Skills-based hiring is often floated as the big answer to the shortage of talent for open job postings and the on-ramp into meaningful careers for those without degrees.
It’s a noble goal. But there’s one problem. As an economy-wide solution, hiring based on skills is unlikely to happen.
To be clear up front, I sympathize strongly with the goals of those pushing for skills-based hiring. In particular, I agree with organizations like Opportunity@Work that current practices unfairly discriminate against talented potential employees “skilled through alternative routes”—so-called STARs.
Changing the ways that companies hire and reducing the reliance on college degrees as a sorting mechanism would be a good thing. Degrees are not a great signal of the ability to do a job well, and the practice of sorting by them can be discriminatory. I’ve long argued for such a change (see this piece from 2018, for example—an article titled, “Why States Should Break the College-Degree Stranglehold and Make Jobs Available to All Qualified Applicants”).
But, with the possible exception of postings for primarily technical roles, it’s unlikely to come about through skills-based hiring.
First, there’s the fact that the data show that it’s rare. Although research from the Burning Glass Institute shows more employers are dropping degree requirements (a good thing), as Lilah Burke reported for Work Shift:
“In the three industries where the trend of dropping degree requirements is the strongest—financial services, accommodation and food services, and tech—new hires without degrees are only growing slightly faster than new hires with degrees. In financial services, for instance, job posts that have no degree requirement are growing 354% faster than those that do. But actual hiring of nondegree applicants is only growing 6% faster than hiring of their degreed peers.”
Second is the larger problem that we all seem to have different definitions when we use the word “skills.”
Some are talking about “critical thinking” or “communication”—themselves umbrella terms for a wide range of underlying and discreet skills, the successful execution of which generally requires domain knowledge. Others are talking about more fine-grained examples of technical skills coupled with knowledge for which there are often good assessments—things like SAP Implementation, project management, or Python. Others are thinking about things that are broader in nature and arguably cross domains—skills like punctuality, professionalism, and perseverance.
Given these differences in meaning and grain size, we tend to mean very different things when we use the phrase “skills-based hiring.”
Third, the reality according to my research is that, outside of the more technical fields with clearer definitions, employers tend not to know which skills are at the heart of their most successful employees in specific roles. Nor do they know how to define or measure the skills that seem important, per the above point.
As a result, asking employers to hire based on skills is asking them to select from a bunch of parameters they don’t really understand, can’t define in a common and consistent way, and don’t have a sense for which ones actually result in good performance. Pushing them to skills-based hiring is a recipe for an overly technocratic and complicated exercise that sounds great coming from a CEO, but results in failure that loses sight of the human beings doing the work.
All of which is why a lot of CHROs that I’ve spoken to laugh when I bring up skills-based hiring and talk about how they tried it but then walked it back when it was clear it wasn’t going to work.
It also points to why so much of hiring continues to be based on who you know—despite the effort of skills-based hiring pushes to make it otherwise. According to estimates, at least 50% and as high as 85% of roles are filled through one’s network. As AI advances, our belief is that this human tendency to rely on trusted referrals is only likely to increase.
So what’s a more likely path forward that achieves the goals of organizations like Opportunity@Work?
My takeaway from our research for Job Moves: 9 Steps for Making Progress in Your Career is that employers could evolve how they hire if they focused more on the tasks, experiences, and daily and weekly work that individuals in a particular role do rather than what today’s job descriptions focus on—the laundry list of “skills,” qualifications, and platitudes about work style and culture cribbed from past job descriptions, competitors’ postings, and anything else that seems even peripherally relevant or that ChatGPT generates.
From there, those hiring could look at the experiences individuals have had in their careers and schooling to identify better matches. This builds off an idea that Morgan McCall advanced in his book High Flyers: Developing the Next Generation of Leaders—that people can grow and develop based on the experiences they have. And that you can shape people intentionally from those experiences.
This, in turn, would push schools—starting as early as middle or high school—to focus more on providing individuals with experiential-learning opportunities: embedding real work experience that connects students to networks of individuals who make hiring decisions. That could be through projects, externships, co-ops, internships, apprenticeships, and more. All of which would make it more likely that students could build connections, develop expertise, showcase what they can do, and get hired.
Now, to be clear, this won’t mean that skills (and knowledge) will be irrelevant.
To prepare individuals to succeed in these experiences and in doing tasks, schools will need to understand the underlying knowledge and skills—an appropriate place to use educator expertise in designing learning based on cognitive task analysis.
But rather than trying to continue to move the boulder of “skills-based hiring” up a mountain, it’s worth spending time on efforts that would actually make a difference in making sure STARs can find meaningful work.
