Skills-Based Hiring: Where Did It Go?

If you’ve browsed job postings recently, you’ve probably seen that skills-based hiring is all the rage. Often a bachelor’s degree isn’t even required—only that you have key skills.

But only one word describes how often non-degreed applicants appear to be getting hired: rarely. A new study from the Burning Glass Institute and Harvard Business School’s Managing the Future of Work program uses employment ads to track the progress of skills-based hiring. It found that from 2014 to 2023 the number of roles for which employers dropped degree requirements increased fourfold. But when they studied a sample of 11,300 of these roles, they found that the share of workers hired without a college degree grew by only about 3.5% in 2023. Extrapolating its findings across the hiring universe, the team concludes that “for all its fanfare, the increased opportunity promised by Skills-Based Hiring has borne out in not even 1 in 700 hires last year.”  

The results are jarring for the skills-based movement, which technology firms in particular have been pushing during the last few years. But for his part, David Ellis, Korn Ferry’s vice president of global talent acquisition transformation, says he’s not surprised. “There's pressure on large enterprises to transition to skills-based hiring, but they aren’t necessarily doing all the pieces of work that are required around that. You find that the chain is broken.”

One critical obstruction to change is hiring managers, many of whom remain stuck in traditional patterns, experts say. Even if degree requirements have been stripped from job descriptions, Ellis says hiring managers often are not supportive of the change.  “These managers say, ‘I'm not on board with that. I have a degree, the best performers on my team have a degree, and I want someone with a degree,’’’ Ellis says What’s more, he says, most firms’ own hiring technology struggles to properly identify candidates with the right skills.

In their study, the research team also found firms were now backtracking, to some degree, in their transition to skills-based hiring. But critics say that’s a risky path to follow in the long term, since college enrollment has been on a steady decline since 2010. There are still many roles, in areas such as AI, for which colleges can’t meet high demand on the job market. “Leaders who are more future focused continue to have a great interest in moving to skills-based hiring. They want to do it and they are figuring out how to do it,” says Juliana Barela, Korn Ferry’s vice president and general manager of recruitment process outsourcing in North America.

Barela sees skills-based hiring as a challenge in change management. There is a dichotomy between the way things have been and the new way. “So far, the change has been top-down. Now, we need to work from bottom up.” she says. “Skills-based hiring is in its infancy. There’s good intent behind it. Our focus just has to shift to execution.”

The shift will pay off, according to the researchers at Burning Glass and HBS. They report that skills-based hiring is a win-win for employees and their companies: The non-degreed new hires in their study received an average salary increase of 25%, and their two-year retention rate outstripped their degreed coworkers’ by 10 percentage points. 

Learn more about Korn Ferry's Talent Recruitment capabilities. 

Read more This Week in Leadership articles