How to Get a Job in the ‘Skills-Based Hiring’ Trend

According to recent reports and data, many companies are moving to a new form of hiring that emphasizes applicants’ skills over more traditional measures such as education or years of experience.

The share of U.S. online job postings that list a specific employment requirement has fallen by 10 percentage points to 30% in the two years through April 2024, according to data from job site Indeed.

Additionally, most job openings, or 52%, have no formal education requirement, compared to 48% in 2019, Indeed shows. Indeed’s data shows that there are university degrees have fallen in 87% of the professional groups during that time.

Also from a recent ZipRecruiter survey of 2,000 employers shows a shift towards so-called skills-based recruitment, which prioritises ‘competencies’ over traditional qualifications. Nearly half, or 45%, of employers have dropped degree requirements for some positions in the past year, and 72% now prioritize skills over certifications in applicants, according to the ZipRecruiter survey.

The trend of prioritizing a candidate’s practical skills and real-world experience over formal education appears to be “gaining momentum,” according to ZipRecruiter.

Meanwhile, hiring managers are being more explicit in job postings about the specific skills they look for in applicants, says Cory Stahle, an economist at the job site Indeed.

“We are definitely seeing a change in the way the application and hiring process works,” Stahle said.

Demand for workers rose to a record high as the U.S. economy reopened in 2021 after lockdowns early in the pandemic. Companies struggled to fill jobs due to scarce talent and intense competition for workers.

That recruitment pressure caused employers to drop out requirements for a college degree, a filter that “disqualifies” about 62% of Americans who do not have a degree, according to a recent joint study study from Harvard Business School and the Burning Glass Institute.

In addition, companies have paid more attention to equality in the workplace, the report said.

More than 70% of Black, Hispanic, and rural workers not have four-year degrees — and valuable skills can be overlooked because of the “paper ceiling,” according to Randstad USA, a staffing agency.

More from Personal Finance:
Why the minimum wage has not increased despite inflation
Hiring remains strong for low-income earners
Does the university still pay?

While traditional measures of job suitability, such as education, will likely remain important for surgeons and other professions, many employers are realizing that such qualifications are not always a good measure of job suitability, Indeed’s Stahle said.

Job seekers are taking advantage of new career opportunities that may not have been available before, he added.

There are also tangible, measurable “win-win” results of skills-based recruiting for companies and employees, such as higher retention rates among workers without a college degree and large average salary increases for such candidates, according to the Harvard-Burning Glass study.

That said, there are some limitations, such as ingrained behavior among hiring managers.

For example, about 45% of companies appear to make only a name change, with no meaningful difference in actual hiring behavior after the stated requirements are removed from their job postings, according to the Harvard-Burning Glass report.

“Change is difficult” for employers, it added.

“As the [job ad’s] The focus is on skills, but the focus of your resume should also be on skills,” Stahle said.

While skills should be “prominent” in such cases, that doesn’t mean applicants should forego traditional information, Stahle added.

They still want to provide an accurate picture of their work history and education, as an applicant’s resume can still be reviewed by a hiring manager who values ​​such qualifications, he said.

It’s not just about the resume, though: Applicants should be prepared that potential employers may administer some sort of skills test during the hiring process, although practice varies from company to company, he added.

Developing and demonstrating the identified skills are the two most important keys for job seekers, he said.