Universities focus on grades, employers do not

Throughout students’ undergraduate studies, and likely secondary school before that, there is a strong focus on course grades both by the student and by the instructors. Universities heavily rely on grades, necessarily, both as a measure of learning outcomes and, secondarily, a comparative metric of student understanding and skills. Students with above-average grades are sometimes rewarded with scholarships, Dean’s List mentions, and offers for graduate studies. Students with below-average grades are increasingly offered supports and additional learning opportunities, but sometimes find themselves on academic probation or even failing out. From the university perspective, grades are not the only measure, but they are the primary performance metric used for student learning.

After years in an undergraduate program, you eventually graduate and, in my experience, something quite profound happens almost overnight. Once you start your first job (for me even before that, after accepting a job offer), grades stop mattering. From the moment I stepped on-site and started my onboarding, my undergraduate GPA, my grades in individual courses, even the few term distinction awards I received did not even merit a second thought. My employer and other employers did not ask, not once, about my grades in any way. Personally, I was very focused on grades during my undergraduate studies, which made it even more surreal and more than a little stressful to transition to the workplace where skills and outcomes mattered more than credentials and past achievements. It is not that nobody cared, it was that past academic performance never entered my mind. Many of the concepts learned and skills gained during my undergraduate studies, however, were valued and relied on for my success in the workplace.

It is not just that I have been personally on both sides of this transition, but through my role as a professor at the University of Waterloo, I see this mental transition frequently and, due to the mandatory co-op required for engineering students, I see this transition happen far earlier than it did for me. I also see the constant struggle that university educators have balancing the assessment of learning outcomes, quantified through grades, with the equally important priority of ensuring that real skill is derived from achieving those learning outcomes. In a rapidly changing world, technologically, economically, and socially, this is a huge challenge that must continue to be met. In addition to all of those challenges, university educators also need to connect frequently with employers to understand, outside of the academic context where grades are quite important, what else is important in the “real world” where products are made, services are provided, and our students are employed.

What employers actually look at

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The most comprehensive data set on what employers seek in new university graduates is from the National Association of Colleges and Employers (NACE), which surveys hundreds of employer organizations annually in the United States. Their Job Outlook surveys are the closest thing we have to a systematic, multi-year record of hiring criteria for entry-level positions, including engineering hires.¹

The NACE Job Outlook 2025 survey asked employers what attributes they look for on resumes when hiring. Nearly 90% said problem-solving ability. Close to 80% said teamwork. Over 70% each said written communication, initiative, a strong work ethic, and technical skills. More than two-thirds sought verbal communication, flexibility, and analytical or quantitative skills.² These are competencies, skills, not academic grades. The NACE data provides a comprehensive, historical, and frequently updated source for what employers are actually looking for in potential employees. The closest Canadian data that I could find comes from the Labour Market Information Council which analyzed almost 3.1 million Canadian job postings from 2023 and found teamwork requested in 48 percent of postings and communication skills in 39 percent, with nine of the ten most frequently requested skills being social-emotional competencies rather than occupational or technical ones.³

There is more employer data supporting this shift away from GPA as a primary screening tool. In 2019, close to three-quarters of employers (73%) reported screening candidates by GPA. By 2023, that proportion had dropped to an all-time low of 37%. The 2025 survey showed a partial rebound to 46%, and the 2026 survey shows 42%.⁴ The trend is relatively clear: GPA is still considered by employers but is of declining importance, increasingly supplemented by skills-based hiring practices. In the 2026 survey, 70% of employers reported using skills-based hiring, up from 65% the previous year. Among those employers, 71% use this approach at least half of the time.¹ Screening by GPA has not disappeared; nearly half of employers still use it, and for some career paths, management consulting, or graduate admissions, it remains a hard filter. The claim is not that grades stop mattering everywhere. It is that the direction is clear, and the weight has shifted to demonstrated capability.

Where the focus on grades comes from and why it does not translate

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Grades are still important; they are used in universities to quantify the degree to which each student meets the learning outcomes of each course, and of the curriculum as a whole. The casual description of grading as a sorting mechanism for students puts an unintended use in front of the actual one. For example, your grade in a thermodynamics course tends to reflect how well you understood the material and how effective you are at applying it to solve relevant technical problems. Research backs this up: a meta-analysis by Roth and colleagues examined the relationship between grades and job performance and found an observed correlation of 0.16, rising to roughly 0.30 after statistical correction for research artifacts.⁵ That is weaker than the relationship between work samples or structured interviews and performance, but it is not zero. Personality research points in the same direction. Noftle and Robins, across four independent samples, found that conscientiousness predicted university GPA even after controlling for high school GPA and SAT scores.⁶ The link between personality traits and academic achievement is intuitive: students who work steadily and apply themselves earn high grades because of their understanding and corresponding problem solving skills. A large meta-analysis by Credé and Kuncel, pooling over 72,000 students, found that study habits and skills rival standardized test scores as predictors of GPA, and that study motivation shows the strongest relationship with performance.⁷ Read together, the picture is straightforward. Grades are earned through steady effort and sustained understanding and they statistically relate not just to knowledge, but to the ability to apply that knowledge: problem solving. Those are the same behaviours that make someone a good engineer, an employable engineer.

So grades are important and meaningful, but employers are increasingly using them as a secondary metric in the hiring process, and the data supports this. The Public Service Commission of Canada, which operates one of the largest hiring systems in the country, reviewed the evidence on GPA as a selection tool and concluded that while GPA “can sometimes help predict job performance,” there are selection tools with higher predictive power, including tests of general mental ability, work samples, structured interviews, and job knowledge tests.⁸ The review also noted that GPA from different universities and programs is not directly comparable, that higher GPA cutoffs create adverse impacts on employment equity groups, and that GPA should never be used at the expense of stronger performance predictors.⁸ GPA is essentially a proxy; it correlates with cognitive ability, conscientiousness, and domain knowledge, but those are the actual predictors of success in the workplace. Employers care about those things more and are increasingly trying to assess them more directly.

What I see in co-op and industry hiring

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At the University of Waterloo, the Engineering undergraduate program has a mandatory co-op program where students complete between four and six co-op work terms (four months in length, sequential terms can extend to eight months at one employer) in real workplaces over a program that usually takes about five academic years. These students were not “placed” into these positions; they applied, interviewed, and received job offers. This is a stressful process, some students start interviewing for co-op jobs in their first term, and students immediately deal with the very real job hunt and associated stresses that most university students do not face until their final year of studies. There is a pretty significant upside for those who suffer through the co-op program, though. A student with a B average who has completed two solid work terms and can describe what they actually did will outperform a student with an A average and no work experience, based on my observations and discussions with employers. The NACE data mentioned earlier supports this: the 2026 intern-to-full-time conversion rate was 63.1 percent.⁹ Co-op programs mean employers do not have to guess about who can work effectively: they witness it directly for four months at a time, without making a long-term commitment.

Obviously I am biased toward co-op programs, especially in engineering: during my undergrad I took a year off between sophomore and junior years for a full-year co-op (PISCES program at CMU). My bias is even further reinforced after 15+ years at the University of Waterloo, which runs what it describes as the largest co-op program at a research-intensive university in the world, with more than 70 percent of students gaining up to two years of employment experience during their studies.¹⁰ However, based on the data there is an intuitive argument that a co-op program fills an employability gap that the standard undergraduate program and associated grades/GPA do not. Every work term results in an employer evaluation, a written assessment of how the student performed as an employee in the “real world.” While this evaluation is a “double-edged sword,” the only thing worse than below-average grades is a poor co-op evaluation. Sometimes that poor co-op evaluation might be unearned, the result of a problematic co-op supervisor or bad luck in the execution of an important project or task. Life is not fair, students in co-op programs tend to learn this sooner than others. However, a good co-op evaluation and past employer references are game-changing advantages in employability, especially in a down economy.

The countercurrent point

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If you are in engineering school right now, or considering it, here is how I would translate the evidence into action:

• Take your grades seriously but make sure the reason is the right one. Your grades should reflect your understanding of the material and your ability to apply it. Study hard and consistently, with the understanding that grades are a reflection of understanding and skills, not a performance metric to obsess over and optimize.

• Get work experience early and often. Co-ops, summer jobs, volunteer research positions, undergraduate design teams, anything that strengthens your ability to apply what you have learned and further develop your problem-solving abilities. Employers prefer to hire people they have already watched work, and their intern-to-hire conversion rate of 63.1 percent shows it.⁹

• Build evidence of the competencies employers actually seek. Problem-solving: point to a specific problem you identified and solved. Teamwork: describe a project where your contribution depended on others and theirs on yours. Written communication: keep your best technical reports and learn to write clearly. Technical skills: learn the tools used in your target industry. These are the things that go on a resume and come up in interviews, and they are the things the NACE data shows employers are looking for.²

The countercurrent career path does not involve ignoring grades, especially not to excuse poor performance when you know you could do better. Grades matter, but in the sense that they are evidence of understanding and applied problem-solving ability, which employers value indirectly and graduate schools value directly. Do not make the mistake of treating the grade itself, rather than the understanding it is supposed to represent, as the goal during your studies.

Footnotes and references compiled with an open-weight AI model.