A report released on Feb. 14 by The Burning Glass Institute and Harvard Business School indicates that despite growing momentum behind skills-based hiring initiatives, many companies have yet to implement meaningful changes to drop degree requirements or increase the hiring of workers without degrees.
According to the report, approximately 45% of companies that announced policy changes only made superficial adjustments and did not alter their hiring practices significantly after removing degree requirements from job postings. While there has been a nearly fourfold increase in roles where employers have dropped degree requirements between 2014 and 2023, this shift has not necessarily translated into changes in the actual hiring process.
Among 11,300 roles at large firms, there was only a modest increase of about 3.5 percentage points in the share of workers without bachelor’s degrees. However, this change applied to only 3.6% of roles that dropped degree requirements during that period, resulting in a minimal net effect of 0.14 percentage points in the incremental hiring of candidates without degrees. Overall, the report estimates that this small shift created new opportunities for approximately 97,000 workers out of 77 million yearly hires in 2023, representing fewer than 1 in 700 hires.
The report identifies three types of companies regarding skills-based hiring: Skills-based hiring leaders, In-name-only companies, and Backsliders. While 37% of companies are actively making changes and following through on their commitments to skills-based hiring, 45% have only made announcements without implementing real changes, and 18% initially saw gains after dropping degree requirements but did not sustain these changes in the long term.
Despite workers expressing a preference for a skills-first approach in the workplace, employers are facing challenges in making the transition. Integrating skills data into HR processes remains a hurdle, according to a report by EY and iMocha. Moreover, companies are not adopting skills-based hiring quickly enough to meet market demands, especially in the technology sector. To address this gap, companies are turning to in-house training and alternative learning and development opportunities to upskill their employees.
Efforts to promote skills-based hiring include initiatives like the toolkit launched by the Society for Human Resource Management Foundation. This toolkit offers 12 action items for employers to enhance hiring practices, prioritize diverse hiring, and leverage technology-enabled solutions to facilitate skills-based recruitment.
