Daybreak - Why should your degree get you a job anymore?

Episode Date: July 22, 2025

India’s job market is broken.We’ve known that for a while. But the reason why is worth paying attention to. It’s not a lack of talent.Every year, India adds millions of graduates to its talent pool. Thousands enter the workforce—freshly certified and ready to be hired.The real problem is the growing disconnect between qualification and competence.Tune in. 🎓 Are you an Indian student in the US or recently graduated? Tell us what your journey’s been like: Take the survey

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too? It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. India's job market is broken. We've known that for a while. But the reason why is worth paying attention to? Because it's not a lack of talent. Every year, India adds millions of graduates to its talent pool. Thousands enter the workforce.

freshly certified and ready to be hired. The real problem is the growing disconnect between qualification and competence. And this is a systemic issue. With the flood of applicants increasing year after year, companies simply don't have the bandwidth to assess skills meaningfully. So they end up outsourcing that judgment to algorithms. Applicant tracking systems, ATS for short, they have become the gatekeepers.

Globally, platforms like Orrin, SAP, workday and greenhouse lead the pack. In India, the market is dominated by tallio and success factors. But here's the thing. ATS isn't about merit. It's about manageability. It's less about identifying potential and more about pattern matching. And that is where pedigree steps in.

In a crowded hiring market, elite institutions act as a hedge against risk, the kind of risk that comes with a hire who just doesn't fit. That is where real skills come in. There are signs of change. A February 2025 report from Job Portal found it, found that 14% of active job listings in India no longer require a formal degree. It's still marginal, but it does signal a shift. A World Economic Forum report echoed that shift.

Nearly 30% of Indian companies are now embracing skill-based hiring, removing degree requirements altogether. But these are still the out of. You see, for most people, the shift is more rhetoric than reality. For most companies, a skill-first approach is less than operational shift and more a marketing slogan. Pedigree still reigns because overhauling legacy systems feels harder than living with inefficiencies. The cost of a few mismatched hires is easier to absorb than the effort it takes to rethink

how hiring works. So, the status quo stays up. untouched. Degrees also persist because they solve a long-standing problem. Scale. Welcome to Daybreak, a business podcast from the Ken. I'm your host Rahal Philippos and I don't chase the news cycle. Instead, every day of the week, my colleagues Nika Sharma and I will come to you with one business story that is worth understanding and worth your time.

Today is Wednesday, the 23rd of July. A bad hired isn't just a minor inconvenience. It can often be a costly mistake. Estimates suggest that it can set a company back by as much as 30% of the employee's first year salary. And that's just the beginning. Replacement costs can range anywhere from 50 to 200% of that salary. That includes direct expenses like recruiter fees and job ads, plus the added cost of onboarding and training someone new.

All of this translates to roughly 5 to 25 lakh rupees per employee, depending on their role seniority and the time. spent to replace them. A case study by executive search firm WorkSource Consultant found that a single bad hire, a project manager at a mid-sized IT company in Bangalore, ended up costing

nearly 18 lakh rupees. The fallout includes missed deadlines, employee resignations and a sharp drop in client satisfaction. And then there are the indirect costs. A poor hire is set to reduce the team's overall efficiency by up to

30%. They invariable, end up creating operational bottlenecks and slowing progress on major projects. They also end up making high-performing employees question their own place and compensation in the company. All because it confused potential with pedigree. This is a problem that the government is also cognizant of. In fact, India's public spending on education may have grown in absolute numbers, but it lags as a percentage share of GDP. Now the government plans to increase it under the national education policy.

Over the past decade, India has broadened access to higher education, setting up eight IIMs and seven IITs. That has unfortunately given rise to a whole new problem. Credential inflation, meaning degrees are multiplying, but their value is steadily eroding. But the greatest cost of the pedigree system is the talent that companies will never be able to see. Tier 2 and 3 cities end up being overlooked, but that happens to be the real gold mine. of untapped potential. Now, here's the thing. It's not like these applicant tracking systems

filtering CVs are static. Platforms like TALU and success factors regularly upgrade and offer customizations for larger clients. Just that their piece of innovation is often dictated by the needs of their biggest customers. The downside of all of this

is when just a few platforms decide how candidates get filtered and ranked, the entire hiring system starts to play by their rules. It's not really artificial intelligence, it's just the automation of old biases. Take this for instance. Nearly 60% of companies that use ATS still prioritize academic qualifications right at the first step. That's according to the state of the job search report 2025. The result? Recruitment gets stuck in a rut, unable to escape the pedigree funk enforced by its own digital gatekeepers. human potential is being sifted through flawed algorithms.

And then the same companies that built the sieve complain about the sand slipping through. It's a self-inflicted wound. But somehow, they call it a skills crisis. Then you go ahead and add AI to the mix. The technology is already shaking the ground beneath degree-based hiring. No one can deny its effects. Layoffs prevail from Microsoft to IBM. And the only way out today is to learn new skill.

and adapt. What you learned four years ago in college now has very little value, particularly when half of India's graduates are deemed employable. Put simply, India is facing a double bind. On one hand, there's credential inflation, degrees are multiplying faster than the demand for them, and on the other, there's skill deflation. What you learn today is already outdated by tomorrow. Together, those two things are quietly eroding the very foundation of degree first hiring. Stay tuned. Okay, quick break, especially if you're listening to this from a dorm in Boston or a co-working space in San Jose.

If you are an Indian student currently pursuing high education in the US, or if you've just graduated, we would love to hear from you. The Kent's new careers podcast, 90,000 hours, is working on a new episode about a question that's been weighing on a lot of minds lately. Was all of this worth it? The move, the money, the master's degree, What did it really buy you? And if you're thinking of coming back to India,

how would you even begin to make that shift work? We've put together a short anonymous survey to hear what this journey has been like for real, not the brochure version. So if this sounds like you or someone you know, please take our survey. Link is in the show notes and now back to the episode. Here's the good news.

There is a new ecosystem that is quietly rewriting the rules. The small but steadily growing group of companies don't really care as much about what you hold on paper. They care about what you do, the skills that you bring to the table. For that, we largely have to thank a new greed of ed tech companies, the likes of Maasai School and Scalar Academy. Their business models try to bridge the gap between education and skills. Unlike traditional institutions, they're not selling a certificate but a job outcome. For instance, FinTech Unicorn CRED claims to have made proof of work.

its sole screening criterion for hiring software development engineers. The company not only tests the candidate's technical knowledge, but also their ability to build the software. The test includes a 90-minute project round where candidates are asked to develop a runable code, followed by a review. HCL tech-owned Govi specializes in imparting technical education with a focus on upskilling.

Even Zirhoda, one of India's largest stockbrokers, has a hiring philosophy that actively ignores pedigree. Its chief technology officer Keelash Nad previously said that the company looks for people with the right philosophy of life and aptitude for learning. Basically, Zeroda isn't looking for someone with the right college and experience on their CVs. It wants someone who is passionate about technology.

The result of this? A near-zero attrition rate. That's hard to come by in this industry. So the path forward is no longer a choice to make, but a responsibility to own. Modifying what ATS filters for, such as portfolios, challenges and digital credentials may bridge some of the gap.

But we just aren't there yet. The fundamental question for Indian businesses is no longer should they shift to a skill first model. Rather, it's how quickly can they shift? Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings.

A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted by Rahil Filippos and edited by Rajiv Sien.