How Skills-Based Hiring Is Overtaking Degree Requirements

Most organizations have high expectations for each position. They need to ensure their employees have the skills necessary to do their job effectively. Historically, a college degree was a proxy used to determine this quickly. But now, many employers are rethinking this traditional requirement. 

Degree requirements are changing, and as a result, candidate pools are expanding. Continue reading to learn what this change means for your organization, including how you can reap the benefits. 

How Have Hiring Requirements Changed?

Following the Great Recession of 2008, degree-based hiring had become so overinflated that many organizations realized it was time for a hiring change. The idea that a degree was the most valuable requirement for landing a good job began to fade. 

The Harvard Business Review recently partnered with Emsi Burning Glass to discover how much this narrative has changed. Over the last decade, it seems most companies have shifted to a skills-based hiring effort. They found that, on the whole, most employers were invoking "degree resets," which primarily involve an overall loosening of degree requirements. Approximately 46% of mid-level positions saw a degree reset between 2017-2019 while 31% of senior-level roles saw one.

Despite changing requirements, degrees are still a part of the hiring process in many influential organizations. Oracle, for example, still requires a degree of some sort in over 90% of available positions. 

When it comes to IT, The Harvard Business Review found that the numbers dramatically differed between and even within positions. For example, 26% of job postings for a Quality Assurance Engineer position at Accenture required a degree, while the other 74% did not. For a similar position, IBM only required degrees in roughly 29% of postings. On the other hand, Apple, Intel, and HP demand degrees in 90-100% of IT positions. So, while skills are playing a more significant role in hiring than they once did, college degrees still remain a deciding factor for many employers. 

While degree resets have the potential to improve quality hiring, there is still a long way to go. Harvard Business Review and Emsi Burning Glass note that 37% of the reviewed job descriptions have not yet reduced degree requirements, effectively excluding 15.7 million potentially qualified candidates from competitive jobs. 

What Has Caused the Shift in Hiring Requirements?

According to the Harvard Business Review, two forms of "degree resets" have led to a more skills-based hiring approach: 

1. The first is a structural reset. Employers are shifting their hiring strategy toward employee skills instead of general degree requirements. Essentially, employers are rebuilding the process from the ground up. 

   This structural reset stems from increasingly high demand for talent, which far outnumbers qualified and available candidates. During the 2010s, employment rates rose consistently year over year due to the ending of the Great Recession. And by 2019, unemployment rates were at an all-time low. 

   During the late 2010s, employers began loosening the degree requirements needed for both middle- and upper-level positions. Employers sought to attract a larger pool of candidates within the dwindling market by shifting to skills-based hiring practices. 

   This larger pool can also include hidden workers, a group of individuals who are ready to work and are willing to learn but are often overlooked by employers.

2. The second form of degree reset is a cyclical reset. This reset involves a more pivoted response to a diminishing talent pool. While structural resets focus on rebuilding hiring practices, cyclical resets are often temporary. They are used to mitigate hiring troubles during desperate times. This might include a time when candidate pools are very limited and the need for skilled workers is very high. 

   One example of a cyclical reset is adjusting degree requirements due to an emergency. During the pandemic, the percentage of nursing jobs requiring bachelor's degrees fell from 35% to 23%. The Harvard Business Review noticed this trend in over 548,000 reviewed job postings.

How Can Employers Benefit from Loosening Degree Requirements?

By removing barriers to hiring, you open yourself up to a much larger labor market. Employers can also begin filling empty positions much more quickly due to the number of applicants who may now feel qualified based on their skill level.

When developing your job description, take time to determine what a candidate actually needs to be successful in the position. Assess the value of skills within the position alongside the value of a typical degree. If you require a college degree without much thought, you may end up overlooking a vast pool of candidates who could be an excellent fit for your team. 

Emphasizing necessary skills can lead to a more inclusive and diverse workforce, which is essential for a growing business to be successful. 

Additional Resources

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