POV: Why it’s time to launch a tech hiring revolution

From banking to manufacturing, from retail to services, as digitization advances, all companies—and not just the familiar stalwarts of Silicon Valley—are becoming tech companies. To fill their technology-related positions, however, employers must overcome a critical challenge: The first rung of the tech job ladder is broken.

In every country, across every industry, companies say they are unable to find the entry-level talent they need. At the same time, despite the compelling need to widen the talent pool, vast swathes of the population—women, historically underrepresented ethnic groups, those who lack the right degree—remain shut out of what is still largely a male and college-educated domain.

Casual readers of the media, especially in the U.S., might think two trends are riding to the rescue here. A move to embrace skills-based hiring is sweeping through big companies, blare the headlines. More lately, the rapid rise of AI, which everyone agrees is set to change everything, will also completely reshape traditional recruiting and hiring practices.

Not so fast. The truth is, while change may indeed be coming, it’s coming far too slowly. As a global nonprofit that trains and places learners of all ages into careers that were previously inaccessible, we witness tech’s pipeline problem firsthand, every day. Looking more broadly, a recent survey we launched of thousands of job seekers and employers across eight countries offers at least three reasons why we believe it’s time to launch a true revolution in tech hiring practices.

First and most troubling, our survey found that a majority of employers have actually moved to tighten restrictions around hiring in the past three years: 61% told us that, in a quest for efficiency, they have imposed either new work experience or new degree requirements, or both, on their starter tech jobs.

Second, this has become a global challenge. Employers in middle income countries—Brazil, Mexico, and India in our survey—have become even more reliant on degree-based and work experience hiring for entry-level tech roles than their rich country counterparts. Nearly 70% of employers there said they now require a university degree plus work experience, versus 45% in wealthier nations.

Third, our data underscores why the case for change is stronger than ever. The evidence comes from the 24% of employers in our survey who report they no longer rely on specific degrees or work experience. Instead, they dropped those requirements entirely and turned to a combination of “demonstration-based” assessments, which include certification programs, technical interviews, and other tools. Nearly 60% who did so saw an increase in the number of applicants, with far greater diversity. Better still, redefining standards imposed no performance trade-off. Quite the contrary. Fully 84% of this pioneering minority reported that the people they hired for entry-level roles after changing their processes performed as well or better than individuals hired using the traditional proxies for job fitness—degrees and prior experience.

What, then, is holding so many companies back? As economist John Maynard Keynes once observed about institutional change: “The difficulty lies not so much in developing new ideas as in escaping from old ones.” For many employers, choosing to try to make that escape will take more than the kind of powerful data our survey delivers. It will also require greater clarity about how these ideas work in practice.

We don’t pretend to have the full recipe yet, but some early ingredients, we believe, include relying on certifications and other skills-based proxies to screen for candidates, using technical assessments to move them along the funnel, and fostering more diverse hiring teams to minimize the role that hidden bias can play in the final interview stage. In coming months, we hope to learn more by forming a global coalition of companies to test and share ideas on how best to rewire the hiring process.

For companies, for future employees, for all of us, the stakes could not be higher. As the world continues to be reshaped by rapid technological change, societies are going to need every segment of the population to participate fully in their future tech labor force in order to thrive. We have to get this right. And it all starts on that very first rung.

Mona Mourshed is the founder and CEO of Generation.