The Future of Hiring: Why Skills-Based Hiring is the Key to Workforce Success
In today’s competitive job market, traditional hiring methods that focus on degrees and years of experience may be limiting businesses from finding the best talent. As industries evolve and the demand for skilled workers grows, companies are shifting toward skills-based hiring—an approach that prioritizes a candidate’s actual abilities over their educational background or job history.
What is Skills-Based Hiring?
Skills-based hiring is a recruitment strategy that focuses on identifying and assessing the competencies required for a role rather than relying on formal credentials. It recognizes that skills can be acquired through various means, including work experience, apprenticeships, certifications, and self-learning. By shifting the focus from pedigree to performance, businesses can access a wider, more diverse talent pool.
Why is Skills-Based Hiring Important?
- A More Effective Predictor of Success
Research shows that hiring based on skills is five times more predictive of job performance than education and 2.5 times more predictive than work experience alone. This method allows employers to make more informed hiring decisions based on real abilities rather than assumptions tied to formal education.
- Expanding Access to Untapped Talent
According to Opportunity@Work, nearly 70 million workers in the U.S. have the skills to perform higher-paying jobs but lack a college degree. Of these, 30 million workers could transition into jobs that pay at least 50% more with the right opportunities. Skills-based hiring creates pathways for these individuals to contribute meaningfully to the workforce.
- Boosting Business Performance
- 80% Better Performance: Diverse teams, enabled by fair and skill-focused screening, outperform their peers by 80%.
- 42% More Candidate Responses: Job postings with skills-based language receive 42% more applications and lead to faster hiring.
- 34% Better Retention: Employees hired based on skills, rather than degrees, stay 34% longer on average.
Real-World Success Stories
JetBlue’s Skills-Based Hiring Transformation
JetBlue redefined its hiring process for reservation assistants by identifying key skills needed for success. Through a skills assessment in English and Spanish, the airline saw remarkable improvements:
- Training failure rates dropped by 75%.
- Overall training attrition decreased by 25%.
- Top assessment scorers had a 90% training success rate, compared to 76% for lower scorers.
Ernst & Young (EY) Removes Degree Requirements
In 2016, EY eliminated degree requirements after discovering no correlation between academic performance and job success. This shift helped diversify their workforce and expand their talent pool.
Maryland’s Government Opens Jobs to More Workers
In May 2022, Maryland removed degree requirements for nearly 50% of state jobs, making roles in healthcare, corrections, skilled trades, and engineering more accessible to qualified candidates without a four-year degree.
Implementing Skills-Based Hiring in Your Organization
- Identify Key Skills for the Role
Consider the essential skills that separate top performers from average employees. Ask questions such as:
- What skills do our best employees have?
- What do they need to excel at daily?
- What skills were missing in past unsuccessful hires?
- Prioritize Skills Using a Matrix
Not all skills require expert-level proficiency at the start. Employers should use a skills matrix to define expectations and allow employees to develop within the role.
- Use Skills-Based Interviewing
Move beyond traditional resume-based screening and incorporate behavioral and situational interview questions that assess a candidate’s actual capabilities.
- Track and Measure Success
To ensure effectiveness, companies should monitor:
- The percentage of roles filled using skills-based hiring.
- Retention and promotion rates for employees without a four-year degree.
- Changes in productivity and job performance.
Employer Accelerator: Skills-Based Hiring for Small and Mid-Sized Businesses
Competing for talent in today’s market can be challenging. Hiring people with the right skills saves time and money. If you are looking for better ways to identify and hire the right talent, or if you consistently struggle to fill particular roles, this program is for you. Join us for five, one-hour virtual trainings and two individualized coaching sessions. The cohort will run from March 4 – April 15, 2025. This opportunity is open to organizations with 500 or fewer full-time employees. Register today to secure your spot.
The Future of Hiring is Skills-Based
As industries continue to evolve, businesses that adopt skills-based hiring will gain a competitive edge by unlocking a broader talent pool, increasing workforce diversity, and improving employee retention. Employers who embrace this shift will not only fill roles more efficiently but also build a workforce that is more adaptable, capable, and prepared for the future.
In March 2025, the ACCE Foundation will launch a program to support employers in adopting skills-based practices. Stay ahead of the curve and start transforming your hiring process today!
