Skills-Based Hiring: Where We Stand Today

June 24, 2025 – In recent years, much attention has been given to the concept of skills-based hiring. At first glance, the premise seems almost self-evident: employers should focus on whether a candidate possesses the skills needed to perform a job. It sounds so straightforward that it might feel unnecessary to scrutinize further. Yet, taking skills seriously requires deprioritizing other traditional qualifications, according to a report from HR Executive. But which ones? In practice, the most common shift has been a move away from academic degree requirements.

That raises a question—why discard credentials that appear to convey valuable information? Earning a degree implies certain broadly desirable traits. A college graduate, for instance, has typically demonstrated a combination of perseverance, the ability to operate in less structured environments, teamwork experience, and some level of analytical or communication skill. Even a high school diploma signals reliability and basic discipline—just showing up and staying out of trouble is a meaningful filter.

So why are degrees being de-emphasized? The first and perhaps most compelling reason is fairness. Another key driver—arguably the real motivation behind today’s focus on skills—is cost. Broadening the talent pool beyond college graduates could make hiring significantly more affordable.

College degrees often come with higher salary expectations—not necessarily because graduates are more skilled, but because the credential itself signals a certain level of status or investment. By shifting the focus to demonstrable skills rather than formal education, employers can access candidates who may be equally capable but overlooked due to lacking a degree. This opens the door to hiring competent individuals at a lower cost, without sacrificing performance or potential.

Moreover, in a tightening labor market, many employers are struggling to fill roles, especially in mid-skill positions that don’t truly require a four-year degree. Removing that barrier allows organizations to tap into a wider, more diverse pool of talent—people who may have gained their skills through alternative routes such as vocational training, military service, apprenticeships, or self-teaching. It’s a pragmatic approach to workforce development, driven as much by economics as by equity.

Search Consultants Evaluating Talent

This shift isn’t just theoretical—it’s being felt on the ground by those doing the hiring. Recruiters across industries are rethinking how they evaluate talent, often finding that practical experience, certifications, and demonstrated competencies are better indicators of success than traditional degrees. As they work to fill roles more efficiently and inclusively, many are beginning to question long-held assumptions about what makes a candidate qualified. Here’s how two top search firms are approaching this change.

Related: What Skills Do CEOs Need Today to Succeed

For employers adopting “skills-based hiring”— an approach that focuses on identifying and measuring candidate skills as the foundational element in identifying and acquiring talent—the method offers several advantages, according to Karen Swystun, CEO of Waterford Global. She explained that a skills-based hiring approach can equip hiring organizations with the ability to:

• Expand the size of the talent pool by attracting individuals from diverse backgrounds with transferable skills.
• Improve the quality of candidate hires by ensuring they possess the necessary skills for the role.
• Develop a nimble and responsive workforce equipped with the skills needed to adapt to new challenges and market opportunities.
• Increase retention rates by ensuring that employees are hired for roles that align with their strengths and abilities, leading to greater job satisfaction.
• Promote diversity and inclusion by attracting talented individuals with non-traditional backgrounds.

“Beyond its impact on hiring, skills-based hiring also creates a ripple effect throughout an organization’s operations and culture,” Ms. Swystun said. “It promotes better cross-functional collaboration by building teams with complementary skills, leading to higher efficiencies and enhanced knowledge transfer.”

Transferable Skills That Are in Demand

When embarking on a job search or considering a career shift, your transferable skills—those versatile capabilities gained across various roles and industries—can serve as your most powerful advantage. These skills demonstrate your adaptability and potential to thrive in new environments, even if your experience doesn’t align perfectly with a specific job description. But what exactly are they? These are abilities and expertise that you’ve gained in one role, industry, or life experience that can be applied to a new position or workplace, according to a just-released report from NPAworldwide. “Whether you’re shifting industries or advancing in your field, having a strong set of transferable skills ensures that you remain competitive and adaptable,” the report said.

“Skills-based hiring requires a robust process that incorporates both traditional and modified methods, including identifying the right skill-sets for each role, and verifying and validating candidate skills,” said Fred Loewen, chief operating officer of Waterford Global. “At Waterford Global this validation occurs at various levels, such as reviewing the self-reported skills of the candidate, identifying prior experience requiring those skills, consulting with references who can verify them, and in some cases, assessing actual work output. For senior level searches, the methodology often aggregates skills into competencies, and places greater emphasis on relevant experience rather than upon individual skills.”

“Our experience has found that non-technical skills, such as skills related to communication, leadership, team-work, decision-making, and situation-awareness, can be identified alongside the technical skills required for a particular role,” said Ms. Swystun. “The assessment of these non-technical skills, however, presents the same challenges that typically attend the evaluation of any soft skill, including a lack of standardized metrics and difficulties in comparing situational context between candidates.”

“With respect to assessing the candidate’s ability to adapt to the role over time, the search provider must work closely with the client organization to understand the anticipated trajectory of the role and identify the skill-sets that will be required as that role evolves over time,” Mr. Loewen said. “Without this alignment, predicting the future state of the role becomes challenging.  Our experience tells us that striking a balance between current skill requirements and adaptability for future growth is often the most effective approach. A lack of such balance can lead to scenarios where additional training is needed after the candidate is already in the position (since the candidate’s skill-set is more focused on the future state of the role rather than on the current state), or where the candidate feels unable to leverage the full spectrum of the skills they brought to the role when they were hired.”

Maintain Hiring Efficiency

While some employers no longer list degree requirements in their role descriptions, it is important to recognize that such criteria in traditional job postings are often only an initial filter in the hiring process, according to Ms. Swystun. “For technical roles, degree requirements can often reflect the minimum qualifications needed for candidates to be considered,” she said. “For senior level searches, candidate assessments tend to focus more on broader competencies—aggregations of technical, interpersonal, and behavioral skills—along with the candidate’s experience and track record. Traditional criteria like academic qualifications may hold less or no weight in the hiring organization’s decision.”

“To maintain hiring efficiency and uphold job performance standards, Waterford Global evaluates candidates holistically for role fit,” said Mr. Loewen. This involves assessing the complete blend of technical expertise, interpersonal skills, and behavioral attributes that candidates bring to the role. Our clients have experienced success with such a well-rounded, carefully balanced search approach that balances all relevant considerations, and which places an emphasis on overall fit.”

Related: Why Soft Skills and Continuous Learning Are Key to Thriving in a Changing Workplace

“Organizations can further balance this shift away from traditional hiring criteria by exploring non-traditional ways to validate skill-sets,” Ms. Swystun said. “These methods include evaluating candidates’ capacities for upskilling and continuous learning. A requirement placed upon employees to obtain certifications from online learning platforms and credentialling programs can also offer alternative pathways to technical skill acquisition. Experienced recruitment service providers like Waterford Global can work collaboratively with client organizations to identify diverse and non-traditional learning pathways and develop a deeper understanding of the specific competencies required in today’s emerging occupations.”

Main Motivations

“The shift toward skills-based hiring seems to be driven by two primary motivations: a push for fairness and a desire to create a more diverse talent pool,” said Brett Williams, partner with The Lancer Group. “While these intentions are admirable, the approach often falls short in practice. Organizations are increasingly questioning whether traditional criteria, such as degree, truly predict job performance. And obviously, they don’t. But sidelining these criteria in favor of focusing solely on skills just ends up oversimplifying the complexities of hiring and you end up with a system that’s not only less effective but also more convoluted and harder to navigate.”

“In C-suite and executive roles, our clients prioritize judgment, strategic thinking, and a proven ability to deliver results above all else,” Mr. Williams said. “These qualities can’t be captured by any single factor—they require a thoughtful balance of skills, experience, and potential. Leadership is about navigating complexity, fostering collaboration, taking calculated risks, and driving long-term value creation. These attributes stem from the dynamic interplay of technical expertise, real-world experience, and the potential to grow and adapt. While each element plays a role, it’s the balance of all three that determines success. At the end of the day, oversimplifying the hiring process into something binary like skills-based or experience-based models will only lead to bad hires.”

Challenges in Skills-Based Hiring

Implementing skills-based hiring poses significant challenges, particularly for predicting non-technical attributes like decision-making, team leadership, and adaptability — so-called soft skills, according to Mr. Williams. “And the more senior the role, the more difficult they are to measure by standard skills tests,” he said. “Without the right evaluation frameworks, organizations risk hiring candidates that possess technical skills, but lack the judgment and vision to succeed in strategic roles. It also doesn’t measure potential or answer the question of how the candidate can grow into the role, adapt to evolving challenges, or contribute to the long-term success of the organization.”

“Balancing the removal of traditional criteria, like a degree, while maintaining hiring efficiency and performance standards is no small task,” Mr. Williams said. “Degrees can potentially serve as proxies for traits like discipline, problem-solving, and teamwork, but they’re certainly not standalone indicators for high performance. The key is replacing them with robust, role-specific evaluation methods. For C-suite hiring, this means using tools like scenario-based assessments, in-depth behavioral interviews and comprehensive scorecards. These approaches allow organizations to measure a candidate’s ability to lead, think strategically, and adapt under pressure.”

“Ultimately, the most effective hiring strategies don’t eliminate traditional criteria for the sake of elimination, but rather they refine them,” said Mr. Williams. “For leadership roles, it’s not about finding someone who checks every box, but about identifying individuals who bring the right balance of skills, experience, and potential to drive measurable impact from day one.”

Related: Why Soft Skills and Continuous Learning Are Key to Thriving in a Changing Workplace

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor  – Hunt Scanlon Media