Nearly two decades ago, more employers started requiring college degrees for positions that previously did not require one, even though the duties and responsibilities for those jobs did not change. Advancements in technology changed the nature of many positions, and while the competencies required to perform those jobs also changed, many job titles did not. To account for these changes, employers began using educational degrees and other formal markers as proxies for applicants’ or employees’ skills. This transition became known as “degree inflation.”

Currently, more than 70% of job listings in the United States require degrees, according to Fortune, but less than 50% of workers have a bachelor’s degree. As a result, the number of candidates who meet employers’ educational qualifications is shrinking, causing many organizations to struggle to fill open roles. To combat this challenge, employers have begun to embrace skills-based hiring.

What is Skills-based Hiring?

Traditionally, a candidate had to meet certain formal requirements to be considered for an open role, such as educational degrees, years of professional experience, personal referrals and other pedigree markers. Organizations used these traditional prerequisites to fit candidates to a specific job profile. As a result, the candidate who satisfied the most prerequisites typically received the employment offer.

Skills-based hiring refocuses candidate evaluation from traditional qualifications to individuals’ skills and capabilities. It recognizes employees’ skills and abilities regardless of where they learned or acquired them, and it allows organizations to use skills-related data to evaluate a candidate’s ability to perform the job.

Advantages of Skills-based Hiring

Expands Talent Pool

Skills-based hiring can give employers access to a wider talent pool. By widening the scope beyond candidates with four-year college degrees or a particular amount of work experience, employers can find workers with skillsets that better fit their open positions.

Improves Workplace Diversity

Employers using skills-based hiring often receive a larger, more diverse pool of candidates, leading to a more diverse workforce. Skills-based hiring can also expand an organization’s talent pipeline and advance diversity, equity, inclusion and belonging initiatives.

Focuses on Qualifications

Even when a candidate has an educational degree and experience, there’s no guarantee they’ll be a good fit for the role or meet employer expectations. Consequently, skills-based hiring can be a more direct path to finding qualified candidates because this approach attempts to emulate the actual work experience of the position for which a candidate is being considered.

Implementing Skills-based Hiring

Switching to skills-based hiring requires organizations to change not only who they hire — but also how they hire. This is a significant shift that may require the assistance of an experienced Talent Solutions team that can help you redefine existing processes, establish goals and measure progress.

Additionally, while organizations may have success with skills-based hiring for one or two roles, scaling skills-based practices across an entire organization can be extremely difficult. It’s best to put this complex process in the hands of talent professionals who have a track record of successfully implementing a skills-based hiring approach.

Consider Skills-based Hiring in 2025

Skills-based hiring can be an effective way to find qualified candidates that meet your organization’s needs, and help you build a skilled and adaptable workforce that fosters growth. To learn more about implementing a skills-based hiring approach, connect with CBIZ Talent & Compensation Solutions today.