From Credentials to Competencies: The Skills-First Future
The traditional résumé—topped with academic degrees and prestigious alma maters—is losing ground. In its place, a new hiring paradigm is emerging: one that prioritizes skills, competencies and real-world experience over formal education. Major employers like IBM and Google have already dropped degree requirements for many roles, and a 2024 report from Harvard Business School and The Burning Glass Institute found that the annual number of roles from which employers dropped degree requirements almost quadrupled from 2014 to 2023.
For HR leaders, this shift is a tectonic change. To understand the full implications, we turned to members of the Senior Executive HR Think Tank, a curated group of talent strategists, HR consultants and organizational change experts. Together, they offer a nuanced view of how this shift is reshaping recruitment, retention and workforce development.
Why Skills-Based Hiring Is Gaining Momentum
According to the US Census, about two-thirds of the US population lacks a college degree, a common job requirement, but skills-based hiring levels the playing field, unlocking access to roles for candidates who’ve gained competencies through nontraditional paths—think coding bootcamps, apprenticeships or years of on-the-job experience.
“Skills-based hiring democratizes opportunity and accelerates workforce agility.”
Michael D. Brown, Senior Managing Partner at Global Recruiters of Buckhead, explains, “It democratizes opportunity, broadening the talent pool beyond traditional degree-holders and enabling companies to quickly address critical skill gaps with candidates possessing demonstrable competencies.
”Similarly, Britton Bloch, VP of Talent Acquisition Strategy at Navy Federal Credit Union, shares that this approach “can lead to a more diverse and inclusive workforce by removing barriers for underrepresented groups, including those from nontraditional educational backgrounds.”
Potential Pitfalls: What HR Leaders Must Watch For
While the move away from degree requirements can be liberating, it’s not without risk. One concern is that employers will shift from viewing specific degrees as the be-all and end-all of hiring requirements to now viewing specific hard skills as the be-all and end-all. This could lead to the overemphasis on hard skills at the expense of softer, less tangible traits like leadership, communication and emotional intelligence.
“We must assess both technical and soft skills to build high-performing teams.”
“Skills-based hiring typically focuses on hard or technical skills,” notes Bloch, “but soft skills such as emotional intelligence, collaboration and leadership are just as critical for long-term success.” She recommends using pre-employment assessments that are validated and legally defensible to ensure a comprehensive skills profile.
Michelle Arieta, Principal Consultant at Polaris Pathways, adds that “while degrees are certainly not dead, prioritizing skills over degrees often creates the opportunity for a more diverse talent pool where candidates from marginalized segments now have opportunity.” However, she warns that despite the rhetoric, “62% of employers still require a degree for even entry-level jobs,” referencing a 2022 report from Cengage Group. For Arieta, a culture of continuous learning is vital if organizations want to maintain relevance in a skills-first world.
From Hiring to Development: Bridging the Gaps
Caitlin MacGregor, CEO of Plum, underscores the importance of long-term alignment between recruiting and talent management: “There are plenty of examples of companies that have decided to change how they hire, doing away with traditional methods, such as résumés, but we don’t have as many instances of what happens post-hire.” She stresses that unless HR and recruiting teams work together, skills brought in through hiring could quickly become obsolete.
“It’s not just about how we hire. It’s about how we develop post-hire.”
Ulrike Hildebrand of Pin-Point Solutions adds depth to this view, observing that “degrees do not consistently indicate essential attributes like initiative, problem-solving acumen and independent work management—qualities vital for immediate workplace contributions.” For her, evaluating practical experience and a candidate’s capacity to adapt and grow is more reliable than formal credentials alone.
What Skills Matter Most? A Framework for Evaluation
To guide more effective hiring decisions, Chandran Fernando, Founder of Matrix360, recommends focusing on four core attributes: “effective communication, collaboration, conscientious thinking and compassion for learning (innovating) and doing.” He believes organizations must move toward a model where these attributes are not only identified but measured consistently against role-specific responsibilities.
Brown and MacGregor both reinforce the importance of internal development. Brown emphasizes that “HR leaders must implement objective skill assessments, establish transparent career progression pathways and provide equitable access to upskilling opportunities.” MacGregor agrees, noting that without a robust strategy for internal mobility, “the skills will fall into obsolescence almost as quickly as they enter the organization.”
Case Studies and External Research
- A Deloitte study found companies that embrace skills-based models are 63% more likely to achieve results faster and 98% more likely to retain high performers.
- IBM’s shift to skills-first hiring resulted in more diverse applicants, including a 63% increase in underrepresented applicants. Almost 20% of their US workforce doesn’t have a degree, and IBM’s vice president of global workforce policy, David Barnes, notes that “We believe in the model. It’s working.”
- Cengage Group reports that while many companies are embracing this model, a majority still rely on degrees—indicating a lag between policy and practice.
Takeaways for HR Leaders Considering Skill-Based Hiring
- Develop Competency Frameworks: Define the critical skills needed for success in each role—and ensure assessments measure them fairly.
- Use Validated Assessments: Incorporate tools that evaluate both hard and soft skills. Ensure they are legally defensible and free of bias.
- Invest in Internal Mobility: Build systems to track and grow employee skills after hire. Encourage career evolution, not just job filling.
- Support Upskilling: Provide access to micro-credentials, mentorships and flexible learning options.
- Bridge TA and HR: Align talent acquisition (TA) and human resources (HR) strategy to create a continuous feedback loop between hiring and development.
- Track Impact Metrics: Monitor changes in retention, diversity and performance post-hire to evaluate and refine your approach.
The Future of Talent: Skills-First
The shift toward skills-based hiring is more than a trend—it’s a business imperative. As talent shortages persist and workplace demands evolve, organizations that embrace a holistic, flexible and inclusive approach to recruitment will have a clear advantage. But success hinges on more than changing the job description—it requires rethinking how we evaluate, grow and retain talent at every stage.
The HR Think Tank makes it clear: When skills replace degrees as the gold standard, the entire employee lifecycle—from hiring to development—must adapt.
