The Rise of Skills-Based Hiring: Do Degrees Still Matter?

In a rapidly evolving job market, the age-old question is resurfacing with renewed urgency—do degrees still matter? 

The momentum behind skills-based hiring is undeniable. According to a 2024 analysis by iMocha, 81% of employers are now adopting this approach—up from 73% in 2023 and just 56% in 2022.

As companies strive to build dynamic, future-ready teams, the focus is steadily shifting from what you’ve studied to what you can do.

An article from Forbes highlights that 90% of companies that prioritize skills over degrees report fewer hiring mistakes, and 94% say those hires outperform traditionally credentialed candidates.

Welcome to the era of skills-based hiring—where potential often outweighs pedigree.

What is Skills-Based Hiring

Skills-based hiring focuses on a candidate's practical abilities and competencies, moving beyond the traditional reliance on college degrees. Employers assess applicants based on their demonstrated skills, often through portfolios, certifications, and practical assessments, ensuring a more accurate match between job requirements and candidate capabilities.

The Driving Forces Behind the Shift

Several factors contribute to the rise of skills-based hiring:

• Widening Talent Pools: A study by the National Association of Colleges and Employers (NACE) found that nearly two-thirds (64.8%) of employers are adopting skills-based hiring practices for new entry-level positions, broadening the spectrum of potential candidates.
• Addressing Skills Shortages: In sectors like technology and manufacturing, there's a pressing need for specific skills. By focusing on competencies, employers can identify candidates who possess the necessary abilities, regardless of their educational background.
• Enhancing Diversity and Inclusion: Skills-based hiring can promote a more diverse workforce. For instance, removing degree requirements has been linked to increased opportunities for underrepresented groups, including women and minorities.
• Technological Advancements in Assessment: Modern tools and platforms enable employers to effectively evaluate candidates' skills through practical assessments and simulations, facilitating a more objective hiring process.

The Current Landscape

Companies across industries are rethinking hiring criteria to attract more diverse, qualified candidates. Tools that support practical evaluations are becoming standard in the recruitment process. Even traditionally degree-dependent industries are re-evaluating their criteria in light of evolving job demands.

Recent data underscores the momentum of skills-based hiring:

• Reduction in Degree Requirements: A survey revealed that 45% of companies plan to eliminate bachelor's degree requirements for certain positions in 2024, continuing a trend from the previous year.
• Employer Preferences: An overwhelming 80% of employers now prioritize experience over education when evaluating candidates, highlighting the growing emphasis on practical skills.
• Assessment Practices: Approximately 66% of employers incorporate test assignments during the hiring process to evaluate candidates' real-world skills.

Do Degrees Still Matter?

While the emphasis on skills is growing, degrees continue to hold value in certain contexts:

• Regulated Professions: Fields such as medicine, law, and engineering often require formal education and licensure, making degrees indispensable.
• Foundational Knowledge: A degree can provide comprehensive theoretical understanding, which, when combined with practical experience, can be highly beneficial.
• Signalling Commitment: Completing a degree program can demonstrate perseverance, discipline, and a commitment to personal development.

Adapting to the Changing Landscape

For Candidates

• Develop and Showcase Skills: Engage in continuous learning through online courses, workshops, and certifications. Build a portfolio that highlights your competencies.
• Seek Practical Experience: Pursue internships, freelance projects, or volunteer opportunities to gain hands-on experience.
• Stay Updated: Keep abreast of industry trends and emerging skills to remain competitive.

For Employers

• Revise Job Descriptions: Focus on the skills and competencies required for the role rather than defaulting to degree requirements.
• Implement Skills Assessments: Utilize practical tests and assignments to objectively evaluate candidates' abilities.
• Promote Inclusive Hiring Practices: By valuing skills over credentials, tap into a broader and more diverse talent pool.

The shift towards skills-based hiring reflects an evolving understanding of what truly drives success in the workplace. While degrees remain valuable in specific contexts, the ability to perform and deliver results is increasingly taking center stage. Embracing this approach benefits both employers and job seekers, fostering a more inclusive, competent, and adaptable workforce.