When skills outpace degrees: why employers can’t wait for universities to catch up

By Marcelo Lebre, President and Co-founder at Remote

Talent is everywhere, but opportunity is not always evenly spread.

Forward-thinking employers know this, which is why the smartest businesses are now hiring for ability rather than academic pedigree. Of course, there are roles where credentials will always matter (no one wants to be treated by a doctor without a medical degree, for example). But for all the other jobs out there that don’t, a formal degree shouldn’t ever be a benchmark for skill, intelligence or potential. 

This shift is particularly pressing in Australia, where workplaces are evolving at a pace tertiary institutions often struggle to match. AI adoption is accelerating, and entire industries are being reshaped, with new tools entering the market much faster than universities can redesign a syllabus. A degree still has value, yes - but, isn’t the clearest signal of a person’s potential in the workforce anymore. 

The pace of AI learning is already outstripping education

The faster new tech innovates, the less reliable degrees become as a proxy for job readiness. LinkedIn research shows the average skill set for a job has changed by 40% since 2016, and many of the roles being reshaped are in areas where formal education is slowest to adapt. If we look at AI specifically, PWC Australia notes the percentage of job ads requiring a degree has fallen from 80% to 74% between 2019 and 2024. 

AI literacy is now among the most in-demand capabilities, yet most degree programs barely touch it, and those that do risk being outdated by the time students graduate. A recent Deloitte study found that more than half of Gen Zs and millennials are already using generative AI at work. This familiarity hasn’t come from university classrooms, but from learning on the job, independently upskilling, or experimenting with tools in real time. The study also reveals that more than one-third of Gen Zs and millennials plan to engage in generative AI training within the next year. 

The skills gap is especially visible in fast-moving sectors like tech, digital services, and finance. In Australia, companies Canva have publicly backed skills-first hiring strategies, removing university degree requirements and building values-based recruitment processes. Meanwhile, Atlassian is advocating for short, practical training pathways to build the skills employees need in an AI-led economy.

Initiatives and reprioritisations such as these will give employers access to a more diverse talent pool, recognising that the best candidate may be self-taught, not degree-qualified.

The case for non-traditional hires

Dropping degree requirements has been game-changing for many employers. It opens up the talent pool, helps fill critical gaps faster, and allows companies to attract candidates with hard-to-find skills. The Business Council of Australia has long championed reforms to reduce reliance on rigid qualification systems. This includes advocating for micro-credentialing, lifelong learning and skills accounts, equal respect for VET and higher education, simplified recognition of prior learning, and incentives like SME training tax credits - all designed to open pathways for capable workers who may not follow traditional credentialed routes.

This benefits candidates too, particularly those excluded by systemic barriers. In Australia, access to higher education is still very much shaped by socioeconomic background, geography, and culture. Removing unnecessary degree requirements levels the playing field for people with adaptability, drive, and instinct, whether or not they’ve followed the traditional academic route.

How businesses can solve the issue of skills outpacing teaching

To truly make skills-based hiring work, companies need to rethink their entire evaluation process. That doesn’t mean most hires will suddenly be non-graduates. This isn’t about devaluing higher education, but about valuing skills wherever they’re built. The best employers hire not just for knowledge but for curiosity, adaptability, and the ability to problem-solve and collaborate. Those traits don’t appear on a transcript: they show up in how people think and how they’ve chosen to learn.

Australia faces one of its tightest labour markets in decades, while also experiencing the most rapid technological disruption in history. Employers who cling to outdated degree expectations risk missing the very people who can help them adapt.

The way forward is clear: hire for how people learn, how they innovate with emerging tech, and how they solve problems - not simply for what they studied.