Degrees vs Skills: Why Indian Employers in 2025 Value Skills Over Qualifications

India’s employment landscape is undergoing a fundamental transformation. The traditional value of degrees is fading as employers increasingly prioritise practical, job-ready skills. With industries driven by technology and innovation, the future of work in India is now defined by adaptability, continuous learning, and real-world competencies.

The Traditional Value of Degrees

For decades, earning a degree was the surest path to a stable career. Fields like engineering, medicine, and law were seen as direct routes to success and social mobility. However, as industries evolve, the relevance of many degrees has come under scrutiny.

For example, engineering remains one of the most sought-after programs in India, yet thousands of graduates struggle to meet the specialised skill demands of the modern tech sector — such as coding in new languages, data analytics, or cloud computing.

The Rise of Skill-Based Hiring

Across industries, employers are increasingly hiring based on practical skills and applied experience rather than academic credentials.

• Technology: Roles in AI, data science, and cybersecurity now require up-to-date technical skills beyond what traditional curricula teach.

• Business: Digital marketing, data analytics, and project management expertise often outweigh a general MBA.

• Manufacturing & Trades: Vocational certifications and skill-based training are now preferred over conventional degrees.

This marks a clear transition from qualification-based hiring to capability-based recruitment.

Data-Driven Insights

Recent reports confirm the growing importance of skills in employability:

• India Skills Report 2024: Only 51.25% of young individuals possess the necessary employability skills. Despite higher rates in states like Haryana and Maharashtra, the national figure reveals a deep skills gap.

• Mercer-Mettl India Graduate Skill Index 2025: Overall employability fell to 42.6%, with sharp declines in non-technical fields such as HR and digital marketing. Technical roles, particularly in AI and machine learning, showed slight improvement with 46.1% employability.

• Economic Survey 2024–25: Nearly 50% of graduates are underemployed, working in roles below their qualification level, while only 8.25% find jobs that match their degrees.

The evidence clearly points to a disconnect between education and industry expectations.

Bridging the Gap: New Initiatives and Solutions

Recognising the growing skills gap, both the government and private institutions have launched several initiatives:

• National Internship, Placement Training, and Assessment (NIPTA): Developed by IIT Madras, NIPTA standardises job readiness evaluation to help students align with real-world employer needs.

• Vocational Training Centres: NGOs such as the Unnati Foundation provide short-term training with assured placements in sectors like BFSI, BPO, and telecalling, helping youth in smaller towns gain employment within 35 days.

• Government Schemes: The Yuva Nidhi Scheme in Karnataka supports unemployed youth through financial aid and structured skill training to combat underemployment.

These programmes signal a shift toward competency-based education and lifelong learning.

The Future of India’s Job Market

As India advances toward a knowledge-driven economy, the need for upskilling is undeniable. According to the World Economic Forum, 63% of Indian workers will require reskilling by 2030 to meet emerging technological demands.

While degrees will remain vital in professions such as medicine and law, the job market’s future belongs to adaptable, skilled professionals. Educational institutions must reimagine curricula to match evolving industry standards, and employers should foster environments that value learning over legacy.

In short, India’s next decade of growth depends not on what people know, but on what they can do.