Is Asia-Pacific ready to shift to skills-based hiring?

Asia-Pacific (APAC) is home to some of the world’s best universities. Tsinghua University, the National University of Singapore and Australian National University, among others, are internationally recognised as producing graduates that are well-studied in their fields.

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.

As more companies today start to shift towards skills-based hiring, and as more professionals start to take ownership of their own upskilling opportunities, we look at how APAC is tracking against this trend, and how recruiters can tap into the new skills currency.

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 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.

Clearly the shift in the region’s mindset to focus more on talent’s skills, rather than just their qualifications, is ongoing. But why are more organisations globally seeking out skills?

Aside from degree holding talent being more likely to change jobs quickly, evidence also suggests that filling roles based on four-year degrees take 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 APAC¹, 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.

Skills-focused hiring doesn’t just need to focus on external hires, either. Developing internal mobility that creates equal opportunities for employees regardless of 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.

This global trend towards skills has seen EY drop the requirement for degrees in 2015, stating there was no evidence higher education correlated to future success. Penguin Random House followed suit, citing a need to seek hires from more diverse backgrounds. PWC, Apple and Google have also relaxed their hiring requirements.

In fact, a survey conducted by LinkedIn¹ found that 79% of companies in APAC focus on skills and competencies as the focus when hiring, rather than qualifications. Education is the least important criterion in China and Japan with only 7% of organisations in both countries citing education as the most important. On the other hand, significantly more companies in India pay importance to education at 16%.

For organisations keen to jump aboard the skills train, the shift requires a new approach to recruitment, beginning with how jobs are advertised. In the US, LinkedIn data found posts that mention “responsibilities” without mentioning “requirements” earn 14% more applications per view than job posts that mention“requirements” but not “responsibilities”.

When posting a job advert, instead of focusing on qualifications, outline specific abilities needed to perform the job well. This could be handling accounts, coding, writing, good verbal communications or time management.

To pave the way for a skills-first future, we introduced LinkedIn Skills Assessment, a tool to help recruiters and hiring managers easily screen for different technical, business and design skills. The assessment is available for over 80 different skills, and members who complete the test in the top 30% will receive a skills badge on their profile. The badge validates their skill and makes them more discoverable to opportunities.

For learning and development professionals, having an internal upskilling program can help you build a talent pipeline, and invest and grow potential. Online learning platforms such as LinkedIn Learning can support your organisation in developing a robust training program so employees from a broad range of backgrounds can learn the skills they need for success.

For more insights into how LinkedIn can partner with you to identify, hire and build critical skills, download this free infographic.

¹LinkedIn’s Future of Talent report: https://business.linkedin.com/content/dam/me/business/en-us/talent-solutions/resources/pdfs/future-of-talent-whitepaper.pdf