Governments and employers must shift away from relying solely on university degrees and instead adopt “skills-first” hiring systems as Artificial Intelligence (AI) and automation rapidly reshape labor markets, according to a new report by PwC Middle East.
The report argues that traditional education systems are struggling to keep pace with technological change and evolving workforce demands, with employers increasingly prioritizing verifiable skills, micro-credentials and continuous reskilling over conventional qualifications.
Drawing on findings from the World Economic Forum’s 2025 Future of Jobs report, the study says 59% of the global workforce is expected to require reskilling by 2030, while upskilling has become one of the top workforce priorities across economies at all income levels.
The report, titled “Anchoring Degrees: Accelerating Skills Policies Towards a Stackable Skills-First Ecosystem,” said the growing pace of AI adoption is shortening the lifecycle of professional skills and forcing governments and businesses to rethink how workers are trained, certified and hired.
PwC said employers are already beginning to reduce formal degree requirements in recruitment. Citing research from Harvard Business School and the Burning Glass Institute, the report noted that the number of job postings removing degree requirements increased nearly fourfold between 2014 and 2023, though many firms still continue to use degrees as a baseline screening tool.
The report proposes two frameworks, known as STACK and ALIGN, designed to help governments and businesses build what it describes as a “skills-first ecosystem” centered on stackable and portable credentials.
Under the model, workers would accumulate smaller certified qualifications over time, allowing them to adapt more quickly to changing labor market needs while enabling employers to assess verified competencies rather than relying exclusively on academic degrees.
PwC said governments should establish “skills observatories” using real-time labor market data, create digital skills wallets for workers and legislate standards to ensure micro-credentials are portable and verifiable across sectors and borders.
The report also called on employers to redesign hiring systems around competency-based assessments, invest in workplace upskilling and recognize verified micro-credentials in promotions and pay structures.
Education providers, meanwhile, were urged to collaborate more closely with employers to create industry-focused training programs and frequently update curricula to reflect rapidly changing skills demand, particularly in AI and digital sectors.
The study highlighted examples from Singapore and Gulf economies, where governments are increasingly embedding lifelong learning and micro-credentials into national workforce strategies. In Singapore, 97% of employers plan to prioritize upskilling, significantly above the global average, according to the report.
The United Arab Emirates and Saudi Arabia were also cited for investing heavily in AI and digital skills initiatives tied to broader economic transformation agendas.
Despite the shift toward skills-based hiring, PwC said degrees would remain essential for foundational knowledge, research capability and regulated professions. But it added that the “operating currency” of hiring and career mobility is increasingly moving toward verifiable and stackable credentials, especially in fast-changing industries.
