The future of graduate employability depends on making skills visible

For years, debates about graduate employability have revolved around one question: does a degree still matter? According to the Organisation for Economic Co-operation and Development (OECD), that is no longer the right question.

In June 2026, the OECD published a report, titled A Skills-First Labour Market, that argues that advanced economies are moving away from seeing qualifications as the primary signal of capability. Instead, employers are placing increasing value on evidence of specific skills – what people can do, rather than simply what they have studied.

The UK is among the countries leading this transition. Alongside Australia, France and Sweden, it ranks among the OECD's most advanced economies in developing the infrastructure needed for a skills-first labour market. But the report is careful to make one point clear: this is not about replacing degrees. It is about making the skills developed by those degrees easier to recognise, compare and trust.

The challenge comes at a time when employers are struggling to find the talent they need. According to ManpowerGroup's 2025 UK Talent Shortage report, 76 per cent of UK employers have difficulty filling vacancies because candidates lack the required skills. The OECD argues that the problem is not only one of shortages. It is also one of visibility.

People acquire skills throughout their careers – at university, in the workplace, through professional training and increasingly through short-form learning. Those capabilities are often recorded across transcripts, CVs, certificates and workplace records, leaving employers to piece together an incomplete picture of what candidates can offer.

To address that problem, governments are investing not only in education itself but also in the infrastructure that connects learning and employment.

The OECD highlights the UK's Standard Skills Classification and UK Skills Explorer as examples of a common skills language capable of connecting occupations, qualifications and learning pathways. Rather than relying solely on job titles or degree classifications, these frameworks create a more consistent way for employers, education providers and learners to describe capability.

The same thinking is beginning to shape funding policy. England's Lifelong Learning Entitlement, due to launch in 2027, will allow eligible learners to access the equivalent of four years of tuition funding that can be used flexibly across modules and providers during their careers. Similar initiatives already exist elsewhere, from Singapore's SkillsFuture credits to Individual Learning Accounts across the EU.

For Simone Ravaioli, senior director of global learning ecosystem at Instructure, these policies point to a much broader transformation in how learning is recognised across working lives. “We've spent years talking about lifelong learning,” he says. “The next phase is lifelong recognition. People need ways to demonstrate skills wherever those skills were acquired – whether at university, at work or through professional development – and have them recognised throughout their careers.” The OECD suggests that building this recognition infrastructure is just as important as expanding access to education itself.

That matters particularly in fast-moving sectors. Research cited in the OECD report found that between 2018 and 2023 demand for AI-related roles in the UK increased by 21 per cent as a share of online job advertisements, while explicit requirements for university degrees in those vacancies fell by 15 per cent.

That does not mean degrees are losing their value. Regulated professions will remain qualification-led, and universities continue to provide knowledge, intellectual development and social mobility that extends far beyond employment outcomes. But employers increasingly want richer information about the capabilities graduates possess alongside the qualification itself.

For universities, this represents a significant evolution. For decades, higher education institutions have been the trusted issuers of credentials. Increasingly, however, employers are looking for credentials that can also communicate discrete skills, practical competencies and evidence of achievement in forms that can travel across sectors and digital systems.

“The conversation is shifting from awarding credentials to making capabilities visible,” says Ravaioli. “A degree is a powerful signal, but a compressed one. Employers can see that someone graduated; they can’t always see what’s inside – what the person can do, how it was assessed, how it maps to the role. This isn’t a move away from qualifications. It’s a move towards making the capability behind them legible.”

Making those capabilities visible requires more than new technology. The OECD report argues that this transparency will depend on shared standards, trusted data and closer collaboration between governments, employers and education providers.

It also cautions that removing degree requirements from job adverts will not, by itself, create more inclusive labour markets. Skills-first hiring only works if employers have reliable ways of recognising and assessing capability, and if learners can present evidence that is trusted beyond a single institution or employer.

That places universities at the centre of the next phase of workforce development. Preparing graduates for employment will remain essential. Increasingly, however, institutions will also be expected to help graduates explain and evidence what they know and can do throughout their careers. "The institutions that succeed won't just issue credentials," Ravaioli says. "They'll help learners build portable records of capability that remain valuable throughout a lifetime."

The UK's skills-first agenda is often discussed in terms of economic productivity and labour shortages. The OECD suggests something more fundamental is taking place. Universities are unlikely to stop awarding degrees. But as labour markets become more focused on demonstrable capability, the institutions that thrive may be those that make learning easier to understand, easier to trust and easier for employers to recognise.

In a skills-first economy, the value of higher education will depend not only on what universities teach but also on how effectively they help graduates show what their learning truly represents.

Explore Instructure’s latest report, The Future of EdTech: Building Education for the Lifelong Learner, to discover how institutions can build connected learning ecosystems that support lifelong recognition, learner mobility and graduate success.