When skills beat degrees in an AI economy

HIRING in Singapore has long revolved around paper qualifications despite efforts to make them less relevant. While nearly 80 per cent of the country’s job postings in 2024 did not require the candidate to have a degree, most roles still went to those who had one.

However, the move towards an artificial intelligence economy may finally be forcing employers to re-evaluate their criteria.

As the skills required to create impact are changing, academic degrees have become a weaker predictor of performance. In a skills-first economy that rewards adaptability and digital fluency, there’s a gap between how talent is assessed and the capabilities that companies say they need.

There is a growing pool of “new-collar” talent, referring to professionals who merge technical know-how with problem-solving, adaptability and real experience. The challenge for employers is defining what being qualified means.

Mismatch

More companies are adopting AI into digital workflows, and the tech is rewriting what “entry-level” and “job-ready” mean.

According to a 2024 report from Jobstreet by Seek, 52 per cent of professionals in South-east Asia expect AI to alter their responsibilities, while 23 per cent expect their role to require some reskilling. This shift is not confined to tech firms.

This has led to higher demand for AI-related skills. Data from Jobstreet Singapore shows a 130 per cent year-on-year increase in job advertisement terms related to AI and tech roles such as “blockchain”, “AI scientist” and “AI software engineer” from December 2024 to November 2025 compared with the 12 months prior.

But while demand for AI skills is accelerating, hiring practices have been slower to evolve.

A September 2025 report from Morgan Stanley predicts that AI could affect 90 per cent of occupations to some degree. This indicates that hiring teams need to focus on candidates with skills that support long-term company goals, which will increasingly involve AI.

Outdated signals

Despite the rising demand for technical and digital skills, many employers continue to default to “degree-first” filters. In Singapore, this is reflected in a 130 per cent spike in user searches for terms such as “degree”, “bachelor” and “university” on Jobstreet from November 2024 to October 2025 compared with the 12 months prior.

The result is a perception gap. Employers report skills shortages, while capable candidates are filtered out because they do not fit the traditional criteria.

With AI simplifying routine work, employers no longer want hires who can merely follow task lists. They want talent who can use AI tools to streamline processes and interpret AI-generated insights for complex, real-world business contexts.

It’s not that entry-level jobs are disappearing, but expectations for these roles are shifting.

In Singapore, job advertisements mentioning “fresh graduates” rose 28 per cent between November 2024 and October 2025. At the same time, employers are prioritising applied skills over academic credentials, with mentions of “data analysis” up 42 per cent and “automation” up 4 per cent over the same period.

This signals a broader shift towards “new-collar” roles, where early-career professionals are expected to bring a baseline fluency in AI-enabled tools and digital workflows. Candidates who can show that they can drive real-world impact through projects, portfolios or hands-on experience have an advantage over those relying solely on paper qualifications.

Staying ahead

What should employers do when they need new skills but are stuck using old signals? The answer isn’t to panic-hire anyone with AI all over their CV but to recalibrate their recruitment process.

Employers can start by reassessing qualification filters, especially for digital and tech-adjacent roles. Moving beyond degree requirements allows organisations to evaluate candidates more holistically, basing their assessments on applied competencies and problem-solving abilities.

This can start from the hiring stage, where organisations can shortlist candidates based on relevant hands-on experience in their portfolio or implement skill assessments to evaluate their practical abilities.

Beyond recruitment, building sustainable talent pipelines also requires striking a balance between external hiring and internal upskilling. Implementing structured learning initiatives helps companies remain resilient and improves employee retention.

Organisations can do so by introducing regular mentorship programmes or creating rotational assessment schemes that allow employees to gain more industrial exposure and develop a diverse range of soft skills. For smaller organisations that lack the resources for these efforts, they can provide cross-functional projects or job shadowing opportunities.

At the same time, employers should be aware of the AI bubble and its potential effects on hiring. A 2025 report by the World Economic Forum notes that while employers in South-east Asia anticipate significant skill shifts over the next five years, 60 per cent worry that skill gaps will hinder their ability to prepare.

Rapid investment in new tech can lead to short-term hiring surges that outpace real demand, similar to what happened with the dot-com bubble. Inflated job titles, laundry-list job descriptions or inadequate skills assessment frameworks can result in overhiring and fragile leadership pipelines.

Employers should match titles, compensation and career pathways to verified capabilities rather than optics, as much as the latter may appeal to shareholders.

For example, firms could prioritise employees with the relevant skills that would help them thrive in senior roles. These employees, who possess strong technical skills as well as the soft skills to guide and manage their junior team members, can drive long-term growth.

Those who adopt evidence-based, skills-first hiring will be better positioned to access capable, “new-collar” talent. Otherwise, they risk overlooking high-potential candidates who bring practical experience and adaptability.

As AI continues to reshape work, skills-based hiring will only grow in importance. To stay competitive, employers and job seekers must move beyond credentials and towards demonstrated capability and impact. TECH IN ASIA