The Power of Skills-Based Hiring

While hiring used to mainly focus on stacked resumes and where candidates earned their degrees, many employers are now prioritizing skills-based hiring. But what does post-secondary education look like from a governor’s perspective, and how are they thinking about ways to create pathways for career mobility and greater economic engagement?

Amanda Winters, Program Director at the National Governors Association (NGA), works within the Center for Best Practices. This sector acts as a think tank for governors, focusing on policy areas that stretch across cybersecurity, homeland security, health, energy, and more. In a recent Parchment podcast, Amanda shared her experience creating post-secondary programs to open new employment pathways for people without college degrees.

Important Changes in Hiring Policies

As the country slowly starts to move away from college paths towards career paths and widens people’s options following high school, focusing on skills-based hiring is becoming more essential. In fact, many governors have removed bachelor’s degree requirements in over a dozen states for public sector roles.

However, Amanda acknowledged the challenges of setting data standards for skills-based hiring. She admits that while these standards are essential, they can be complex for those not deeply entrenched in the technical side of policy-making. Despite this, she emphasized the importance of ensuring that skills and competencies are recognized and valued across various platforms and by different employers.

The NGA believes it’s the public sector’s role to drive skills-based hiring initiatives, especially because it’s often the largest employer in many states. Yet, despite its size, the public sector has traditionally been overlooked in discussions about employer engagement in workforce development.

Their current project, which involves 24 states and territories, aims to change this. By focusing on HR and culture change within public sector organizations, the NGA hopes to set a precedent for skills-based hiring that could influence the private sector as well. This initiative is not just about filling jobs but about creating career mobility and economic opportunity for a more diverse workforce.

Associated Ecosystem Challenges 

One main issue with this hiring style is that HR IT systems don’t always ingest digital credentials. This could mean that new pathways are only being created for people who already have opportunities rather than creating new pathways for people without college degrees.

Another concern is the risk of creating a bifurcated hiring system, where traditional hires with degrees from prestigious universities are valued more than those who come through skills-based pathways. Early data suggests that removing degree requirements could lead to lower wages for these roles, signaling the need for careful, intentional implementation of skills-based hiring practices.

The lack of engagement with faculty in higher education is also a challenge. Amanda pointed out that faculty play a critical role in awarding degrees and shaping curricula, yet they’re often left out of early discussions about skills-based hiring. This oversight could lead to a disconnect between the skills valued in the job market and those recognized by educational institutions, ultimately being a disadvantage to learners.

Changing Employers’ Perceptions of Credentials

Let’s say a potential employee doesn’t have a bachelor’s degree but possesses all the skills and competencies required for the role. How can they effectively demonstrate their qualifications to HR departments?

The NGA’s project is battling this reputational power of a bachelor’s degree and prestige of graduating from a well-known institution, and that’s not going to change overnight. The value and reputation tied to these credentials are central to the ongoing conversation. Progress must be gradual, with a shift toward recognizing the skills and competencies behind credentials, rather than focusing solely on the degree earned or the school attended.

Skills-Based Hiring for Economic Mobility

In the early stages of the project, progress will be measured by policy development and implementation rather than large numbers of people being hired through this new pathway. But that’s just the beginning. As more states adopt this hiring method, it will enable employers to find the best talent while driving economic growth and innovation across the state.

For skills-based hiring to truly take hold, employers must be able to see the value in skills and competencies beyond traditional credentials. This highlights the need for a marketplace where employers can easily access information about available pool talents and credentials, allowing them to make informed hiring decisions and even influence regional economic development. This not only improves employee attraction and retention but enables states to promote their cities as possible headquarters for flourishing companies to settle.

Interested in learning more? Discover how Parchment’s skills-based credentials are empowering learners to effectively communicate their skills to the workforce and support the shift towards skills-based hiring in today’s job market.

There’s always more to learn.