May 29, 2024
Companies are increasingly adopting 'skills-based hiring,' placing more importance on candidates' competencies than traditional filters like education and experience.
According to data from Indeed, the share of U.S. online job postings requiring specific employment tenure has fallen by 10 percentage points to 30% in the two years through April 2024. Additionally, 52% of job ads don't have a formal education requirement, up from 48% in 2019. A ZipRecruiter survey found that 45% of employers scrapped degree requirements for some roles in the past year, and 72% now prioritize skills over certificates in job candidates.
Indeed data shows that mentions of college degrees have fallen in 87% of occupational groups since 2019. Hiring managers are being more explicit in job ads about the specific skills they seek in applicants, according to Cory Stahle, an economist at Indeed.
The demand for workers surged to a record high when the U.S. economy reopened in 2021. This hiring pressure led employers to drop college degree requirements, a filter that 'disqualifies' about 62% of Americans who lack a degree, according to a joint study from Harvard Business School and the Burning Glass Institute.
Skills-based hiring is seen as a 'win-win' for businesses and workers. It opens up new career opportunities for job seekers and has led to higher retention rates among workers without college degrees and large average salary increases for such candidates, according to the Harvard-Burning Glass study.
Job seekers should focus on skills in their resumes, making them prominent while still including traditional information. Candidates should be prepared for potential skills tests during the hiring process. Developing and demonstrating the identified skills are the two primary keys for job seekers, according to Stahle.
While skills-based hiring is gaining momentum and offering new opportunities, there are still some limitations. About 45% of firms seem to make a change in name only, with no meaningful difference in actual hiring behavior. However, the trend is clear: job skills are becoming increasingly important and could make or break your next interview. Job seekers should adapt their approach accordingly, focusing on developing and demonstrating the specific skills employers are seeking.