The Rise Of Skills-Based Hiring

In the 2000s, companies began adding degree requirements to job descriptions that had not previously required degrees, even though the skills and requirements of the jobs themselves had stayed the same. This trend, also known as “degree inflation” became even more pronounced after the 2008/2009 recession, according to the?Harvard Business Review. Afterwards, government leaders and businesses recognized that it was time to revert back to eliminating degree requirements in many industries. The question is, have companies actually done so?

The?Harvard Business Review partnered with Emsi Burning Glass, a labour-market data company, to analyze over 50 million jobs that were posted between 2017 and 2022. They identified that employers have in fact reset degree requirements for a variety of positions, mainly those in middle-skill areas (those requiring some post-secondary education or training, but less than a four-year degree).

In evaluating job applicants today, employers are often times now hiring on the basis of “demonstrated skills and competencies”. Particularly amidst the backdrop of the Covid-19 pandemic, many organizations have been desperate to find skilled workers, and therefore were willing to forgo degree requirements for many jobs. However, this shift may be only temporary, and only a “cyclical rather than a structural reset”. Regardless, it has shown that, in many cases, workers without degrees are actually able to perform better than those with.

Furthermore, IT jobs that have recently eliminated degree requirements continue to make higher than average demands for college degrees. So, given that technical skills can be easily confirmed in hiring processes, why are so many employers still requiring degrees? HBR suggests that perhaps it is because they believe that those who have college or university degrees naturally possess more refined soft skills. However, these skills are much harder to assess, and it is not enough to measure them by using a degree as a proxy.

Reducing degree requirements will also inherently increase equity and diversity across the labour market. Those who are able to get college degree often come from affluent and advantaged backgrounds and not from minority and underrepresented communities. Without inflated degree requirements, “previously overlooked workers will be able to pursue attractive career pathways” and companies will be more successful in tracking down talent for their job openings.

Read more about the study and about skills-based hiring from the?Harvard Business Review.