As India enters this transformative phase in hiring practices, both employers and job seekers need to embrace the opportunities presented by skills-based hiring
The job market in India is constantly changing, and we are now witnessing a significant shift towards skills-based hiring. The old-fashioned approach to hiring, which relied on academic qualifications and work experience, is giving way to a more dynamic method that prioritizes specific skills. The new skills-first approach enables professionals to explore unconventional career pathways and places greater emphasis on their abilities rather than their educational background. This shift reflects a wider recognition that skills, rather than just degrees, are the key to success in today's highly competitive job market.
A skills-first hiring approach gives priority to a candidate's practical abilities over traditional qualifications. This trend is growing rapidly in India as employers realize the value of diverse skill sets. It is relevant today because it provides equal opportunities for all, allowing talent to shine beyond academic labels. The advantages of this approach include a more inclusive job market and the ability to tap into hidden talent.
This approach values merit over formalities, enabling professionals from diverse backgrounds to contribute on a global scale. Every foreign job market has a specific skill shortage that they are looking to fill, and this approach helps to fill that gap. According to a report titled 'The State of Skills-Based Hiring 2023', 86 per cent of employees believe that they are more likely to secure their dream job when the hiring process includes skills-based hiring.
The latest data from the Periodic Labour Force Survey (PLFS) is alarming: a whopping 86% of individuals aged between 15 and 59 years have not received any form of vocational training. This is unacceptable! It is high time that we focus our efforts on converting this pool of individuals into skilled human capital.
The current trend in hiring prioritizes skills. Therefore, high schools and post-secondary education institutions must design their curriculum to focus on these skills. The New Education Policy (NEP) 2020 rightly emphasizes the need for standardized vocational training courses in high schools, with a range of experiences aimed at developing a bundle of skill competencies.
To achieve the goal set by the NEP of increasing the gross enrolment ratio in higher education, including vocational education, to 50% by 2035, further action is needed. This requires the addition of 3.5 crore new seats to higher education institutions (HEIs) and focusing on a flexible curriculum with creative combinations of subjects. We must integrate vocational education with mainstream education and allow for multiple entries and exits with appropriate certification. To provide our students with the best possible skills, it is imperative to establish Multidisciplinary Education and Research Universities (MERUs) at par with the Indian Institutes of Technology (IITs) and Indian Institutes of Management (IIMs).
However, accurately assessing these skills may pose challenges. Nevertheless, the future outlook suggests continued growth, fostering innovation and adaptability in a workforce where skills, not just degrees, define success. This reflects a dynamic shift towards meritocracy in the evolving employment landscape. The growing integration of advanced technologies like generative AI, machine learning, cloud computing, and data science across these sectors drives the trend. As these technologies continue to propel business and alter business operations, the demand for upskilling in technology remains robust. Companies are increasingly seeking professionals with specific skills to fill key roles in areas such as valuation analysis, financial research, investor relations management, and risk analysis within this domain.
Skills-first hiring is a new approach that is dismantling traditional barriers to offer global work opportunities irrespective of educational background or regional certifications. For instance, a cyber security expert equipped with practical knowledge and certifications can now find doors opening abroad, as security needs transcend geographical confines.
IBM India has adopted a 'skill-first' approach where college degrees do not matter. In 2012, IBM implemented this approach in the US by removing the four-year college degree requirement from about 50% of its jobs. Ten years later, 29% of the present IBM US workforce in hardware, software, and consulting does not have a college degree. However, companies like Oracle had 100%, followed by Intel (94%), HP (92%), and Apple (90%).
A study conducted between 2017 and 2022 showed that US employers reduced degree requirements for 46% of middle-skill positions and 31% of high-skill positions. Various studies highlight that for the job of software quality-assurance engineer, only 26% of Accenture's postings for the position contained a degree requirement.
The rise of skills-based hiring can be attributed to several factors, each contributing to a more comprehensive and efficient employment ecosystem. One of the key drivers is the fast-paced evolution of technology, which has made some skill sets obsolete while creating an insatiable demand for new ones. As industries digitize and automate, employers are looking for candidates who have the technical expertise required to navigate this new world.
Skills-based hiring is not only about technical prowess but also about fostering inclusivity in the workplace. By focusing on skills, employers can tap into a broader talent pool, breaking down barriers related to age, gender, or educational background. This approach enables individuals with non-traditional career trajectories to showcase their abilities, ultimately leading to a more diverse and innovative workforce.
In a country as diverse as India, this inclusive hiring model is crucial for unlocking the full potential of the population. It allows for the recognition and utilisation of a rich tapestry of skills that may be overlooked in a more rigid, qualification-centric system.
When individuals are hired based on their skills instead of solely on academic qualifications, there is a higher likelihood of job satisfaction and engagement. Employees who feel that their skills are valued are more likely to invest in their professional development, leading to a continuous improvement loop.
This paradigm shift challenges the traditional notion that a candidate's potential is solely based on their educational background. It acknowledges that skills are dynamic, and the ability to learn and adapt is highly valued in today's fast-paced work environment.
As India transitions to this transformative phase in hiring practices, both employers and job seekers need to embrace the opportunities presented by skills-based hiring. Job seekers should focus on acquiring and showcasing relevant skills, whether through formal education, online courses, or on-the-job experience. Employers, on the other hand, should refine their recruitment processes to ensure that they identify and nurture the diverse talents that the Indian workforce has to offer.
In conclusion, skills-based hiring in India marks a pivotal moment in the country's employment landscape. It is a departure from traditional norms, a response to technological evolution, and a step toward a more inclusive and dynamic professional future. As India continues to embrace this shift, the workforce will be characterised not just by degrees but by a mosaic of skills that power innovation and drive success in an ever-changing global economy.
(The writer is a Co-Founder and MD of Orane International, a Training Partner with the National Skill Development Corporation (NSDC), and a Network Member of India International Skill Centres, Views expressed are personal)
