Did you know that nearly two-thirds of U.S. workers are excluded from job opportunities due to degree requirements? Skills-based hiring is here to help break down those barriers. This hiring strategy is a growing trend that abolishes the requirement of qualifications like university degrees in favor of skills possessed by the candidates. Endorsed by both private sector leaders and government initiatives, this approach is transforming hiring practices by opening doors for a larger pool of qualified talent.
What is Skills-Based Hiring?
Skills-based hiring is exactly as it sounds. It is a hiring strategy centered around the technical and soft skills needed to perform a job effectively, rather than relying on college degrees or "X" years of experience.
This strategy requires a thorough understanding of the skills necessary for the position and the ability to assess those skills during the hiring process. This could include technical proficiencies, problem-solving abilities, communication skills, or adaptability—whatever the role demands.
Why Are Employers Embracing Skills-Based Hiring?
Removing degree requirements and focusing instead on skills gives access to a more diverse range of candidates. This includes people who have gained expertise through paths like apprenticeships, boot camps, or self-directed learning. Degree requirements can exclude talented and capable individuals from underrepresented groups who may not have had access to higher education. According to the 2023 Census Bureau, nearly two-thirds of workers are disqualified from jobs due to degree requirements, with Black and Hispanic candidates being disproportionately excluded. Skills-based hiring levels the playing field, making opportunities more inclusive.
Many industries have been facing critical skill shortages. Skills-based hiring allows employers to target candidates with the exact capabilities needed to fill those gaps, regardless of any formal educational background. Government initiatives, like the U.S. Department of Labor’s "Skills-First Starter Kit," advocate for skills-based hiring as a way to build stronger workforces, sooner.
“Our Starter Kit provides the blueprint for employers to take concrete steps to begin skills-first hiring and provide economic opportunity for workers who face barriers – not because they are not highly skilled – but because of where they attained those skills.”
-Acting Secretary of Labor, Julie Su (2024)
Although many organizations have begun to adopt skills-based hiring, actual practices often lag behind. Research shows that while the number of job postings eliminating degree requirements has quadrupled over the past decade, this change has resulted in only a marginal increase in hiring candidates without degrees. This gap highlights the need for policy adjustments and practical measures to implement equitable hiring processes.
One of the challenges is that hiring managers often default to using degrees as the requirement because reliable tools to evaluate skills are lacking in many industries. Fields like healthcare and information technology have succeeded in adopting skills-based hiring because those industries have clear and well-established certifications in lieu of a four-year degree. Other industries looking to fill hiring gaps with a skills-based strategy can follow suit by researching and establishing their own assessments or certifications that can satisfy skill requirements.
Focusing on what candidates can do, rather than how they got there, is a positive solution to the skilled labor shortage. Skills-based hiring helps employers fill roles with qualified individuals and provides opportunities to a large proportion of capable workers who have been overlooked. That is what we call a win-win.
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