The logic of skills-based hiring is unimpeachable. Talent is scarce, and progress in boosting workforce diversity remains sluggish, so it makes sense to cast as wide a net as possible when hiring. The obvious way for companies to do that is to stop requiring a college degree for many job postings — a practice that, according to a 2023 Census Bureau report, eliminates almost two-thirds of workers from consideration and affects Black and Hispanic workers disproportionately.
Recognizing this, many CEOs have now committed to eliminating degree requirements from their job postings. But we’ve recently conducted research that suggests there’s a big disconnect between what job ads say and what employers do. We found that during the past decade the number of job postings that once required college degrees but no longer do has jumped fourfold. For every 100 of these postings, however, fewer than four additional candidates without degrees were actually hired.
This is not a question of bad faith. We have no doubt that when companies have changed their policies, they’ve done so because they sincerely hope that removing degree requirements will help them access new sources of qualified and diverse candidates.
The problem is that most think that what they need to do to bring about change is to stop doing what they’ve been doing (reflexively demanding a college degree when one isn’t needed) rather than to start doing something else (launching new practices that would advance more expansive, equitable recruiting).
It’s an old story. In the corporate world, regulators seek to curb abuses, but some players find ways to circumvent the new rules. So, too, with skills-based hiring. Executives revamp hiring policies, but thousands of hiring managers find ways to think and act the way they always have.
The inertia isn’t exactly surprising: There is no way of ensuring that a job candidate will succeed in a new role. In the absence of effective screening tools, managers have come to rely on the bachelor’s degree, both as a proxy for a candidate’s capacity to learn and grow into a new role and as an easy way to cull the applicant pool.
Today, jobs in health care and information tend to have relatively few college-degree requirements. That’s because clear and well-established certifications exist in these industries that are accepted in lieu of academic degrees. Hiring managers know that a candidate with a Security + certificate has a basic knowledge of cybersecurity, and that one with a CISSP knows even more. In making their hiring decisions, managers in these industries can therefore often rely on these sorts of certification instead of making inferences based on a bachelor’s degree.
But most occupations lack such certifications. Without practical guidance on how to evaluate a candidate’s skills, many hiring managers will naturally continue to use degree attainment as a convenient means for sorting through applicants and distinguishing among the final candidates, regardless of what their job ads actually require. But our research suggests that they’ll pay a price for doing so: Hires without degrees, we’ve found, are 20% more likely to remain at their firms than their college-educated peers.
Six Practical Steps
Until the day that managers have proven means for evaluating skills — and that day may never come — there are six practical steps you can take to give your managers the tools to make skill-based hiring a reality:
1) Celebrate success and show your hiring managers what is possible.
When it comes to motivating people, one anecdote is worth a thousand facts. Companies need to celebrate their successes in skill-based hiring, holding up examples of hires that show the process in action.
One of the best ways to do this is to start at the top. Companies such as Dell and Grainger bring attention to leaders throughout the organization who rose from the ranks without a degree. Success stories like these are important in shaping corporate culture and in giving hiring managers license to consider a wider swath of talent.
2) Reverse-engineer success.
Study those success stories carefully, because they contain indicators of a candidate’s potential for high achievement. Are there commonalities in their backgrounds or prior work histories? What roles were they initially hired to fill? What course did they travel to higher positions? Did they share common work, training, or professional development experiences? Comcast has asked itself such questions, analyzing its entire workforce to identify the skills most critical to success in each role.
It’s also important to see if specific units within the organization stand out for their skills-based hiring. Are there units or functions that consistently hire and develop workers without college degrees? Are there individual hiring managers or supervisors with particularly distinguished records of cultivating such talent? If you can identify patterns, you can seek to replicate them.
3) Define requirements and identify acceptable evidence.
When Walmart sought to implement a skills-based approach to hiring, the company started by drawing up new job descriptions that accurately defined the skills needed to perform the job — instead of merely tinkering with existing descriptions. The goal is to describe the skills needed to succeed initially, not those that would just generally be “nice to have” or those only developed through considerable on-the-job experience. Those “nice to have” skills can easily obscure what really matters in a job description and can scare qualified applicants away.
To get started, ask your HR managers what specific skills are necessary for new hires to be productive in the role being advertised — and when they should reasonably be expected to demonstrate those skills. Focusing on such skills is important, because some skills can be learned as employees perform the job. In particular, new hires shouldn’t be expected to have already mastered the higher-order skills associated with experienced workers.
With that information in hand, ask your HR managers to prescribe what constitutes good evidence of skill mastery. A certification? Prior work experience? Performance on an industry or company-specific assessment? All of these may serve as a better indicator of a candidate’s qualifications than a college degree and can reassure hiring managers that they’re doing the right thing in making a skills-based hire.
4) Redesign how you onboard and support skills-based hires.
Effective skills-based hiring doesn’t stop at the point of hire. Even though workers without degrees may have the right hard skills, they sometimes haven’t yet developed the social capital that college graduates have. They may have a harder time navigating the nuances of office culture, or they may not have the self-confidence to engage readily with superiors, colleagues outside their immediate unit, or customers.
Companies can help by introducing programs that help de-risk non-degreed hires, during both their initial onboarding and their ongoing integration. Accenture has taken many successful steps in this direction. The company sends new hires user-friendly onboarding materials two weeks in advance, which helps reduce anxiety and the likelihood of voluntary turnover. During the onboarding process itself, the company uses VR devices for acclimatization and for group exercises (which not only reduces classroom time but also demonstrates Accenture’s technical sophistication), and it create role-specific skills roadmaps for new workers, with progress check-ins along the way. It also forms peer support groups (gender, race) with experienced group leaders drawn from the relevant population.
5) Build experience with skills-based promotion before trying skills-based hiring.
Hiring is an exercise in risk management. A bad hire can be an expensive failure that costs at least a third of the employee’s first-year salary. Managers are understandably chary about incurring such costs. Such risks provide managers with a strong, if unstated, incentive to opt for whichever candidate seems like the safest choice, often by favoring those with college degrees and other credentials that are easily assessed and validated.
Because of these risks, it’s wise to think of promoting from within before hiring from the outside. The benefits of in-house skills-based promotion are obvious: Executives and hiring managers can much more effectively assess an incumbent worker’s qualifications for advancement because that person’s demonstrated skills, aptitude, and commitment are already understood and established. Degrees and other proxy credentials fade in importance in the face of hard data — provided that robust resources have been put in place to ready employees for ongoing transitions, as Cisco has done in what it calls its skills-based hiring journey.
The same logic applies to apprentices and participants in internships and other work-based learning programs. Companies should take steps to ensure they are surveying their lower-wage workers for candidates for advancement and that programs to help such workers gain the skills necessary to quantify for such opportunities are available and widely promoted.
6) Acknowledge that many jobs do require a college degree.
This can benefit everyone. There are many occupations, beyond those that require postgraduate degrees, for which a college education is a legitimate qualification.
Consider how IBM, a leader in skills-based hiring, handles this question. Overall, the company says it has dropped degree requirements from half of its job descriptions, and that 20% of new hires don’t have degrees. But in some areas the company has gone in the other direction: In 2017, 21% of its its IT job descriptions asked for a bachelor’s degree, but by 2021 that figure had risen to 27%. In the context of the overall decline, that’s not backsliding; it’s calibration. The company clearly weighed the evidence and decided that some of roles really are better suited to college-educated workers.
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Skills-based hiring will inevitably become an important part of corporate hiring strategies. But the path will be a winding one. Nearly two-fifths of the companies we studied have already boosted the share of hires they make without degrees by 20 percentage points. If companies across the board followed their lead, 1.5 million jobs would open to non-degreed talent — 15 times what we have seen thus far.
