The secret is out: skills-based hiring in.
This is great news for career changers, bootcampers, caregivers returning to the workforce, non-traditional learners—and so on.
If you fall into any of the above categories, it’s crucial to understand skills-based hiring and its implications for you. In this article, we break it down so you can navigate this new landscape with confidence.
What is Skills-based Hiring?
Skills-based hiring is a recruitment approach that focuses on a candidate’s abilities and competencies rather than their formal education.
In other words, recruiters and hiring managers prioritize the hard and soft skills needed for a role rather than a four-year degree. Hiring professionals are looking for STARs, a term created by Opportunity@Work referring to professionals skilled through alternative routes like job training programs.
Why are Employers Focusing on Employee Competencies?
Why do recruiters hire STARs?
Simply stated, skills-based hiring is good for business.
One of the key benefits of skills-based hiring is that it broadens the talent pool by removing degree requirements, allowing employers to access diverse candidates with skills from non-traditional paths.
There are more than 70 million STARs, according to Opportunity@Work. They are military veterans, caregivers, and youth who bring transferable skills and experiences to the workforce.
Additionally, skills-based hiring can contribute to more equitable hiring practices. Traditional hiring models often unintentionally favor candidates from privileged backgrounds who had access to higher education.
Add on the fact that, according to the Boston Consulting Group, skills-based hires typically stay longer at a single company, decreasing employee turnover costs, and you’ll understand the excitement around skills-based hiring.
Unlike traditional hiring methods, skills-based hiring focuses on what a candidate can do. This approach can significantly reduce bias and foster a more inclusive workforce, ultimately leading to increased productivity and revenue. By prioritizing demonstrable skills, employers can create more objective evaluation processes less influenced by factors such as an applicant’s alma mater.
Is Skills-Based Hiring a Fad or Here to Stay?
Let’s get real here. Skills-based hiring is great in concept—focusing on merit and expanding the definition of qualified applicants. But is it a trendy fad, or is it a new mainstay in hiring practice?
In the context of today’s rapidly changing market, hiring practices are changing, with the US leading the shift to skills-based hiring. According to an Indeed report, 52% of US Indeed job postings do not mention any formal education requirement as of January 2024, up from 48% in January 2019.
This phenomenon isn’t isolated to a single industry either. Formal education requirements—like a bachelor’s degree—are declining in nearly every industry. Mentions of college degrees have fallen since 2019 in 87% of occupational groups, according to Indeed.
For example, the project management job postings that require a bachelor’s degree or more declined from 67.3% in January 2019 to 58.1% in January 2024.
But that doesn’t mean formal education is completely out the window. Education requirements rose in 19 of 47 occupational groups analyzed by Indeed between 2020 and 2022, including architecture and accounting.
All in all, based on Indeed analysis, skills-based hiring is a progressive hiring practice. From 2019 to 2024, Indeed job postings requiring a degree have decreased. But for now, degrees, especially in highly technical careers like architecture, engineering, and mathematics, stay.
What Does Skills-Based Hiring Mean For Me?
Most career changers have one big question: How do I make a career transition without certain skills?
The answer: You have plenty of employable skills that hiring managers seek.
True to its name, skills-based hiring means that your soft skills and practical knowledge can take center stage. Transferable soft skills like conflict resolution, problem-solving, communication, and critical thinking are often invaluable in your job search, and highlighting these skills can be a winning strategy in transitioning careers.
For example, an often overlooked transferable soft skill is effective communication. Whether you are working in customer service or project management, clearly conveying ideas, listening to others, and adapting your communication style to different audiences is crucial.
Skills-based hiring emphasizes soft skills, but let’s not discount hard skills. Indeed analysis found a gradual decrease in formal education requirements in US job postings. That said, you do not need a degree to prove your technical knowledge. Hard skills gained through MOOCs, bootcamps, and apprenticeships are just as applicable.
Skills-based hiring allows you to showcase your transferable skills and capabilities and compete for roles.
Here’s how to take advantage of skills-based hiring:
- Identify your soft skills and practice communicating their transferable value to different roles. Read the job description to understand how a company expects you to apply your skills.
- Leverage non-traditional learning methods to gain hard skills for specific roles, like a coding language or data visualization.
- Take time to perfect your resume and portfolio to demonstrate applicable requirements. In addition, remove inapplicable experiences and projects that don’t apply to the role you’re applying to.
- Prepare for competency tests and projects by studying relevant material. Additionally, don’t be afraid to ask the hiring manager clarifying questions to ensure you understand what’s being asked of you.
📌 Related Reading: Transferable Skills & Tips for Finding a New Career
How to Find Your Skills-Based Career with Merit America
Skills-based hiring is an accessible pathway into high-wage careers, no degree required. If you’re a career changer looking to transition into a new industry without experience, Merit America can help.
Skills-based hiring aligns perfectly with Merit America’s mission to provide flexible career pathways for individuals from diverse backgrounds.
We help learners attain in-demand, hard skills through third-party curricula. Our career coaches help learners identify and communicate soft skills, along with a host of other job-hunting skills, so you can thrive and shine in the skills-based hiring job market.
Our alumni experience an average wage increase of $24,000 within three months of completing the program, according to the University of Virginia, with more than 400 tech companies hiring our alumni.
We’ve built a successful job training program for career changers like you. Take the first step by exploring our “Which Program Is Right For You” quiz or contacting an admissions counselor today!
📌 Related Reading: Is Merit America Legit? And Other Job Training Questions