she is worth $US7.9 billion. Similarly, Australia’s Scott Farquhar and Mike Cannon-Brookes left university to found Atlassian together, while Janine Allis didn’t need a degree to start Boost Juice, now worth $A200 million with franchises around the world.
While these may be outliers, around the world there is a move to look beyond official qualifications and more to the skills talent could bring to the organisation.
In fact, since 2019 LinkedIn Talent Solutions data recorded that the share of managers hired without a four-year degree jumped 20%. But APAC lagged this trend, recording only 3% growth over the same period.
Further, to keep pace with business demands, continuous skilling is critical. And hence, qualifications are just not enough to support the pace of change. Organizations need to sharpen their focus on hiring for skills and embed continuous skilling as a part of an employee’s growth journey.
Manpreet Singh Ahuja, Chief Digital Officer at PwC India, shares, “ It is the culture of reimagining the possible that makes us lead in what we do. We are a community of solvers– combining human ingenuity, experience, and technology innovation to help deliver impact to our clients. While hiring the right skills is important, the skill set requirement itself is dynamic. As our people move from one assignment to another, the demand for skills beyond the domain keeps evolving, and hence it is the skill of learning that becomes most important. We have a learning environment that is supported by a platform and an ecosystem that enables citizen-led innovation.”
Skills-based hiring for stronger retention and more diversity
Hiring for skills appears to foster stronger loyalty and retention among talent. LinkedIn found that on average, non-graduates spend 34% more time with an organisation compared to graduates. In Australia, non-graduates will spend 51% longer, compared to their graduate colleagues. Likewise in New Zealand it’s 56%, Hong Kong is 40% and China is 26%.
Aside from degree-holding talent being more likely to change jobs quickly, evidence also suggests that filling roles based on four-year degrees takes longer, Meanwhile, degree holders can command an 11 to 30% wage premium, yet that doesn’t appear to materialise in greater productivity.
Organisations serious about diversity should also consider that qualification-focused hiring can actually prevent good talent, from a range of backgrounds, from even considering applying. Looking past educational backgrounds can help identify candidates from underrepresented backgrounds and drive diversity efforts. Candidates may have chosen to bypass the university route but may nonetheless bring a great deal of natural talent to a role.
With workforce diversity being a priority in 61% of companies in APAC, focusing on the skills, rather than the qualifications, candidates can bring to the table, is a way organisations can level the playing field and create equal opportunities.
“Our hiring philosophy has helped us greatly with retention. We introduced a formal internal job policy a few years back, over the last couple of years, we have made it more structured and enabled all employees to have healthy career conversations with their managers. We have seen healthy cross-functional movements– from marketing to customer support, from engineering to presales, from sales to customer success, and so on. In this year alone, we have had more than 100 positions (~8%) filled with internal candidates. We definitely see this number trend upwards further and does have an impact on retention,” shares Divya Balraj, Director Talent Acquisition at Freshworks
Ramping up your internal mobility success
Skills-focused hiring doesn’t just need to focus on external hires, either. Developing internal mobility that creates equal opportunities for employees regardless of the background can also tap into new internal talent pools.
LinkedIn’s Future of Talent report¹ found that 86% of companies surveyed in APAC are making an effort to fill roles internally and 66% are providing upskilling or reskilling opportunities. Filling roles internally are taken based on criteria such as the need for an insider’s perspective (65%), providing employees with a sense of progression (65%) and encouraging loyalty (56%).
COVID-19 also opened many organisation’s eyes to how talent’s skills could transfer across the business. ANZ’s experience saw branch staff help meet demand in call centres, and create a raft of new opportunities through internal mobility.
Highlighting the importance of talent mobility, Rohini Seth, Chief of Human Resources at Jubilant Group, shares, “VUCA has only magnified during the pandemic. Organizations are now required to demonstrate digital agility while thriving in this VUCA environment and therefore skill proficiency of the workforce comes into the spotlight. The pandemic has given us an opportunity to look at internal talent mobility as skills that help drive agility vs the conventional notion of talent mobility. We as the Jubilant Group are focussing on building agility by upskilling our digital skills that help shape transformation while approaching work in a more and more location-agnostic/hybrid model. Our focus sharply moves to outcome-based performance management and agility, adaptability, and resilience of talent.”
COVID-19 has brought lasting changes to the talent landscape. Across Asia-Pacific organisations have had to pivot to meet new demands and talent needed to adopt new skills to stay ahead.
The disruption has created an unprecedented challenge for HR teams, but understanding how it is reshaping our world of work can help you build resilience and anticipate future demands on your talent pipelines.
Download the infographic and learn how LinkedIn’s tools can help you identify critical skills and promote internal mobility to navigate this changing talent landscape and prepare your workforce for the jobs of the future.