Skills-Based Hiring: A Shift From Degrees To Capabilities

Companies are ditching degree requirements and hiring for capabilities

If you’re a hiring manager, recruiter, or just someone paying attention to the job market, you’ve probably noticed a growing trend: skills-based hiring (SBH). It’s not just a buzzword, it’s a reality check for companies that are finally realizing that a fancy diploma doesn’t always equal job readiness. Yep, more companies are ditching the degree requirement and instead focusing on what candidates can actually do. Crazy idea, right?

The Reality Check: College Degrees Are Losing Their Shine

Let’s face it: The old notion that a college degree equals job readiness doesn’t hold up the way it used to. More young people are turning to trade schools and apprenticeships, rethinking whether the traditional college route is worth the cost. Employers are catching on, too, realizing that some of their best hires aren’t necessarily the ones with prestigious diplomas. Instead, they’re the folks with hands-on skills gained through bootcamps, certifications, or even tutorials on YouTube.

Take Google, for instance. The tech giant has moved away from requiring four-year degrees for many roles, favoring skills instead. Their Google Career Certificates program is a prime example. It offers training in IT support, project management, and more. Google treats this certificate as equivalent to a degree, saving the certificate earner the cost and time of traditional education while making sure they are filling roles with people who know what they’re doing from day one.

Companies Making the Shift

Skills-based hiring isn’t just talk – it’s happening across industries. IBM, one of the earliest adopters, coined the term “new collar jobs” to describe roles that value skills over formal education. By 2021, more than half of IBM’s U.S. job openings no longer required a degree. Delta Air Lines made a similar move, dropping the four-year degree requirement for many of its pilot positions. Turns out, actual flight experience matters more than a piece of paper. Go figure.

Financial institutions aren’t lagging behind, either. Bank of America’s Pathways program aims to recruit talent from underrepresented communities without requiring a four-year degree, proving that SBH can also drive diversity and inclusion. Meanwhile, Accenture’s apprenticeship program has brought in hundreds of candidates without degrees, training them on the job and setting them up for success in tech and consulting roles.

Why the Change Is Necessary

So, why is skills-based hiring gaining momentum now? For starters, it just makes sense. There’s an estimated 70 million workers in the U.S. who have skills from alternative education routes – bootcamps, military service, or on-the-job training – but lack a traditional degree. Focusing solely on academic credentials means overlooking a massive talent pool.

Moreover, companies that make the shift are seeing measurable benefits. Research shows that employees hired based on skills rather than degrees tend to stay longer and perform better. One study found that these hires had a 10% higher retention rate than those recruited through traditional methods.

Barriers and Breakthroughs

Despite the obvious benefits, implementing skills-based hiring isn’t always straightforward. Cultural resistance within organizations can slow adoption. Hiring managers accustomed to screening resumes for degrees often hesitate to change their approach. Plus, reconfiguring hiring practices to include competency-based assessments takes time and resources. Old habits die hard.

But change is coming. State governments are leading the way. Pennsylvania, for example, opened up 65,000 state jobs to non-degree holders in 2023. Private sector leaders are following suit, recognizing that the future of hiring lies in measuring potential and ability rather than pedigree.

Looking Ahead

Skills-based hiring is more than just a passing trend, it’s a practical response to modern hiring challenges. As more companies rethink their degree requirements, we’re likely to see a more inclusive, agile workforce emerge. Whether it’s tech giants like Google or traditional industries like aviation, the message is clear: Skills matter more than ever. As more companies move toward SBH, they’ll not only access untapped talent but also build more resilient teams.

The days of a degree being the only ticket to a good job are numbered. And that’s a good thing for companies, candidates, and the future of work.

Mike Wood is Talent Acquisition Analyst and Executive Community Leader at HR.com.