Skills-based hiring happens when recruiters hire applicants based on their specific skills and competencies rather than their educational background or previous job experience. So, rather than using years of experience as an essential qualification, it recognizes that skills can be developed effectively even for a relatively short time. More experience does not always mean higher competency.

Employers today are becoming less likely to require formal education credentials for jobs. According to an Indeed survey, 52% of US job postings on the platform did not mention any formal education requirement as of January 2024, up from 48% at the same time in 2019. US job postings requiring at least a college degree fell from 20.4% to 17.8% in the last five years. Formal educational requirements are declining in nearly every sector, and mentions of college degrees have fallen since 2019 in 87% of occupational groups analyzed by Indeed.

Similarly, in 2022, 29% of paid job posts on LinkedIn omitted professional degree requirements, up from 21% in 2019.

Challenges and Opportunities in Degreeless Hiring

According to HR Dive, job posts without degree requirements are growing faster in some industries than those requiring degrees. For instance, degreeless posts in financial services are growing 354% faster, followed by 282% faster in accommodation and food services and 240% faster in technology, information, and media. Certain functions are also seeing faster growth. In accounting, the number of degreeless job posts is growing 453% faster than those without, compared to 92% faster for administrative roles and 68% faster for engineering roles.

Regarding actual hires, accommodation, and food service hires without professional degrees have grown 11% faster than those with degrees, followed by 6% faster growth in financial services and 3% faster growth in technology, information, and media. Other industries, such as consumer services, entertainment, and government administration, hire more workers without degrees. Across all three of these top industries, project manager and administrative assistant roles were among the top five occupations filled by hires without degrees.

Why Skills-Based Hiring Practices are Gaining Momentum

The shift from degree-centric to skill-centric hiring practices can be attributed to employers emphasizing practical skills over formal education. This is especially true in tech roles that require coding or data analysis. For instance, Google hires software engineers without bachelor’s degrees but with equivalent practical experiences:

Skills-based hiring aims to close the skills gap in the workforce by identifying specific skills. This ensures the right fit for specialized roles and helps address the skills shortages in industries like tech and blue-collar jobs.

Hiring for skills also removes barriers for nontraditional candidates, such as those from underrepresented backgrounds or self-taught professionals. Focusing on ability rather than a bachelor’s degree encourages diverse hiring practices.

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