This sound is generated automatically. Let us know if you have any feedback.
Skill-based hiring appears to be lagging behind well-intentioned aspirations, with most companies yet to make changes to reduce degree requirements or increase their share of workers without degrees; according to a February 14 report from the Burning Glass Institute and Harvard Business School.
Among the companies that announced policy changes, about 45% appeared to make a change in name only and made no substantive difference in hiring behavior, even after removing degree requirements from their postings.
“The skills-based hiring movement has gained momentum as more employers commit to removing degree requirements from their job postings, replacing the proxy of a college degree with real-world assessments of candidates’ skills,” the report says. βAn initial flurry of high-profile announcements from both private sector employers and government has become a blizzard. But do these declarations lead to a real increase in worker access?’
From 2014 to 2023, there was almost a fourfold increase in the annual number of roles where employers dropped degree requirements, the report notes. However, this did not necessarily translate into changes in the hiring process.
Among 11,300 jobs at large firms, companies increased the share of workers without a degree by about 3.5 percentage points. At the same time, this shift applied to only 3.6% of roles that dropped a requirement over this time period, meaning the net effect is a change of 0.14 percentage points in the incremental hiring of candidates without degrees.
Overall, the Burning Glass Institute and Harvard Business School estimated that the small shift translated into new opportunities for about 97,000 workers out of 77 million annual hires β or less than 1 in 700 hires in 2023.
Beyond that, progress has not been uniform among companies that have adopted skills-based policies. In contrast, almost all hiring changes occurred at the 37% of companies that removed degree requirements. Three types of companies emerged in the report:
- Skills-Based Hiring Leaders: 37% of companies are making changes and following through on their commitments, increasing the share of employees without degrees by nearly 20%.
- Last name only: 45% of companies made announcements but no real changes to their hiring practices.
- Backsliders: 18% of companies made short-term gains after dropping degree requirements, but didn’t follow through. In fact, in the long run, these companies hired a smaller share of workers without degrees.
“Our analysis makes it clear that successful adoption of skills-based hiring involves more than simply removing language from job postings,” the report says. “To hire for skills, companies will need to implement strong and deliberate changes to their hiring practices β and change is hard.”
Although the workers say that they want a skills-first approach in the workplace, employers are struggling to make the shift, according to a report by EY and iMocha. Companies with a skills-first approach focus on HR objectives such as career progression and internal mobility, but integrating skills data into the HR process can be a challenge.
In addition, employers they are not adopting skill-based hiring fast enough to meet the demands of the market, especially in the technology sectors, according to a report of the General Assembly. To fill the gap, companies are turning to internal training and non-traditional learning and development opportunities to upskill their employees.
New skills-based recruitment resources may help. The Society for Human Resource Management Foundation, for example, started a toolkit to promote a skills-based mindset in employment practices. The The toolbox has 12 action items what employers can do to improve their hiring practices and prioritize various hiring practices, including steps that support technology, job communications, and organizational changes.