Skills-Based Hiring Continues to Gain Momentum

Among employers, the notion of focusing more on skills than education when hiring has gained momentum over the last several years. A recent survey indicates the trend is continuing.

At the end of 2025, Western Governors University (WGU) released its inaugural Workforce Decoded report. It includes results from a survey of more than 3,100 U.S.-based participants representing organizations of various sizes across a range of industries. Notably, 78% of respondents said work experience is equal to or more valuable than a degree, and 86% cited nondegree certificates as valuable indicators of job readiness.

Considerable adjustment

Skills-based hiring represents a considerable adjustment for people raised on the idea that going to college automatically and significantly increases the likelihood of getting a good job. It also suggests that societal attitudes toward university education are changing.

The escalating price tag of tuition and anxiety about student debt have many younger people rethinking whether they want to attend traditional colleges. Meanwhile, the WGU report suggests that employers increasingly value specific job-ready skills alongside or, in some cases, over traditional degrees.

There are other reasons for the ascendance of skills-based hiring. Proponents argue that it may help reduce bias, strengthen objectivity and boost diversity. They say job candidates are more likely to be judged on the skills they bring to the table rather than the prestige of the institution of higher learning they attended. It can also expand candidate pools and influence how your organization defines roles, evaluates performance and compensates workers.

Practical reasons … and risks

If you’re looking for more practical reasons to adjust your organization’s hiring approach, there are plenty. Focusing on skills rather than education may lead to better “job matching” — that is, aligning job listings more closely with qualified applicants. This can reduce time to hire while improving employee engagement and retention. Employees are brought on to do what they do best, rather than based on an educational background that may not fully align with the organization’s needs.

Of course, skills-based hiring has risks all its own. Employers that focus too narrowly on technical abilities may overlook other critical qualities, such as:

• Adaptability,
• Communication skills,
• Leadership potential, and
• Alignment with organizational culture.

There’s also the challenge of accurately assessing whether candidates can apply their skills in real-world situations. Resumés, certificates and interviews may provide useful insight, but they don’t always tell the whole story. One way to dig deeper is to incorporate brief, carefully designed and low-pressure skills exercises into the hiring process. It’s also important to consistently evaluate employees’ performance to better assess the long-term results of hiring decisions.

Direct impact

Ultimately, skills-based hiring is an important trend worth keeping an eye on. After all, how your organization fills open positions directly impacts its financial performance. Successful job matching reduces turnover and builds stronger teams, bolstering your ability to control labor costs and support long-term growth. We’d be happy to help you measure and analyze hiring, compensation and labor costs so you can make informed decisions that support both operational goals and financial success.

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