What employers should know about skills-based hiring

"February 9, 2024 by" Bley & Zeitlin, Certified Public Accountants

Most anyone who’s ever put together a resume would probably tell you the easiest part is the very end. That’s where you put your educational degrees. However, thanks to a trend sweeping many industries, that part may be getting even easier. Why? Because many hiring organizations are no longer looking at education at all.

It’s called “skills-based hiring.” Under this approach, employers focus on candidates’ verifiable abilities, knowledge and experience applicable to some open positions rather than on applicants’ educational backgrounds.

Recent surveys

In an August 2023 post on its Talent Blog, social media giant LinkedIn reported that “those with paid Recruiter licenses on LinkedIn tend to search for candidates by their skills five times more often than they search for candidates by their degrees.” In addition, a multilingual analysis of job posts on the site revealed that many employers are more often advertising job roles unaccompanied by professional degree requirements.

Another report, conducted by student-focused data analysis firm Intelligent.com and published in November 2023, found that a perhaps astounding 45% of the 800 U.S. companies surveyed said they were planning to eliminate bachelor’s degree requirements for some of their positions this year. The survey also found that 55% of responding businesses had already removed degree requirements for some positions last year, particularly entry- and mid-level jobs.

Trend drivers

The skills-based hiring trend may catch many people off-guard — especially those who grew up being told, “Go to college and you’ll get a better job!” Its roots may lie in changing societal attitudes toward university education. The escalating price tag and high anxiety associated with student debt have many younger people rethinking whether they want to attend traditional colleges, and employers seem to be responding.

There are other reasons as well. Proponents argue that skills-based hiring reduces bias, strengthens objectivity and boosts diversity. They say job candidates are more likely to be judged on the skills they bring to the table rather than the prestigiousness of the institution of higher learning they attended.

If you’re looking for more practical reasons to follow the approach, there are those as well. Focusing on skills rather than education may result in better “job matching” — that is, aligning job listings with qualified applicants. Theoretically, and in many cases realistically, this reduces time to hire as well as boosts engagement and retention. Employees are hired to do what they do best rather than based on educational backgrounds that may not fit with what the hiring organization really needs.

No panacea

To be clear, skills-based hiring shouldn’t be regarded as a panacea that will cure any and all employment ills. Every organization, including yours, needs to develop a hiring strategy best suited to its mission, operations and job market. Nonetheless, this is a trend worth keeping an eye on. Our firm can help you measure and analyze your hiring and labor costs.