Degrees vs. Skills: Unraveling the future of career success

Is this the end of higher education?

As experts predict the future of work, one detail has become clear: recruiters are hiring for skills over higher education degrees. This shift is a big win for diversity, equity, and inclusion (DEI) efforts. Embracing skills-based hiring broadens the candidate pool, bringing in diverse talents and backgrounds.

But how can your organization adopt a skills-based hiring approach?

Let’s take a closer look to find out.

No degree? Increasingly, that’s no problem

As the future of work evolves, employers are embracing a new approach to hiring that focuses on a candidate's skills rather than their educational background or previous job titles. 

The use of skills filters in recruiter searches on LinkedIn has increased by 25% since 2019. As of now, recruiters are 50% more inclined to search by skills rather than years of experience.

A growing number of companies are ditching degree requirements from their recruitment process. Glassdoor compiled a list of 15 companies, including Google , EY , IBM , Apple , and Bank of America , that are expanding their talent options by no longer requiring applicants to have a college degree.

“Academic qualifications will still be taken into account and indeed remain an important consideration when assessing candidates as a whole, but will no longer act as a barrier to getting a foot in the door,” said Maggie Stilwell , Ernst and Young’s managing partner for talent.

Recent data shows that more and more companies are adopting the skills-based approach. A 2022 analysis of LinkedIn data shows that year over year, the number of job postings on their platform that didn’t require a four-year degree rose from 15% to 20%, a 33% percent increase.

Expanding the talent pool

A talent-scarce market means that organizations are prompted to find better ways

to attract and secure top talent. Experts say engaging people from a wider variety of backgrounds and experiences can help create a more diverse and dynamic workforce. 

A National Center for Education Statistics (NCES) study suggests nontraditional learners make up 74% of the college population in the United States. NCES notes that non-traditional students are: financially independent, have a dependant and are a caregiver, delayed start into university, do not hold a traditional high school diploma, are employed full-time, or attend school part-time. 

Skills-based hiring can be an effective part of your strategy for improved DEI, while also widening your candidate pool and giving you the best chance of finding the right talent.

For instance, a Boston Consulting Group (BCG) study found that diverse teams are more innovative and more capable of developing products that are in tune with changing customer needs because of their varying backgrounds and perspectives. 

By broadening the talent pool, your organization can influence the bottom line. According to McKinsey & Company , businesses that have greater gender diversity at the executive level are 25% more likely to achieve above-average profitability. Similarly, companies that rank in the top quartile of ethnic and cultural diversity are 36% more profitable than their counterparts.

Hiring for skills

Shifting from degrees to skills. Skills-based hiring allows for greater flexibility since employees can be upskilled and reskilled to bridge organizational skills gaps. 

Korn Ferry predicts that the world economy could see a talent shortfall of more than 85 million people by 2030, resulting in roughly $8.5 trillion in lost annual revenue. 

In 2024, more employers will recruit talent with competencies that meet immediate needs and align with long-term goals, driving success in a skills-centric job market.

Take a look at IBM for example, their apprenticeship program has proven positive growth, and now the company will invest $250 million globally in Registered Apprenticeship and other training programs by 2025. How did it happen? By creating a culture of continuous learning within the organization. In the first year, IBM went from seven to over 100 apprentices just from word of mouth, and now they’ve hired almost a thousand apprentices in five years.

The 5 step plan 

Follow this 5 step plan to adopt the skills-based approach in your organization.

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Written by: Alexandra Paasch