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Skills-based hiring trends and challenges ahead

The adoption of skills-based hiring has been on the rise, as indicated by a recent report from LinkedIn. In 2022, 29% of paid job postings on the platform did not require professional degrees, compared to 21% in 2019. However, this shift has not necessarily translated into increased hiring of non-degree holders.

LinkedIn users, especially those using the paid Recruiter feature, have prioritised skills-based searches over degree-based ones. This change in user behaviour suggests a growing emphasis on skills when seeking candidates. However, the crucial question remains: Does eliminating degree requirements lead to more hires of individuals without degrees?

According to Greg Lewis, a senior content marketing manager at LinkedIn, the answer varies across industries and functions. While many industries have embraced the concept of skills-first hiring in their job postings, the actual hiring practices often lag behind.

In some sectors, job postings that do not require degrees are growing at a significantly faster rate than those that do. Notably, financial services, accommodation and food services, and technology, information, and media are among the sectors experiencing substantial growth in degreeless job postings.

Certain job functions also exhibit accelerated growth in degreeless job postings, with accounting leading the way. However, when it comes to actual hiring, the results are mixed. Degreeless hiring is increasing, but the rate of hires without degrees frequently falls short of the rate indicated in job postings.

In industries like accommodation and food services, there has been an 11% faster growth in hiring individuals without professional degrees compared to those with degrees. A similar trend is observed in financial services with 6% faster growth and in technology, information, and media with 3% faster growth.

Despite these variations, some industries, such as consumer services, entertainment, and government administration, are actively hiring more workers without degrees. Roles like project managers and administrative assistants are among the top positions filled by hires without degrees in these industries.

Across various job functions, there have been modest increases in the hiring of individuals without degrees, particularly in community and social services, media and communication, and legal specialties like paralegals.

However, Greg Lewis notes that the shift in hiring practices is less dramatic than the change in job postings. This suggests that while recruiters are increasingly searching for candidates based on skills rather than degrees, traditional degree requirements still heavily influence hiring decisions made by managers.

To bridge this gap, Lewis emphasises the need for recruiters to collaborate with hiring managers as strategic advisors to bring about real changes in hiring practices. He underscores that meaningful change requires time and effort, and merely talking about skills-based hiring is just the initial step.

Lewis also highlights the importance of including relevant skills in job postings on LinkedIn. Such postings tend to attract more applicants and enjoy higher conversion rates. Candidates can envision themselves in these roles, even if they lack exact previous experience.

Furthermore, organisations that adopt skills-based practices and hiring methods tend to outperform their peers, according to a Deloitte report. However, many companies struggle to implement significant changes, particularly in response to the growing demand for workplace agility.

To address this challenge, companies can focus on in-house training, apprenticeships, and other nontraditional approaches to build their talent pipelines and meet the evolving needs of the workforce.

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Only a third of jobs require a degree

With A-Level results looming, new research has been released, revealing that 40% of young people are choosing a university education, compared to 35% at the same time last year. The research from City & Guilds also showed a sharp gender divide – with 47% of girls aged 17-19 considering going to university, compared to just 31% of boys.

According to the research, girls are more concerned with future earnings. Fifty-four percent base their post-school choice on what they believe is the best route to getting a good job with a good salary. In comparison, only 44% of boys made decisions in this manner.

Interestingly, a labour market analysis from Lightcast revealed that only 29% of UK jobs require a degree qualification, meaning that young people could be setting themselves up for unnecessary debt without a clear career trajectory.

Young people appear to be basing their education choices on perceived career prospects. City & Guilds urges schools to provide strong career advice based on current labour market insight, ensuring that the youth, their parents, and teachers know all available options.

The research also revealed differences between the influences that sway young people’s career choices. For example, girls are more likely to be influenced by their family (42%) than just 23% of boys. However, boys are almost twice as likely as girls to choose based on what they’ve seen on TV or social media.

The research also looked at the impact of rising costs on young people’s decisions. Fifty-six percent of 17-19-year-old respondents said that the rising cost of living has made them reconsider the career they might pursue post-school or college. Sixty-seven percent said that they are thinking more about salary when considering potential careers. A further 60% plan to spend longer in full-time education to assist them in getting a better-paid job in the future.

David Phillips, Managing Director of City & Guilds, commented: “It’s crucial that both young men and women have access to robust and up-to-date careers advice that gives a true image of today’s labour market and challenges outdated gender stereotypes about careers. This will ensure school leavers know what is most likely to lead to a good job when they are making choices about their futures. We have seen from our research that both boys and girls are heavily influenced by those in their networks, so it’s vital that parents, and teachers, are made aware of the breadth of educational and training routes, outside of the traditional academic ones, that can lead to rewarding and well-paid jobs.”

“It’s reassuring to see that young people are already thinking ahead about the career options available to them. However, as the UK battles against a volatile labour market, with a potential recession on the horizon and a cost-of-living crisis, ahead of this year’s results day, it’s more important than ever that young people make informed decisions about their futures.

“While university is the right path for some, it’s certainly not the only option. Our recent Great Jobs research shone a light on the essential jobs that make up 50% of all UK employment opportunities – many of which rely on vocational routes such as traineeships, apprenticeships and T Levels. As young people look to invest in their future, we encourage them to consider the full breadth of options available so they can identify which path is right for them.”

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Lack of salary increases and growth opportunities identified as top issues

Two new reports published by 360Learning have indicated that the Learning and Development sector has some challenges to deal with. The reports revealed that 42% of UK L&D professionals had not received a pay rise in recent months, and a further 23% believe they do not have opportunities to develop at work.

The reports, which look at salaries, progression, and satisfaction in corporate Learning and Development (L&D) teams across the US and UK, have the following findings:

In the UK:

  • The most common annual salary range was found to be between £30-£39k a year
  • The average salary comes in at £31.6k
  • People working in voluntary sectors were likely to earn less than £39k
  • People in the private sector had the best chance of earning more than £80k
  • 25% of L&D Managers earned between £50-£59k
  • Administrators in the L&D environment earned the least at below £39k

In the US:

  • The most common salary range was $70-$100k
  • The mean salary across all roles was much higher than the UK average, at $91.2k
  • 41% of L&D Managers earned more than $100k
  • Instructional Designers and Learning Specialists in the L&D environment earned the least, at less than $70k

The gender pay gap is also clear in the results with:

  • One-third of UK women earn less than the national average (£31,285) compared to only a fifth of men
  • Half of the women in the UK earned less than £39k, compared to only 36% of men
  • Only a quarter of women said they earn more than £40k, versus 41% of men in similar roles

When looking at reasons for lack of advancement, in the UK, 6% of women report that childcare and family are stopping them from growing at work, compared to just 1% of men.

In the US, 4% of people cite personal or family reasons for preventing advancement.

The studies also looked at salary satisfaction. Interestingly, despite gender and role disparities, 53% of L&D professionals in the UK and US were satisfied with their salaries, with the satisfaction increasing per age bracket.

In the UK:

  • 56% of men and 55% of women were satisfied with their earnings
  • 58% of men and 59% of women between 25 and 45 were also happy with their incomes.
  • 42% of UK professionals haven’t had a pay rise in more than 12 months
  • Of the professionals who had not had a pay rise, 54% admitted that they’re not comfortable asking for one
  • Among the professionals who did receive pay rises, 52% were below the rate of inflation, with 45% as low as 1%-3% – half the rate of inflation

In the US:

  • 80% of professionals have had a raise in the past two years
  • 20% have had no raise at all or last had a raise three or more years ago
  • If they have had a pay rise, 38% saw a 1-3% increase
  • 10% of professionals had enjoyed a salary increase of 10% or more over the past 12 months. 41% were “comfortable” or “very comfortable” about asking for pay rises

As far as the impact of education and career experience on salary is concerned, the survey found that 74% of higher salaries across the UK went to people aged over 45; however, 73% of the over 45s surveyed had been in the L&D industry for less than a year.

It would appear that qualifications do not have much influence on compensation. Most of the UK respondents don’t have an L&D-related degree. Of the respondents who earned more than £70k a year – only 7% had degrees or higher. However, in the highest salary bracket, only 2% of people without an L&D-related degree earn more than £80,000 compared to 6% of respondents who do. Clearly,  L&D degrees can lead to higher salaries when it comes to senior roles.

In the US, where wages were higher than $70k, there were almost equal numbers of people with L&D degrees and those without, indicating that on-the-job training via mentors, upskilling, and learning management systems can be an effective route to progression.

The survey provided insights into the roles of mentors in earning potential. For example, the respondents who had a salary of more than $100k a year were more likely to have mentors than those earning lower salaries. Similarly, professionals with a 4% or higher salary increase in the previous 12 months were also likely to have had a mentor.

Generally speaking, mentorship numbers are higher in the US than in the UK. Of the US respondents, 65% of professionals agreed that they benefitted from mentoring, while only 47% in the UK said the same. These numbers could correlate with the fact that 20% of male and 21% of female L&D professionals in the UK feel that they lack opportunities to progress in their careers.

With 4% of US respondents and 22% of UK respondents saying they want to leave L&D, it is essential that L&D professionals feel empowered to effectively provide training and support to other employees.

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