Degrees vs. Skills: A Dilemma that Grows Harder for Nearshore IT Employers

What’s the value of college degrees, really? For many IT employers, the answer is “less than we initially thought”.

In an attempt to deal with an increasingly tight job market, and realizing that they can find skilled software engineers outside the pool of college graduates, many IT companies have accelerated the stripping down of degree requirements in their job openings. 

The trend was described in a recent report by The Burning Glass Institute and can be seen in the hiring practices of major US tech companies such as Google, Apple, Accenture, Microsoft and IBM. The latter stated in January of last year that it had stripped degree requirements in about half of its tech job openings in the US and that it had begun “reevaluating our roles to prioritize skills over specific degrees.”

“[At Bellatrix] we never asked for a formal degree. We always relied on exams”—Luis Robbio, CSO at Egg Cooperation

A similar trend can be seen in the Nearshore. Clothing Company Express, for example, launched a recruiting campaign for its new tech site in Costa Rica. The company is looking for data engineers, mobile developers and the like, hunting for prospects with a bachelor’s in Computer Science or “an equivalent combination of course work and job experience”. In contrast, it requires a bachelor’s for its HR Manager position, going as far as listing an MBA as a preferred qualification. 

The debate grows hotter in the tech world as the job market keeps tightening. And in the Nearshore, the topic has another angle. Even though the region has benefited tremendously from the willingness of IT firms to hunt for talent outside their home turf, some experts fear that, in an attempt to capitalize on the rising demand, the Nearshore tech ecosystem could grow complacent and stagnate. 

Urged by the Crunch

One of the main drivers behind the disregard for degrees in tech hirings is a low supply of talent in the face of increasing demand for tech services. Governments, universities and companies throughout Latin America and the Caribbean are doing what they can to produce as many engineers and programers as possible, but the process is too slow for the pace of the industry.

“[At Bellatrix] we never asked for a formal degree. We always relied on exams. This confirms our focus on skills instead of degrees”, commented Luis Robbio, Chief Sales Officer at Egg Cooperation and former CEO of Bellatrix Software. “Truth be told, at least in Argentina, careers have grown terribly long and lost adaptability to the changing landscape in tech. People aren’t making it on time”. 

Robbio is himself a formally-educated engineer. Nevertheless, he said that his college education could have taken half the time without missing out on industry-relevant skills. Besides, he added, “someone without a degree can acquire [knowledge] throughout his career because he’s in an environment that pushes for that.”

Indeed, IT firms have grown more willing to take the matter of education into their own hands. Google, for example, is famously pushy when it comes to the upskilling of its engineers, especially in high-skill areas such as cloud computing and AI. Other companies have launched internship programs with universities in an attempt to secure and accelerate the flow of engineering graduates.

There’s also a camp that argues in favor of skills over degrees from a socio-economic angle. Latin America and the Caribbean are infamous for their high levels of disparity when compared to other regions in the world and even within its own borders. Quality higher education can be unattainable for the less fortunate among its population, which shuts down their hopes for an education in tech and the opportunity for a better life.

“In order for the industry to push back against the talent gap, and to provide young folks with better employment options, we should start opening the hiring scope, lowering those filters –sometimes explicit, sometimes implicit– a bit,” argued Alberto Peniche, Mexico Country Director for the International Youth Foundation (IYF). “This will give visibility to those sections of the population that don’t have a bachelor’s degree, that are not college engineers, but who also have a lot to offer”.

“We must also look at recruitment strategies in other countries, where they’re not necessarily looking for engineering graduates to fill entry level positions. Here [in Mexico], we’re still trapped in our elitist bias when it comes to recruitment mechanisms,” he added.

“Here [in Mexico], we’re still trapped in our elitist bias when it comes to recruitment mechanisms”—Alberto Peniche, Mexico Country Director, IYF

Adam Fenton, Co-Founder and CTO at Nolte, agrees, arguing that lowering the bridge for non-graduates could help the efforts to build a more diverse talent pool.

“I think software engineering is a practical skill, not academic,” he commented. “If someone has the skills and experience you need, then their educational background isn’t really important. I think this is a more inclusive approach that will help build more diverse teams.”

Aim Higher

While going for skills over degrees might ease the IT talent crunch in the Nearshore and open up opportunities for a segment of its population without access to college degrees, some experts in the field fear that that approach might neglect the development of skills which are more theoretical, specialized and hold a higher market value.

“There are instances in which having a formation in sciences or systems engineering provides great value,” said Andres Vior, Secretary at Buenos Aires’ IT Pole. “The creation of complex data structures, mounting distributed architectures, synchronizing processes and algorithm optimization are a few examples in which an organized thought structure and a solid theoretical basis makes a significant difference.”

Vior understands the forces behind the trend of skills over degrees. For that reason, he added, “one has to consider every necessity or specific role in order to identify if, given the current talent shortage, added requirements are justified.”

“One thing that definitely needs to happen is bringing back the importance of traditional education, higher education”—Ashish Patel, CEO at Simpat Tech 

Some companies are doing what they can to deal with the low supply of tech talent while advocating for college degrees. Simpat Tech, for example, is betting hard on low-code/no-code systems to fill some of the talent gaps. Yet, its CEO, Ashish Patel, has stated that he still believes in the value of “traditional education”. 

“One thing that definitely needs to happen is bringing back the importance of traditional education, higher education. We see a lot of folks abandoning that to go take three-month courses and try to enter the workforce”, he said in a Q&A with NSAM back in Nexus 2022. “That hasn’t brought that much luck for us. We need more folks going through that process in the technology field.” 

The issue could grow beyond the problems of a bunch of companies. Some experts believe that, in the face of a growing demand for more specialized tech products and services, and as the global landscape turns more competitive, the Nearshore should focus on upgrading its talent pool.

The risks of not doing so have been pointed out by executives in Jalisco’s tech ecosystem, one of Mexico’s most long-standing and refined. If the region grows complacent with its current model of low cost for middle-skill labor, it could fall in the same traps that befell the Mexican manufacturing industry.

Although he finds himself in the skills over degrees camp, Fenton recognizes the value that a better understanding of computer science can bring for individuals and the regional ecosystem. Then again, he added, skills such as deeper knowledge of algorithms can be learned outside the academic halls.

What the Future Holds

The report by The Burning Glass Institute expects that the skills over degrees trend “may endure for a time, if not become permanent” for middle-skill jobs and some higher-level ones as the job market tightens even more for tech. 

The trend might accelerate if industry giants keep on with it, turning it into the norm and forcing competition to play catch-up. IBM and Accenture are already moving faster towards stripping degree requirements from their job postings. Apple and Google still favor college-educated engineers for the most part, but they’re also refocusing their hiring practices, according to the report. 

While companies and employee prospects might benefit, the trend could deliver a hard blow against higher-education institutions and other skill providers. These “need to innovate by partnering with leading employers, introducing more hybrid and work-based learning programs and developing platforms to share curriculum with other institutions if they hope to avoid falling further behind the state of the art in jobs that are founded on digital technology”, the report points out.

Also, they need to incorporate social and soft skills into their teaching programs, given the growing relevance of these in the industry.