Why skills are becoming the new currency in hiring
The way employers assess talent is changing quickly. For years, degrees were treated as the clearest signal of capability, commitment and career potential. But as workplaces evolve and job requirements shift faster than ever, many organisations are beginning to ask a more practical question: can this person actually do the job?
This change is being driven by several factors at once. Technology is reshaping tasks, business leaders are under constant pressure to improve productivity, and many employers need people who can contribute from day one. At the same time, the cost of formal education has risen sharply, prompting candidates and families to think more carefully about whether a traditional degree path always delivers the best return.
The result is a growing focus on skills-first hiring. Rather than relying too heavily on qualifications alone, employers are placing more emphasis on adaptability, evidence of performance and the real-world capabilities a candidate can bring into a role.
“Rather than looking purely at what school you went to or what degree you’ve got, it’s actually about evidence.”
On a recent AU Market Update, Host Mark Green, Western Sydney Branch Manager, was joined by Guest Bex Thomas, Career Transition Coach at Bex Thomas Coaching, to explore the rise of new-collar hiring and what it means for employers and jobseekers alike.
One of the clearest themes from the discussion was that this is not simply a rejection of degrees. Instead, it reflects a broader reassessment of what job readiness looks like in a market defined by change. Bex pointed out that while HR professionals and recruiters may be trying to shift the conversation towards skills and capability, hiring managers still need to be brought on that journey. That matters, because the success of skills-first hiring depends not only on policy, but on how decisions are made day to day.
Another reason for the shift is the pace of change in the modern world of work. In a three or four year degree, the needs of an industry can move significantly, especially in sectors being shaped by digital transformation and AI. Employers are increasingly questioning whether qualifications alone can keep pace with the practical demands of evolving roles. As Bex observed, many jobs are changing so quickly that organisations are looking for people who can demonstrate outcomes, not just academic knowledge.
That does not mean degrees have lost all value. Far from it. In regulated professions such as law and medicine, formal education remains essential. The discussion made it clear that the real opportunity lies in understanding where a degree is necessary and where it may be only one part of a broader picture. In many commercial roles, especially those in sales, operations and people-facing functions, employers may get a stronger signal from examples of performance, portfolios of work, references and competency-based interviews.
This is where the skills-first model becomes especially useful. In practical terms, it asks hiring teams to focus on evidence. Can a candidate show how they have applied a skill? Can they explain the results they achieved? Can they demonstrate judgement, communication, collaboration and problem-solving in a meaningful way? These questions often tell employers far more than a qualification listed on a CV. As businesses look for immediate impact, this kind of hiring process can create a more direct link between selection and performance.
Still, the conversation also raised an important caution. Moving away from degrees too aggressively could create unintended consequences. Bex highlighted the risk that access, networks and geography could start to play a larger role if formal pathways are discounted too heavily. In other words, if organisations swing too far in one direction, they may unintentionally create new forms of inequality. That is why a balanced approach matters. Skills-first hiring should widen opportunity, not narrow it.
For jobseekers, the implications are significant. Those entering the workforce in 2026 and beyond may need to think more broadly about how they build employability. Formal education may still be the right route for some careers, but employability will increasingly depend on a blend of technical knowledge, hands-on experience and what Bex described as “power skills”. These are the human strengths that remain critical in an AI-shaped workplace: communication, teamwork, trust, loyalty, work ethic and self-awareness.
One of the most useful ideas from the discussion was the concept of prototyping a career. Rather than assuming one qualification will define a lifetime of work, candidates can test different interests, reflect on what they enjoy and build careers more intentionally over time. This reflects a growing reality in the market. Careers are no longer always linear. They are often squiggly, lateral and evolving, shaped by changing priorities, values and opportunities.
For employers, this should be a prompt to revisit hiring frameworks. If capability is the goal, job descriptions, interview processes and selection criteria all need to support that aim. Organisations that succeed in this area are likely to be the ones that combine clear technical expectations with a stronger assessment of transferable skills, potential and evidence of delivery. In a market where agility matters, that may become a real competitive advantage.
How can candidates and employers adapt to skills-first hiring?
- Focus on evidence, not assumptions. Use portfolios, examples, achievements and references to show capability clearly.
- Build stronger competency-based interview processes that test how a skill has been applied in real situations.
- Treat degrees as one signal among many, rather than the only marker of future performance.
- Invest in power skills such as communication, collaboration and adaptability, which continue to matter across every industry.
- Encourage career reflection and internal mobility so people can reshape their path as goals and market needs change.
- Keep a balanced approach by recognising where formal qualifications are essential and where practical skills can carry more weight.
