How Skills-Based Hiring Leads to Better Recruiting Decisions By moving away from degree inflation and adopting skills-based hiring processes, hiring managers can open up their talent pool and find applicants that truly are the best fit for the role.

By Patrik Wilkens

Opinions expressed by Entrepreneur contributors are their own.

Two decades ago, the hiring process at most companies shifted dramatically. Almost overnight, the phenomenon of "degree inflation" took hold. Job posts that had previously not required candidates to have completed higher education now had job posts stating it was necessary to even be considered for the role.

Think about it this way: Even though the jobs had not changed, companies began adding a degree as a requirement to their job descriptions. Now, with the effects of the pandemic on employment lessening, pressure has been mounting on hiring managers to fill a large number of open positions. Often, these managers now get applications from people who do not meet the requested educational qualifications listed in the job postings.

Since the economic downturn in 2008, the education-first recruiting method is now on the decline. Instead, many companies are adopting skills-based hiring strategies to tackle the influx of applicants who may not have the necessary educational qualifications. In the last year alone, LinkedIn has seen a 21% increase in U.S.-based job postings listing skills and responsibilities instead of qualifications and academic requirements. The question is: Would a skills-based hiring strategy lead to better hiring decisions at your company?

Related: Hiring a Generation Without College Degrees

Why a college degree isn't always the answer

At TheSoul, we know that a college degree isn't everything. Especially in the current job market, where more and more employers are dropping degree requirements for entry-level positions. The number of positions that don't require a degree increased by nearly 40% in 2020 compared to 2019. The demand is also dropping for higher-level positions: 46% less for mid-level and 31% for high-level jobs.

Why is this the case? From your company to your hiring manager to your new employee, a skills-based hiring process creates a win-win-win situation for all parties involved. Potential employees who were previously overlooked will be able to pursue rewarding career paths without possessing a degree, and your company will be better able to fill open positions.

If your company is looking to start taking a skills-based approach to hiring, you must consider both its short-term and long-term benefits. These benefits include:

1. Gain access to a large and more diverse talent pool

Your company may lose out on hiring an exceptional candidate if they lack the education required for the position. This occurs when employers place too much importance on candidates' having a degree, which can lead to hiring decisions being motivated by a phenomenon known as unconscious bias. As a result, companies blindly and immediately eliminate potential candidates for various positions.

Consequently, your company will not have the opportunity to interview candidates who do not meet the educational requirements. This runs the risk of excluding individuals who could have been an excellent fit for the position and your company as a whole. Poor hiring decisions like these will restrict the talent pool to choose from, and consequently, will negatively impact your company.

Companies need to view hiring in a new way. Any candidate who is a good fit for a company, has a strong work ethic, and is willing to learn, is worth hiring — regardless of their educational background.

Companies like yours can level the playing field by evaluating potential new hires on their skill sets rather than their formal education, allowing hiring managers to open positions to a diverse pool of applicants. Overall, this increases the likelihood of a successful hiring process.

Related: How to Make People, Not Résumés, Your Hiring Priority

2. Match the best employee to the most suitable position

Although many hiring managers wish it were the case, regardless of an applicant's education, there is no guarantee that someone who has graduated from college will succeed in the business world.

In the current job climate, there is no longer a need for companies to view a candidate's college degree as a proxy for having the hard and soft skills required to succeed in the role. From pre-employment testing to certifications and employment history, there are many ways your company can directly verify a candidate's technical skills without resorting to the unconscious bias of favoring degrees.

The goal of skills-based hiring is to emulate the experience of working in the position for which a potential employee is being considered. For instance, a copywriter may undergo writing assessments tailored to the company to ensure a good match between the employee and the actual work involved.

By testing out the job before committing to the position, candidates can exit the hiring process if they do not believe they are a good match for the post. In this way, when a candidate is eventually hired, they're not only a better fit for the position, but they're also eager to get started and learn more about your company.

3. Enable increased employee loyalty and retention

When thinking long-term, you should remember that those hired through skill-based hiring are more likely to stay longer at your company. A study published in the Harvard Business Review found that employees without a traditional four-year degree stayed at their companies 34% longer than those with a degree.

At TheSoul, we're proud to state that we often hire applicants who do not have a degree. In our experience, candidates without one are just as capable of learning the ins and outs of different job duties as compared to those with a degree. In addition, just like us, you can offer your employees on-the-job training programs that keep them happier and more engaged as they continuously upskill. As a result, you'll have a candidate who can be a vital asset to your company long into the future.

Related: Why the Traditional 4-Year Degree Isn't Cutting It Anymore

By prioritizing skills over a candidate's educational qualifications, you can ensure your team is filled with the potential to grow, adapt to challenges and constantly push the boundaries of innovation in your industry.

Patrik Wilkens

Vice President of Operations

Patrik Wilkens is Vice President of Operations at TheSoul Publishing. Patrik supports TheSoul's expansion and rapid growth by building brand partnerships and setting long-term and short-term operational strategies.

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