Dive Brief:
- While the demand for AI skills continues to grow, the share of AI roles that had a degree requirement is on the decline, according to new research from the Oxford Internet Institute at the University of Oxford released Tuesday and published in Technological Forecasting and Social Change.
- From 2018 to 2023, demand for AI roles grew 21% as a share of all job vacancies in the United Kingdom, while mentions of university education requirements fell 15%, the report found.
- At the same time, jobs specifying AI skills earned a 23% wage premium, generally greater than that of roles requiring degrees. Degrees didn’t command higher wages until the PhD level, at which point they brought in 33% premiums, the report found. Comparatively, master’s degrees had 13% premiums. The study analyzed about 11 million job vacancies in the United Kingdom from 2018 to mid-2024.
Dive Insight:
“The traditional path of university education leading to higher pay is no longer the default for AI professionals, who are now being rewarded for practical skills and industry-specific know-how,” said Fabian Stephany, departmental research lecturer in AI and Work at the Oxford Internet Institute and co-author of the study.
Even among college graduates, employers showed a preference for those with AI skills. A study last year published in the journal Oxford Economics Papers found that employers are significantly more likely to offer both job interviews and higher salaries to graduates with AI capital.
Specifically, men with AI skills were shortlisted for positions with wages 12% higher on average, while women with AI experience were considered for roles with wages 13% higher, the study found.
Stephany recommended education and training providers provide micro-certificates and credentials for skills acquired outside of formal education.
“A skills-based hiring approach can increase the number of potential candidates, the variety of workers’ social backgrounds and add diverse insights to the workforce,” he said. “In those areas where employers are struggling to find the right talent, attracting and recruiting candidates based on skills rather than formal education degrees may contribute to increasing the size of the talent pool and potentially, tackling skills shortages to bridge the AI talent gap.”
For skills-first hiring to work, companies need to have a clear vision, empower leaders and support their plans with a budget, according to a November report by OneTen, a coalition of companies focused on finding career opportunities for workers without four-year degrees.
Yet, despite the demand for skills, companies continue to struggle to pivot to skills-first hiring, according to a 2024 report from The Burning Glass Institute and Harvard Business School. Among companies that announced plans to focus on skills-first hiring and to remove degree requirements from their job postings, about 45% showed no meaningful change in hiring behavior, the report found.
