When skills trump degrees in the AI ​​economy

Employment in Singapore has long revolved around paper qualifications, despite efforts to dilute the relevance of qualifications. Although almost 80 percent of domestic job openings in 2024 did not require candidates to have a degree, most roles were still given to people with degrees.

But the transition to an artificial intelligence economy may finally force employers to reevaluate their standards.

As the skills needed to make an impact change, degrees are becoming weaker predictors of performance. In a skills-first economy where adaptability and digital fluency are valued, there is a gap between how talent is evaluated and the capabilities companies need.

There is a growing number of “new collar” talent, a term for professionals who combine technical know-how with problem-solving, adaptability and real-world experience. The challenge for employers is to define what it means to be qualified.

mismatch

More and more companies are implementing AI into their digital workflows, and this technology is rewriting what it means to be “entry-level” or “ready-ready.”

According to Jobstreet’s 2024 report published by Seek, 52% of professionals in Southeast Asia expect their responsibilities to change due to AI, and 23% expect their role to require some degree of reskilling. This change is not limited to technology companies.

This has increased the demand for AI-related skills. Data from JobStreet Singapore shows that from December 2024 to November 2025, there was a 130% year-on-year increase in job ad terms related to AI and technology roles such as “blockchain”, “AI scientist” and “AI software engineer” compared to the previous 12 months.

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

Morgan Stanley’s September 2025 report predicts that AI could impact 90% of jobs to some extent. This means hiring teams need to focus on candidates with skills that support long-term corporate goals, which is increasingly involving AI.

old traffic lights

Despite the growing demand for technical and digital skills, many employers continue to use a “degree first” filter by default. In Singapore, this is reflected in a 130% jump in user searches for terms such as ‘degree’, ‘baccalaureate’ and ‘university’ on JobStreet between November 2024 and October 2025 compared to the previous 12 months.

The result is a perception gap. Employers report skills shortages while talented candidates are excluded because they don’t fit traditional criteria.

As AI simplifies routine work, employers are no longer looking for people to just follow a to-do list. They are looking for people who can use AI tools to streamline processes and interpret AI-generated insights against complex real-world business contexts.

Entry-level jobs aren’t going away, but the expectations for these roles are changing.

In Singapore, job advertisements for “new graduates” increased by 28% between November 2024 and October 2025. At the same time, employers are prioritizing applied skills over academic background, with references to ‘data analysis’ increasing by 42% and mentions of ‘automation’ increasing by 4% over the same period.

This signals a broader move into “new collar” roles, with early career professionals expected to bring basic fluency with AI-enabled tools and digital workflows. Candidates who can demonstrate that they can make a real-world impact through projects, portfolios, or real-world experience have an advantage over candidates who rely solely on paper qualifications.

go ahead

What should employers do when they need new skills and can no longer use old signals? The answer is to recalibrate the hiring process, rather than rushing to hire someone with AI written all over their resume.

Employers can start by re-evaluating their qualification filters, especially for digital and technology-related roles. Beyond degree requirements, organizations will be able to evaluate candidates more holistically based on applied and problem-solving abilities.

This can start at the recruitment stage, where organizations can shortlist candidates based on relevant practical experience in their portfolio or conduct skills assessments to assess their practical abilities.

Beyond recruitment, building a sustainable talent pipeline also requires a balance between external recruitment and internal upskilling. Implementing structured learning initiatives can help your company remain resilient and improve employee retention.

Organizations can achieve this by implementing regular mentorship programs or creating rotational assessment schemes that give employees exposure to more industries and develop diverse soft skills. For smaller organizations that lack the resources for these efforts, we can offer cross-functional projects and job shadowing opportunities.

At the same time, employers need to be aware of the AI ​​bubble and its potential employment impact. The World Economic Forum’s 2025 report found that while Southeast Asian employers expect a significant skills shift to occur over the next five years, 60% are concerned that skills gaps will hinder their ability to prepare.

Rapid investment in new technology can lead to a short-term employment surge that exceeds real demand, similar to what happened with the dot-com bubble. Inflated job titles, job descriptions, or inappropriate skills assessment frameworks can lead to overhiring and weak leadership pipelines.

Employers should align titles, remuneration and career paths to verified competencies, as long as they are attractive to shareholders, not optics.

For example, companies can prioritize employees with relevant skills that will help them grow in senior roles. These employees have strong technical skills as well as soft skills to coach and manage junior team members, allowing them to drive long-term growth.

Companies that adopt evidence-based, skills-first hiring practices have greater access to talented “new collar” talent. Otherwise, you risk overlooking promising candidates with work experience and adaptability.

Skills-based hiring will become increasingly important as AI continues to reshape jobs. To remain competitive, employers and job seekers must look beyond qualifications to demonstrated ability and impact. asian technology