Talent   //   February 27, 2024

For most companies skills-based hiring is pretty much all talk, report finds

In recent years, more companies have promoted skills-based hiring initiatives and stripped college degree requirements from their job postings to widen their talent pool and better diversify their workforces. But many are struggling to actually make good on those plans, according to a new report.

About half of employers have continued to hire the same share of workers with degrees even after removing education requirements from job listings, an analysis from the Burning Glass Institute and Harvard Business Review found. And some have even backslid, making initial progress then reverting back to their old ways. 

“They’ll go for what they think is the safe option in terms of recruitment,” said Cary Cooper, professor of organizational psychology and health at the University of Manchester.

For the report, researchers analyzed a sample of over 11,000 roles at firms to find out whether they hired a meaningful volume of new employees without degrees within two years after changing hiring requirements. They split companies into three categories: those are making real change, those that are all talk and those actually backsliding.

“They’ll go for what they think is the safe option in terms of recruitment."
-Cary Cooper, professor of organizational psychology and health at the University of Manchester.

About 20% of the companies analyzed are backsliding, with Delta, Uber and Nestle listed as some examples. Uber and Nestle did not respond to requests for comment, though a Delta spokesperson said in an email statement that the company “hired an unprecedented number of employees as we recovered from the pandemic, and our numbers will look different during that hiring period than previous years or later ones as (we hope) to never have to hire at that volume again at one time.”

They added, “although this data is not a trend we’re seeing in aggregate at Delta, we do believe in progress over perfection – as we understand creating an equitable business for all is an ongoing journey that will continue to ebb and flow.”

What company is actually meeting these benchmarks?

Some of the leaders, which also account for about 20% of the companies analyzed, include Walmart, Target, Yelp and Cigna. On average they hired 18% more non-degree holding workers into roles after dropping requirements. Target, Yelp and Cigna declined to comment for this story, while Walmart pointed to its “Live Better U” program.

Through that initiative, Walmart has invested in skills-based hiring programs to help those in associate roles advance to higher levels of the organizations without needing traditional education requirements. A key way is through offering short-form certification programs, where staff are trained and learn skills in data analytics, cybersecurity, and supply chain management, among others, and they can use those credentials in place of a degree.

Ultimately though workplace experts say those making progress are likely able to do so for two reasons. First, it comes down to company culture and whether an organization is one that historically takes risks, said Cooper. “Is that organization a risk taking organization, or is it fairly conventional and fairly conservative in its approach?” Cooper said. 

More support needed for those making hiring decisions

But it’s also dependent on whether those making the actual hiring decisions at the HR or manager level feel equipped and supported in the process of hiring non-degree holders. “Some HR departments in companies are not only risk averse, but really process-driven and that this is the way we do it,” Cooper said.

“Part of this is realizing the day-to-day experience of the hiring manager,” said Rebecca Taber, co-founder and co-CEO of Merit America, an organization that provides technical training with career coaching and peer support to non-degree job seekers to help them land roles based on their skills rather than educational background.

“Part of this is realizing the day-to-day experience of the hiring manager."
-Rebecca Taber, co-founder and co-ceo of Merit America.

“I think the companies that are successful here are the ones that make sure the frontline are really bought into this. They provide accountability in terms of real goals around hiring non-degree talent, and they provide support,” she said. 

That support can include targeted training on how to identify talent differently, or partnerships with alternative providers that can provide vetted non-degree holding candidates with alternative experiences and certifications.

Ultimately today more than half of the job ads on Indeed do not list any degree requirements, according to a new report from the hiring platform. That’s compared to 48% in 2019, and it goes for nearly every sector. Degree requirement mentions fell in almost 90% of occupational groups analyzed by Indeed, though some of the sectors with the largest drops in degree requirements are project management, software development, logistic support and human resources.

Rethinking how candidates are evaluated

While the movement toward skills-based hiring is a longer-term trend, the pace has accelerated in the past five years, said Indeed economist Cory Stahle. That’s partially due to a rise in technologies that make pre-employment testing easier for companies, he said. But properly evaluating candidates on their skills instead of education is a “persisting challenge,” he said. 

In the tech industry, live assessments where candidates are asked to complete a coding assignment live are one tool employers are using to better gauge skills in lieu of a degree.

Leveraging more skills-based hiring can have a variety of benefits for employers, like boosting retention — non-degree candidates had higher retention rates than those with degrees within the first two years at their organizations, the Burning Glass report found. 

“Every month we're seeing more and more positions requiring certain skill sets with AI and machine learning. And it's not the degree that's the problem, I think it's the years of experience."
-Todd Weneck, vp of technology at LHH recruitment solutions. 

But the key benefit offered is the ability to widen talent pools, which is increasingly important today with the rapid adoption of artificial intelligence and growth for demand in those skills, said Todd Weneck, vp of technology at LHH recruitment solutions. 

“Every month we’re seeing more and more positions requiring certain skill sets with AI and machine learning. And it’s not the degree that’s the problem, I think it’s the years of experience,” Weneck said. Upskilling programs like those at Walmart are one way for companies to get ahead of this, he said. 

But ultimately, “If companies really want to outwardly say they’re not requiring a degree and then act on it, and deliver that, the communication has to go all the way down to the hiring official,” he said.