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Many companies are pivoting to a new form of hiring, one that emphasizes applicants’ skills over more traditional metrics like education or years of experience.
The share of U.S. online job postings that list a specific requirement for employment tenure has fallen by 10 percentage points, to 30%, in the two years through April 2024, according to data from job site Indeed.
Additionally, most job ads (52%) don’t have a formal education requirement, up from 48% in 2019, Indeed found. Mentions of college degrees have fallen in 87% of occupational groups over that time, it said.
A recent ZipRecruiter survey of 2,000 employers also shows a shift toward so-called “skills-based hiring,” which prioritizes “competencies” over traditional credentials: 45% scrapped degree requirements for some roles in the past year, and 72% now prioritize skills over certificates in job candidates.
The trend, which prioritizes a candidates’ practical skills and real-world experience over formal education, appears to be “gaining momentum,” according to ZipRecruiter.
Meanwhile, hiring managers are being more explicit in job ads about the specific skills they seek in applicants, said Cory Stahle, an economist at the job site Indeed.
“We definitely see a change in the way the interview and hiring process works,” Stahle said.
Skills-based hiring is a ‘win-win’
The demand for workers surged to a record high when the U.S. economy reopened in 2021 after early pandemic-era lockdowns. Businesses struggled to fill jobs amid scarce talent and high competition for workers.
That hiring “pressure” led employers to drop college degree requirements, a filter that “disqualifies” about 62% of Americans who lack a degree, according to a recent joint study by Harvard Business School and the Burning Glass Institute.
Additionally, companies have put more focus on workplace equity, the report said.
More than 70% of Black, Hispanic and rural workers don’t have four-year degrees — and may have valuable skills overlooked due to the “paper ceiling,” according to Randstad USA, a staffing agency.
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While traditional measures of job fit (such as schooling) will likely remain important for surgeons and other professions, many employers realize such qualifications aren’t always a good proxy for job fit, Indeed’s Stahle said.
Job seekers benefit via new career opportunities that may not have been previously available, he added.
There are also tangible, measurable “win-win” outcomes of skills-based hiring for businesses and workers, like higher retention rates among workers without college degrees and large average salary increases for such candidates, according to the Harvard study.
That said, there are some limitations, like entrenched behavior among hiring managers.
For example, about 45% of firms “seem to make a change in name only, with no meaningful difference in actual hiring behavior following their removal of stated requirements from their postings,” the Harvard report said.
“Change is hard” for employers, it added.
What this means for job seekers
“If the [job ad’s] focus is on skills, the focus of your resume should be on skills as well,” Stahle said.
While skills should be “prominent” in such cases, that doesn’t mean applicants should forgo traditional information, however, Stahle added.
They’d still want to give an accurate representation of their work history and education, since applicants’ resume may still be reviewed by a hiring manager who values such qualifications, he said.
It’s not just the resume, though: Job candidates should be prepared for prospective employers to administer some sort of skills test during the hiring process, though the practice varies from company to company, he added.
Developing and demonstrating the identified skills are the two primary keys for jobseekers, he said.
