Competence over Credentials

From "Degree and Pedigree" to "Will and Skill"

Getting a college degree before joining the full-time workforce provides valuable education and experiences—one time. But in the fast-moving world of work, employees need to gain new sets of rapidly evolving skills, and many are looking beyond the degree.

Skills-based hiring eliminates the obstacles that keep indiviudals without a college degree from being hired in certain jobs and advancing in the workforce once they're hired. A 2022 BCG survey reported many jobseekers wished employers would look at skills and experience instead of degrees and certificates, and many employers have.

Now, BCG and Lightcast have combined for a big-data approach to understand where and how successfully skills-based hiring is being applied throughout the labor market.

The new report relies on in-depth interviews with over a dozen hiring experts, and also analysis of over 22 million job postings collected by Lightcast across five regions in the US, Canada, the UK, Singapore, and Australia, broken out into as many as 265 distinct occupations.

As one CEO interviewed as part of this research said,

“A person’s educational credentials are not the only indicators of success, so we advanced our approach to hiring to focus on skills, experiences, and potential.”

How can Organizations Succeed with Skills-Based Hiring?

• Challenge the biases in your talent strategy. Is a degree always necessary? The report shows that even traditionally degree-focused jobs are dropping traditional requirements, with employers like Goldman Sachs now focusing on 'skillset recruiting' where what you can do matters more than how you learned it.

• Know the skills you need. Skills-based job ads tend to list more skills than traditional ones, like in data science roles, where on average, employers request 37 skills instead of 28. This means employers need a deep and dynamic understanding of current and future skill needs for effective workforce planning.

• Up your skill assessment game. Instead of using degrees as a proxy that assumes candidates have certain skills, find new ways to verify what your candidates bring to the table—which could include looking for microcredentials or testing for certain abilities yourself.

• Support integration and an inclusive culture. Often, the biggest hurdle to skills-based hiring is a cultural one, where companies stuck in traditional mindsets may overlook diverse educational backgrounds, despite increasing awareness of the importance of diversity in gender, race, and career paths. Making sure those from non-traditional backgrounds feel included in the workplace is a crucial component of skills-based hiring.

• Keep being skills-based—it’s not just about hiring. A skills-based organization is one that continues to support every employee's career progression. Basing promotions on skills rather than other factors is one way of supporting this, which also requires an attentive awareness of what skills are present in your workforce and a mindset that prioritizes "talent sharing" over "talent hoarding" within different teams.