In recent years, there has been a noticeable shift in the hiring practices of many companies. Instead of focusing solely on traditional metrics such as education or years of experience, employers are increasingly prioritizing applicants’ skills and competencies. According to data from job site Indeed, the share of U.S. online job postings that list a specific requirement for employment tenure has decreased by 10 percentage points in the last two years. Furthermore, the majority of job ads no longer have a formal education requirement, indicating a move towards a more inclusive approach to hiring.
Data from Indeed also reveals that mentions of college degrees have decreased in 87% of occupational groups over the same period. A recent survey by ZipRecruiter of 2,000 employers further confirms this trend towards skills-based hiring. The survey found that 45% of employers have eliminated degree requirements for some roles in the past year, and 72% now prioritize skills over certificates when evaluating job candidates. This shift is gaining momentum and is reflected in the increasing emphasis on a candidate’s practical skills and real-world experience over formal education.
The increased demand for workers following the reopening of the U.S. economy in 2021 has further accelerated the move towards skills-based hiring. Businesses facing a shortage of talent and intense competition for workers have found that dropping college degree requirements has helped them attract a more diverse pool of candidates. According to a study by the Harvard Business School and the Burning Glass Institute, eliminating degree requirements has the potential to open up new career opportunities for job seekers who may have been previously overlooked.
There are clear benefits for both businesses and workers in adopting a skills-based approach to hiring. Companies have reported higher retention rates among workers without college degrees and significant salary increases for candidates with valuable skills. However, there are also limitations to this shift, including entrenched behavior among hiring managers. Some firms may remove stated requirements from job postings but fail to make meaningful changes in their hiring practices.
Job candidates seeking opportunities in a skills-based hiring environment should be prepared to showcase their abilities in a tangible way. While resumes should highlight relevant skills and competencies, applicants should also provide accurate information about their work history and education. Additionally, candidates should anticipate the possibility of skills tests during the hiring process, as this practice is becoming more common among employers.
The shift towards skills-based hiring represents a fundamental change in the way companies evaluate and select candidates. By focusing on practical skills and competencies, employers can tap into a more diverse talent pool and provide new opportunities for job seekers. While there are challenges associated with this approach, the overall trend towards skills-based hiring is likely to continue as businesses seek to adapt to a rapidly changing job market.