A matter of degree: University still essential for many jobs

The federal government has set a target of 80 per cent of Australians having a tertiary qualification by 2050.

Going straight from Year 12 to a good job got a whole lot easier for many in the past couple of years as employers cut their expectations in a tight labour market. Indeed, Australians who lacked any post-secondary education were the big winners from low unemployment.

But watch this space. While some white-collar bosses changed selection criteria in a desperate search for staff post-Covid, there’s little sign they have permanently dropped the degree or diploma from their list of must-haves.

School leavers who convince themselves they don’t need university or TAFE could be in for a shock as companies turn to automation, AI and offshoring of lower-level tasks, thus increasing the need for more educated and skilled workers up the line.

As former Business Council of Australia CEO Jennifer Westacott says, it’s easy for young people to downplay a degree when unemployment is at historic lows.  

White-collar recruiters say a more competitive job market in the past 12 months has made employers more selective; they want degrees plus “soft skills” like communication and the ability to work in teams. Clinton Marks, a director at the Robert Half recruitment firm, says: “If you go back 18 months, when the market was red hot, it wasn’t as if employers didn’t care (about qualifications). They did. But everything was built around speed. It was a high-growth market, and if they couldn’t get employees in and operating really quickly, then they were going to miss the boat.

“In today’s market, they’re a lot more careful. So, lateral thinking, problem-solving skills, stakeholder skills, all of those things are really, really critical right now.”

Andrew Hanson, senior director at white-collar recruiters Robert Walters, says clients still ask for degrees as well as the all-important soft skills like communication.

“It’s not to say it is not possible for people to get on-the-job training and start micro-learning,” he says. “I’m sure there are great examples of people who completely disprove the theory that you need a degree to be successful, but our experience is that employers would like to hire people (with degrees). That’s how they separate the wheat from the chaff.”

Western Sydney University chancellor Jennifer Westacott

Figures from SEEK show that while unemployment fell across the board in the post-Covid years, those without a degree or diploma gained most. Between May 2019 and August 2023, graduate unemployment fell by 0.9 per cent, but by 1.5 per cent for those with a vocational qualification and by 2.1 per cent for those with no post-school qualification.

Westacott, now Chancellor of the University of Western Sydney, says while employers’ attitude to degrees is changing, they are not giving up on higher education: “What’s changing is what they want in addition to a degree. They are interested in the workability skills that people turn up with.”

The federal government has set a target of 80 per cent of Australians having a tertiary qualification by 2050, up from 60 per cent, and Westacott argues we need to help students blend university and vocational education in the bespoke courses employers are increasingly demanding.

“When I talk to employers, what they tell me all the time is that they want students with particular kinds of skill sets, more so than just looking at the qualification,” she says. “(They say) we accept that someone’s done an accounting degree, that they know how to do accounting, we accept if someone’s done an engineering degree, they’re a qualified engineer. What we miss is people with the workability skills, the communication skills, the team building, the analytical skills.”

And it’s not that young people are dissing degrees.

Westacott says it’s more that they think that university can be too rigid: “What I think the students are arcing up about is how long it takes and the extent to which that’s the best way for them to acquire those skills.

“Young people are saying we want to do this differently, we want to be able to put our own courses together.

“This is what they do in their normal world. They curate media; they want to curate their ­education.”

She believes the need for higher education can only increase: “We know that so many things are going to be automated (and) AI is going to have this very profound impact on tasks and workflow. What does that mean for the human role? Well, it means the human role goes up the value chain. By definition that requires a higher level of competency and qualification.”

Westacott says TAFE must be better resourced so it can modernise. “The biggest risk to TAFE is that employers decide to do it themselves, because they can’t get the quality product,” she says.

Andrew Norton, professor in the practice of higher education policy at the Australian National University, says data up to 2022 is not “picking up anything major” in terms of reduced participation in higher education.

“There’s always a group of people who would rather get a job than go to uni, and if they can’t get a job, they take the uni option,” he says. “What I think we’ve seen in the last few years is some of those people have found jobs and not bothered with uni at this point. But that is really just a by-product of the strong labour market and may not persist. If the test is whether you need a degree for a professional job, I don’t think the answer has changed much in recent years; about 80 per cent of people in the 20-34 age group in a professional job have a degree.”

Norton says there is an argument for some people bypassing higher education.

“If you are in a lower ATAR band or haven’t been to uni for a while, there’s a fairly high risk if you go to uni you won’t finish your degree,” he says. “And then if you do finish, there’s another risk that you’ll end up doing a job that you could get with a Year 12 of qualification anyway – a sales job or low level clerical admin work.

“From that point of view, I think there are still reasons to be cautious about going to uni, particularly if you’ve got better alternatives in the vocational space. But if you are kind of reasonably smart and ambitious, I still think (it’s risky) not to pursue (higher education).”

Robert Half’s Clinton Marks adds a caveat: “Everybody wants to know you’ve undertaken a degree and has some level of interest in how you performed but that’s almost where it ends. You typically find once somebody has experience in any form, very quickly people are discounting the uni, even if it’s a requirement. If we present a candidate with experience against the candidate with slightly less experience with a degree you can almost guarantee they’ll prefer a candidate with more experience without the degree. It’s almost like once the very initial phase of someone’s career is over, university degrees become pretty secondary fast.”