Some S’pore employers need to lose their degree obsession & hire based on skills instead

When I was a child, my mother would nag me constantly about getting a university degree.

She had personally seen the impact of not having a degree on her own career. Being a post-war baby, she was able to get into the National Institute of Education (NIE) with her O-level certificate. There she trained to be a teacher, and subsequently had a distinguished career in the education service for more than three decades.

During her decades as a primary school teacher, she personally witnessed how less capable and less experienced junior education officers overtook her in salary and seniority because of their education credentials, namely degrees.

One of her biggest fears for me was that I would not be able to qualify to get into a local university, and consequently would not be able to have a good job and a good life after I joined the workforce.

Today, there are “rising proportions of those aged 25 and above attaining tertiary education qualifications” and “increased job competition” amongst younger workers, a situation noted by Nominated Member of Parliament (NMP) Shahira Abdullah in Parliament in July 2021.

In response to the NMP, the Ministry of Education shared that among Singaporeans aged 25 years and over in 2020, 48 per cent attained diplomas, degrees, and professional qualifications, up from 37 per cent in 2010.

Over the decade, this works out to about 400,000 more Singaporean residents that attained diplomas and degrees since 2010.

This statistic shows that many still see the degree or diploma as the route to a better job, and eventually a better life.

Singapore employers are not helping the situation. As an example, a local construction company created controversy recently when it posted a job advertisement seeking to recruit a driver for its heavy vehicles, requiring a bachelor’s degree, much to the chagrin of netizens.

Given the circumstances, it is absolutely natural for job seekers to chase qualifications, as they seek to improve their chances for better jobs.

This situation will likely continue unabated until employers change the way they select and hire people for their organisations.

The vicious cycle of degree obsession in the U.S.

For a better idea of how degree inflation has a negative impact on the labour market, we can look to the U.S..

Based on data from the U.S., part of the reason for the high demand for degrees stems from hiring companies making degrees a prerequisite for good jobs.

In a recently published technical note from Harvard Business School, Professor Boris Groysberg found in his paper on “Widening the Talent Pipeline” that companies are contributing to the degree obsession.

He illustrates this by showing that 67 per cent of manufacturing supervisor jobs posted had a university degree as a pre-requisite, when only 16 per cent of the people currently doing those jobs possessed degrees. There is no similar research done in Singapore, but I suspect that the situation is similar here.

In the U.S., hiring companies tune their automated job hiring software to screen out candidates for jobs just on whether they have a degree or not. As a result, Groysberg believes that millions of jobs have gone unfilled. Which in turn results in millions of people left either unemployed or underemployed due to companies excessively focusing on university credentials rather than on job-relevant skills.

In addition, he warns that degree obsession is particularly harmful to workers of colour and minorities because of “historic and systemic inequities” in America. This trend results in the employment progress of these vulnerable groups being held back because “arbitrary degree requirements disqualify more than 70 per cent of Black, Latin, and rural workers in the U.S.”.

Potential solution: Skills-based hiring

A solution to the vicious cycle is for companies to move towards skills-based hiring. This is the practice of hiring on the basis of skills as opposed to formal educational credentials like university degrees.

Skills-based hiring places an emphasis on practical knowledge, existing capabilities, and skills which an employer can test prior to an interview.

Focusing on skills as a prerequisite is good for companies because it expands the talent pool where companies can find workers to fill long-empty jobs.

For the workers, it increases the opportunity to get good jobs because it is a more inclusive hiring approach, where there are no arbitrary exclusions due to formal educational credentials.

Groysberg’s technical note holds up companies like IBM, Microsoft, and Google that have moved to skills-based hiring for jobs. These companies offer their own internal certifications, training, and apprenticeships to advance their talent pools and to promote diversity and inclusion in their workforce.

Time for Singapore employers to remove unnecessary degree prerequisites

Singapore too is facing a similar situation to the U.S. where many jobs are going unfilled. The situation has led Lewis Garrad of HR consulting company Mercer Singapore to say that “we are in an extraordinarily tight labour market.”

According to the Ministry of Manpower (MOM), the recent ratio of job vacancies to unemployed people is 2.42, which is at its highest since 1998, almost 25 years. There are almost 2.5 jobs available for every single unemployed person in Singapore.

To resolve the talent crunch, perhaps it is time for employers in Singapore to step up and take out unnecessary pre-requisites for degrees in their job postings and advertisements.

By using a degree as an arbitrary requirement, local employers would be falling into the same mistake that Groysberg accuses U.S. employers of making — where many viable workers are left unemployed (or underemployed) due to an excessive focus on university credentials rather than on job relevant skills.

The Skills Path initiative launched in August 2021, supported by the National Jobs Council, seeks to help job seekers demonstrate their competencies, as well as support firms in expanding their pool of talent with diverse experiences. Companies like CapitaLand, OCBC Bank, and Zalora have come on board and it is a step in the right direction, but more needs to be done.

Companies that don’t lose their obsession risk being left behind

In my view, there will always be professions where educational credentialing will continue to play an important role — like in medicine and law. In such professions, years of practice and industry-level credentialing are needed to ensure the ethics, quality, and reputation of the profession. As we have seen from ethical breaches in the legal and medical profession, even such credentialing is not sufficient to weed out all the black sheep in such professions.

However, we live in an age where new skills, business models, and new jobs are emerging daily. If a company is seeking to remain cutting edge, it will have to open itself to some level of skills-based hiring or risk being left behind in the war for talent.

At the medical technology company that I run, we have piloted skills-based hiring, by dropping formal academic qualifications for some jobs, even senior ones, in the areas of digital and marketing.

The pilot has gone well with a more diverse pool of candidates coming forward. By dropping our own degree obsession for some jobs, we found that we had more interesting conversations with the candidates applying. Those without degrees didn’t feel pre-judged and were better able to display their skills and capabilities via their portfolio and experience.

Where possible, we implement a skills test to make sure that the skills which candidates claim are indeed present. You would be amazed by how a 30-minute writing test differentiates those that can write, from those that cannot.

On the home front, unlike my own mom, I do not nag my own two kids about getting degrees. Instead, I focus them on acquiring skills that are aligned with the jobs that they might aspire to do in their lives.

Both boys have been programming since they were in their pre-teens and continue to pursue their own passion projects in diverse areas like healthcare and music, depending on where their interests and passions take them.

My plan is that when they are ready for jobs, I will instead nag them to join companies that hire based on skills, because I see that as the mark of a future-oriented company, which will value them for what they can do, and not what types of degrees they may or may not ultimately have.

 

Source: Mothership