One Chart Shows Why Employers Are Turning to Skills-Based Hiring
Bubba
22 Nov
As the chart below shows there are often more job openings requiring a college degree than there are workers with degrees, meaning it may be time for employers to rethink traditional hiring methods. (Financial Times)
The trend: Skills-based hiring, the practice of hiring and promoting people “for their skill set, regardless of whether or not they graduated college,” is gaining ground with some of the biggest U.S. companies, including Walmart, General Motors and Amazon.
73% of employers used skills-based hiring in 2023, up from 56% in 2022, according to a report by TestGorilla, a talent assessment platform.
According to the Burning Glass Institute, the share of jobs requiring a degree dropped to 44% last year, down from 51% in 2017.
Roughly 2 in 3 U.S. workers lack four-year degrees.
On the other hand: Per the Burning Glass Institute, 45% of companies that dropped degree requirements in job postings didn’t actually adjust their hiring practices.
18% of firms, including Nike and Uber, initially made progress on skill-based hiring but eventually reverted to degree-based hiring.
Only 97,000 workers annually have benefited from skills-based hiring (out of 77 million hires).
The vibes: Multiple recent surveys have found the perceived value of a four-year degree has declined, as has confidence in the institution of college itself.
A 2023 Wall Street Journal-NORC poll found 56% of U.S. adults believe a college degree is a poor investment, up from 40% in 2013.
A growing share of young people are college-skeptical: A Thumbtack report from September found 55% of Gen Z respondents are considering a career in skilled trades, a 12% increase from last year.
93% of Gen Z college graduates and 80% of parents believe learning a skilled trade can provide better economic security than a college degree.
Bubba’s Two Cents
Americans’ growing doubts about college tie into a wider mistrust of the so-called experts, a trend that was punctuated by Donald Trump’s 2016 and 2024 presidential victories.
Education is increasingly becoming the line that divides us on politics, culture and even physical wellbeing.
