Why Companies are Ditching Degrees for Skills-Based Hiring

For decades, a bachelor's degree has been considered a golden ticket to a successful career. However, the tides are quickly turning. Faced with a skills gap and a desire for a more diverse workforce, many companies are rethinking their hiring practices, resulting in many dropping the requirement of a bachelor’s degree for many open positions. 

A recent report by Intelligent.com found that 45% of companies plan to eliminate BA requirements for some roles in 2024. This follows a banner year in 2023, where 55% of companies did away with degree requirements, particularly for entry-level and mid-level positions. 

The shift is evident on job boards as well, as hiring platform ZipRecruiter saw a significant drop in the percentage of jobs listing a BA as a requirement, falling from 18% in 2022 to 14.5% in 2023.

Why are Companies Dropping Degree Requirements?

So, what’s the reason for this trend? There are several factors driving this movement. First, the concept of "degree inflation," a long-time trend in recruiting, is being addressed, as many jobs that traditionally required a BA simply don't necessitate those specific academic qualifications. Employers are recognizing that skills, experience, and certifications can be just as, if not more, valuable indicators of an applicant's ability to succeed in a role.

Additionally, companies faced with talent shortages in recent years are looking to tap into a wider talent pool. An estimated 62% of Americans don't hold a college degree, so eliminating the BA requirement opens doors for qualified candidates who may have taken alternative paths to develop their skill sets.

For candidates, skills-based hiring creates a more level playing field overall. Individuals with relevant skills and experience obtained through non-traditional means now have a greater chance of landing their dream job. This can also be beneficial for often-overlooked groups, including:

• Minorities: College degrees are expensive to obtain and often out of reach for individuals from disadvantaged backgrounds – filtering candidates by college degree eliminates 76% of Black adults and 83% of Latino adults from contention. 

• Individuals with non-traditional educational backgrounds: Those who attended coding boot camps, obtained professional certifications, or possess strong on-the-job experience can have their skills recognized.

• Career changers: Individuals looking to transition into a new field can showcase their transferable skills and relevant experience.

• Those returning to the workforce: Those who have been out of the workforce for a period can demonstrate their continued skills and abilities.

This shift towards a more inclusive hiring approach can also lead to a more diverse workforce,  which has been shown to benefit companies in numerous ways. Research suggests that diverse teams are more innovative, make better decisions, and outperform less diverse ones. 

How to Make the Transition to Skills-Based Hiring

While the trend is clear, it's important to note that completely ditching bachelor's degrees isn't the goal for most companies. For some roles, holding a BA or BS will likely remain a relevant qualification. However, the shift towards skills-based hiring represents a significant change in the hiring mindset. It's a move away from a one-size-fits-all approach and towards a more individualized assessment of an applicant's capabilities. 

However, this transition comes with its own set of challenges. Changing the hiring mindset takes Developing effective skills-based assessments and revamping interview processes to properly evaluate these skills requires careful planning and execution.

To navigate this shift effectively, here are some key steps HR professionals and business leaders can take:

• Conduct a skills analysis: Identify the key skills and competencies needed to be successful in each role within your organization – not just the open ones. 

• Develop skills-based assessments: Depending on the position, create targeted assessments or practical tests that can measure the specific skill sets, tools, and knowledge required for each position.

• Rethink your interview process: Focus your interview questions on evaluating an applicant's skills and experience relevant to the role. If a candidate doesn’t look like an exact match on paper, don’t disqualify them immediately – instead, evaluate their existing skills and how they can be applied to the role.

• Partner with educational institutions and training providers: Build relationships with institutions offering alternative pathways to develop relevant skills, such as coding boot camps, trade schools, or professional certification programs.

Final Thoughts

The days of the BA being a guaranteed path to a successful career are fading. As the job market continues to evolve, skills-based hiring will become the norm. Companies that embrace this approach will be more well-positioned to attract top talent, build diverse and successful workforces, and thrive now and in the future.