Do Degrees Still Matter in 2025? Why Skills Come First Now

TestInvest
Jul 17
9 min read

In today’s job market, employers are rethinking the once-standard requirement of a university degree. With skills-based hiring on the rise, many are asking whether a diploma is still the ticket to a great job – or if real-world abilities matter more. The trend is clear: companies are increasingly prioritizing skills over degrees to find the right talent. In fact, a recent survey found that over half of employers (53%) have dropped degree requirements from some roles, a dramatic jump from the year before. This shift is reshaping how organizations hire and how candidates prepare for careers.

Degree Requirements Are Dropping Rapidly

Not long ago, a bachelor’s degree was a baseline requirement for many decent jobs. Now, that’s changing fast. Major firms – including leading Australian companies like Canva, WiseTech Global, and Culture Amp – have relaxed or removed degree requirements for most positions to widen their talent pools and boost diversity. A global study in 2025 confirmed this movement: 53% of surveyed employers said they no longer require a university degree for many roles (up from just 30% the previous year). Likewise, LinkedIn’s data shows job postings increasingly omit “BA/BS required” – in 2023, about 26% of paid job ads on LinkedIn didn’t list a degree requirement, up 16% from 2020.

Why are degrees being dropped? Employers cite talent shortages and skills gaps as a driving force. Nearly two-thirds of companies report it’s harder to find qualified talent now than a year ago, and 7 in 10 hiring managers say they value relevant experience more than a formal degree when making hiring decisions. Simply put, insisting on a degree can screen out capable people in a tight labor market. Australian statistics underscore this point: only about 32% of Australians (ages 15–74) hold a bachelor’s degree or higher. That means a strict degree requirement automatically rules out the majority of potential candidates. By adopting a more open, skills-first approach, recruiters can unlock a much broader talent pool – LinkedIn research suggests Aussie hiring managers could find up to ten times more suitable candidates for a given role by focusing on skills over credentials.

Dropping degree filters isn’t just about quantity of applicants; it’s also about quality and diversity. Several companies that eliminated degree requirements have reported a surge in applications and a more diverse applicant pool, without a drop in job performance. In one survey, 84% of companies that recently removed degree mandates said it proved beneficial – they could even consider a wider range of talent and improve hiring efficiency. Canva’s HR team, for example, credits their no-degree-required policy (implemented in 2020) with helping build teams that better reflect their customer base and finding strong candidates they might have overlooked before. Culture Amp made a similar move years ago (keeping degrees only for legally regulated roles) and found it advantageous: their Chief People Officer noted that research shows having a degree is actually a weak predictor of someone’s skills. In other words, a diploma doesn’t guarantee ability – so Culture Amp directly evaluates candidates on what they can do. This sentiment is growing across industries. As one HR expert observed, in today’s fast-paced economy, completing a three-year degree doesn’t ensure a graduate has the up-to-date skills for the job. Employers are realising they can’t rely on old proxies (like an alma mater) to signal talent in an era when skills needs evolve faster than traditional curricula.

It’s worth noting that degrees haven’t become completely irrelevant – certain professions (law, medicine, engineering, etc.) still require formal qualifications, and on average university graduates tend to earn more over their careers. But for many roles in tech, business, and creative fields, the degree is no longer the make-or-break factor it once was. Even the CEO of Australia’s leading universities group recently acknowledged that a university education isn’t essential for everyone and that vocational and alternative pathways are crucial to build the skilled workforce the country needs. The consensus is that practical skills, adaptability, and learnability are what employers need most in 2025 – and those aren’t exclusive to degree-holders.

The Rise of the Skills-First Mindset

If degrees are taking a backseat, what’s replacing them in hiring? The answer is a skills-first mindset. This approach means judging candidates on what they can do – their competencies, knowledge, and potential – rather than on paper qualifications alone. Employers adopting skills-first hiring use a variety of strategies to identify the best talent without relying on college diplomas:

Rewriting Job Descriptions: Companies are removing blanket education requirements and instead listing the specific skills and proficiencies needed for the role. A job ad might say “proven experience in project management and data analysis” instead of “MBA preferred,” for example. By highlighting capabilities over credentials, they attract a broader range of applicants with the right strengths.
Skills Assessments and Real Tasks: Rather than trusting resumes at face value, employers are giving candidates practical tests, auditions, or sample projects. These might include coding challenges, writing assignments, design portfolios, or simulated on-the-job exercises that let candidates demonstrate their abilities. (For instance, Siemens has used task-based assessments to gauge problem-solving and technical skills in applicants.) Such hands-on evaluations show who can actually do the work, regardless of where (or if) they went to university.
Structured Interviews Focused on Skills: Interviews are being redesigned to probe for competencies and soft skills. Recruiters use standardized questions and scenarios to see how candidates think and behave in relevant situations. By asking about real-world examples, situational judgments, and role-specific knowledge, employers get insight into a candidate’s skill set beyond what a GPA can show. Standardised scoring rubrics help ensure that interviewers evaluate each candidate on relevant merits and reduce bias that might favor those from certain schools.
Embracing Alternative Credentials & Learning Paths: A skills-first employer gives credit for non-traditional education – things like TAFE courses, online certifications (e.g. in digital marketing or IT support), coding bootcamps, apprenticeships, or simply on-the-job training. These pathways often produce candidates with very applicable skills. In fields like tech, for example, a self-taught programmer or a bootcamp graduate might be just as capable (or more so) than someone with a computer science degree. Companies are recognising that hands-on experience and continuous learning can matter more than a formal degree program.

Underpinning this mindset is the idea that ability and potential matter more than pedigree. It’s a fairer way to hire and often more effective. By widening the gates, organisations can access untapped talent – including people who couldn’t afford college or who gained skills through unconventional routes. This boosts diversity and inclusion, since candidates from underrepresented groups are less likely to have had the opportunity to earn a degree. Skills-first hiring levels the playing field by giving all candidates a chance to prove themselves on relevant criteria.

Crucially, a skills-first approach tends to produce better outcomes for employers too. When you hire based on proven skill, you increase the odds of getting a high performer. Research backs this up: hiring for skills has been found to be five times more predictive of job performance than hiring for education, and employees without degrees often stay in their roles longer than those with degrees on their CV. (One study noted that non-graduate hires had 34% longer tenures on average, likely because opening roles to a wider talent pool leads to better fit and loyalty.) No wonder 94% of business leaders in one survey agreed that skills-based hiring better predicts success on the job than traditional screening of resumes. The focus has shifted to “what you can do” rather than “what qualification you have”, and that is proving to be a smart strategy in the dynamic economy of 2025.

Of course, making the switch to skills-centric hiring takes some effort. Companies need to invest in defining the skills that drive success in each role and in tools or processes to evaluate those skills consistently. It’s a change in mindset for hiring managers accustomed to using degrees as a shorthand. But those who have implemented it say the benefits – in quality of hire, time-to-fill, and retention – far outweigh the challenges. As the head of talent at WiseTech put it, breakthroughs happen when people with diverse backgrounds and skill sets collaborate – something you get more of when you open your hiring filters. In short, skills-first hiring isn’t just a feel-good trend; it’s a competitive advantage in finding exceptional people who might be missed by old hiring practices.

Why This Shift Matters (and How TestInvest Fits In)

For employers, adopting a skills-first approach isn’t merely about dropping degree requirements – it’s about finding better ways to measure and trust candidates’ abilities. Surveys show that one of the hardest parts of hiring today is determining whether a candidate truly has the right skills for the job. In the State of Skills-Based Hiring 2025 report, over half of employers said their biggest challenge was figuring out if candidates possess the needed soft skills (53%) or technical skills (51%) for the role. In other words, you can’t rely on a fancy diploma or a slick resume anymore – you have to verify skills directly. Tools and platforms that help assess skills are therefore becoming invaluable in this new hiring landscape.

"Over half of employers said their biggest challenge was figuring out if candidates possess the needed soft skills or technical skills for the role

This is where TestInvest and similar solutions come into play. TestInvest is a skills assessment platform designed precisely to support the skills-first hiring revolution. It allows employers to test candidates’ real-world skills and proficiency before making a hire. Rather than guessing from a CV, hiring managers can see candidates in action through tailored assessments – whether it’s evaluating their analytical abilities, software proficiency, problem-solving approach, or even their grasp of tools and processes specific to the business. By giving objective, data-driven insights into what a candidate can actually do, TestInvest helps companies make confident hiring decisions based on merit. This aligns perfectly with the shift away from academic credentials. As TestInvest’s founders would argue, great talent can come from all backgrounds, and you discover it by looking at performance, not pedigree. (In fact, the CEO of a leading skills-testing firm recently noted that employers are waking up to the reality that “a degree is no longer the ticket to opportunity it once was” – talented people without formal qualifications are proving themselves every day.)

Integrating skill assessments like those from TestInvest into the hiring process brings multiple advantages. Firstly, it reduces bias – candidates are judged on their work output and capabilities, not on personal factors or where they went to school. This makes hiring fairer and more inclusive. Secondly, it saves time in the long run: automated tests can quickly filter out those who lack key skills and highlight the high-potential applicants, streamlining the screening stage. Thirdly, it gives candidates a chance to shine. Many job-seekers (especially those without degrees) welcome the chance to prove themselves through skill-based evaluations. (Surveys indicate that about 70% of Australian job seekers prefer skills-based hiring, seeing it as their best shot at landing their dream role.) By using platforms like TestInvest, employers send a message that they care about what you know and can do – not just which school you attended. This attracts motivated candidates and builds a stronger employer brand.

Finally, a skills-first hiring strategy is forward-looking. In a world where new technologies and methodologies emerge rapidly, what you learned in school five or ten years ago may be outdated. Hiring for current skill and raw ability means you’re bringing in people who can hit the ground running and adapt as the field evolves. TestInvest’s real-world simulations and tests help ensure new hires are truly job-ready. As a result, companies build teams that are competent and future-proof. It’s telling that organisations at the forefront of this trend are also the ones known for innovation and growth – they understand that to stay competitive, they need the best skills on board, period, not just the fanciest degrees.

So, do degrees still matter in 2025?

The question was, do degrees still matter in 2025? The answer is increasingly “not the way they used to.” While education will always have value, employers are far more interested in what you can bring to the table now. A skills-first, “hire for talent, train for gaps” mentality is taking hold, creating a more meritocratic job market. For employers and educators, it’s time to adapt to this reality by emphasising practical skills development. For candidates, it means you can showcase your abilities through portfolios, projects, and assessments to prove your worth – even without a degree. And for everyone, it’s an opportunity to benefit from a workforce where the best person gets the job, regardless of background.

If you’re ready to embrace this shift, consider how skills-based hiring can improve your organisation. It might be as simple as revising a job posting, or as comprehensive as overhauling your evaluation process with new tools. TestInvest is here to help make that transition smoother by providing an easy-to-use platform for validating the skills that matter to you. Don’t get left behind relying on old hiring habits – be part of the shift to skills-first hiring – sign up now and discover how focusing on skills can transform your talent strategy.

👉 Join the waitlist today at www.testinvest.com.au

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