India’s entry-level hiring market is shifting from academic credentials towards demonstrated capability, but degrees continue to influence who gets an opportunity to enter the workforce, according to a new report by staffing and HR services firm Gi Group Holding.
The report, based on a survey of 750 employers and 579 entry-level candidates across 12 sectors and eight cities, finds that 64% of employers say fewer than 40% of entry-level candidates clear their initial domain and skill assessments. The proportion rises to 70% among large enterprises and 74% among high-volume recruiters hiring 2,000 or more candidates a year.
Among candidates from Tier-2 and Tier-3 institutions, 49% say they feel completely unprepared when entering their first job, while only 19% say they feel fully ready. Among the 63 Tier-1 graduates included as a control group in the survey, 67% say they feel fully ready and 6% feel unprepared.
The gap between stated intent and hiring behaviour
Nine in 10 employers surveyed say a degree from a non-elite institution is no longer reliable evidence of a candidate’s capability. Half describe such degrees as “basic compliance”, while 41% consider them to have low trust or to be irrelevant. Only 9% of employers report high trust in the capabilities conveyed by a Tier-2 or Tier-3 curriculum.
Yet degrees continue to influence hiring decisions. About 35% of employers say they prefer degree holders over skill-certified non-degree candidates for routine entry-level roles, even when the candidates are otherwise comparable.
Among certified non-degree candidates who clear an employer’s assessment threshold, 31% are treated as fallback hires when degree holders are unavailable, while 11% are rejected regardless of performance because of institutional requirements.
The report describes this as a “credential paradox”: a degree may no longer be viewed as proof of capability, but it can still determine whether a candidate gets an opportunity to demonstrate those capabilities.
Limited confidence in government skilling programmes
Government-backed skilling certificates also receive limited weight from employers. The survey finds that 47% of employers assign them zero hiring weight, while 11% say they actively prioritise or shortlist candidates holding such certificates.
Among candidates surveyed, 15% identify government certificates as their most valued credential, compared with 45% who place the highest value on private or EdTech certifications.
The report also finds that 25% of participants in government skilling programmes go on to secure full-time employment with the company that trained them, while 20% report no employment impact from the programme.
Skills gaps vary by sector and geography
The reasons candidates fail employer assessments vary across sectors. In renewable energy, 68% of employers cite an inability to apply practical skills as the primary reason for rejection, followed by 58% in automobile manufacturing. In EdTech and ITES/BPO, weak soft skills are the leading concern, cited by 58% and 51% of employers respectively.
Geography adds another layer to the employment challenge. Among candidates from non-elite institutions, 39% identify the lack of local industry as a major barrier to finding jobs, rising to 49% among those from Tier-3 institutions.
The survey also finds that 81% of candidates say their colleges did not provide access to industry-standard tools or software. Meanwhile, 59% believe career progression eventually requires relocating to a Tier-1 metro, irrespective of where they studied.
Self-learning emerges as a key source of job readiness
The report finds that independent self-learning is the most frequently cited source of job readiness, with 45% of candidates attributing their preparedness to their own efforts. The college ecosystem accounts for 20%, while government- or industry-backed programmes account for 21%.
Among employed respondents, 61% say they themselves are primarily responsible for keeping their skills current, rather than their employer or university.
Sonal Arora, Country Manager, Gi Group Holding India, said the findings indicate that employability is increasingly being viewed as a continuous process of learning, reskilling and adaptation rather than an outcome achieved through a degree alone.
Former Skill Development Secretary Atul Kumar Tiwari, interviewed for the report, pointed to weaknesses in the institutional skilling ecosystem, saying fewer than seven of India’s 37 Sector Skill Councils are functioning well. He also described industry participation in the PM SETU scheme for government ITIs as disappointing in several states.
Survey design
The employer sample comprised 750 respondents across 12 sectors, with 60–66 respondents per sector. It included 253 large enterprises, 253 medium enterprises and 244 small enterprises across Ahmedabad, Bengaluru, Chennai, Delhi/NCR, Hyderabad, Kolkata, Mumbai and Pune.
