Look beyond the degree: The benefits of skills-based hiring

There can be great advantages in looking beyond qualifications in hiring. With skills shortages hindering growth for many companies, tapping into unconventional talent pools can help businesses remain competitive.

The Financial Markets Institute of Australia (FMI) encourages organisations to give these concepts a go. Paul Nojin, spokesperson for FMI, explained how many big-name corporations are seeing the benefit of this approach.

“The world has changed. University degrees are no longer a focus for leading employers. They want real-world skills and knowledge instead. They want people who are already well trained, not people they have to train from scratch,” commented Mr Nojin.

One such employer utilising the skills-based hiring approach is Macquarie Group, which said that focusing on ability rather than university degrees can even help to promote diversity in the workplace.

The banking organisation’s chief executive, Shemara Wikramanayake, noted that this shift in hiring structure has allowed for greater diversity. “Our workforce should mirror the communities in which we operate,” she said.

While obtaining a degree may seem like the only way to land high-paying positions, there are many who argue the opposite.

Harvard Business Review (HBR) discussed how, in recent years, “the tables have turned”, and many employers are seeing the merit in looking beyond degrees.

“Now, companies need more workers than workers need jobs. Instead of weeding people out, businesses are tasked with figuring out how to bring new talent in, and removing the college degree requirement has been an effective way to do so,” said HBR.

“Plainly put, not having a college degree should not diminish your chances of securing a good job. This is good news for many young people entering the workforce.”

It may take some time for attitudes to change in Australia, however. According to the Australian Bureau of Statistics’ (ABS) latest education census, 5.5 million people reported having a bachelor’s degree or higher. This was a 30.7 per cent increase from 2016.

Meanwhile, Statista revealed that over the past 20 years, the number of Aussies with a degree at a bachelor’s level or above has increased by more than six times, reaching 50.8 per cent in 2022.

Andrew Norton, Grattan Institute’s higher education program director, discussed the issue with The Sydney Morning Herald, labelling it the “ever-continuing spread of credentialism”.

“There are a number of reasons to become concerned.

“It increases the cost to the student in time and money … as bachelor degrees become more common, employers start saying, ‘I can screen the CVs I’m receiving by just deleting everyone that doesn’t have a particular type of qualification’,” said Mr Norton.

This highlights the immense importance people are placing on degrees. With employers slowly beginning to see the benefit of looking beyond qualifications, perhaps these attitudes could turn around.