Table of Contents

1. What is Skills-Based Hiring?
2. The Benefits of Skills-Based Hiring
3. How Can Employers Implement Skills-Based Hiring?

When bringing in a new hire, do you care more about where they’ve been in the past? Or about what they can do for the company in the future? The answer is clearly the latter. 

And yet, excessive reliance on degrees as a success indicator during the hiring process seems to imply the opposite. With a shift to skills-based hiring, companies can open up their applicant pool and find candidates that can help them meet their goals…while also reducing turnover. Sounds like a win!

What is Skills-Based Hiring?

There are several criteria that an employer may use when considering job applicants. Whether or not they have a relevant degree. The applicant’s experience level. Certain hard or soft skills. 

But the value of a degree is often inflated in the hiring process—especially if it’s used as a filter for an entry or mid-level role in the organization. 

In contrast, skills-based hiring is the practice of looking for applicants with the competencies necessary for the job, regardless of their education or experience. Of course, there are some roles where education and training are crucial. But for many mid-level positions, this change can create new opportunities for hard-working applicants who have all the skills—and who only lack the degree.

The Benefits of Skills-Based Hiring

Let’s start with the most basic benefit: an increased number of potential candidates. When employers set up a barrier of a certain education level or a minimum number of years of experience, they inevitably shrink their possible labor pool. After all, 62% of Americans over the age of 25 don’t have degrees!

In tough employer markets like our current post-pandemic world, there are more jobs than there are candidates to fill them. So looking at skills instead of degrees can encourage more qualified people to apply.

Further, a skills-based approach may actually get an employer better applicants. For example, a hotel looking for a new front desk manager may weed out anyone without a degree. But that could omit several experienced candidates who have the necessary leadership and hard skills that you’re looking for. On the other hand, recent graduates with very little work experience could get through your “education filter,” despite being less competent. 

Skills-based hiring can also improve diversity and inclusion. In 2019, just 29% of Black Americans aged 25-29 had a Bachelor’s degree, compared to 45% of White Americans. By removing the degree requirement and looking at skills instead, a company can open the door to a more representative workforce.

Skills-based hiring can even improve retention rates. Data from LinkedIn shows that employees without degrees stay in their roles 34% longer than those that have degrees.

How Can Employers Implement Skills-Based Hiring?

Whether it’s intentional or not, we often think of college graduates as having certain soft skills like leadership, communication, or prioritization. It’s easy to use a degree as a substitute or proxy for these abilities. 

So ask yourself: what do I assume I’ll get in a college graduate that’s crucial to success in this role? Spell these skills out in your job description to make it clear what you’re looking for. 

It can be difficult to “prove” soft skills. Demonstrating leadership qualities isn’t as simple as proving a words-per-minute typing score. But when you list out the skills you’re looking for in the job description, you lay the foundations for discussing these aptitudes in more detail in the interview. 

You should also describe how you define success in the role in your job description. When you list specific KPIs or metrics, you create a clear set of expectations for the applicant. This shifts the focus from the applicant’s past to how they’d be expected to perform in the future. 

Without the degree as a gatekeeper, sorting through resumes and deciding who to interview can be more challenging. But with a larger talent pool to pull from, it may help you to make the right hire the first time—saving you time, energy, and money in the long run.