Skills-based hiring is often the better default when employers can define and assess the work directly and no degree is legally required. It can widen the pool beyond applicants with a particular credential. Degree-based screening remains appropriate when formal study, a license, or a genuinely job-related qualification is essential. In practice, the strongest approach is usually to assess relevant skills consistently and treat education as one source of evidence—not an automatic stand-in for ability.
What the two approaches mean
Skills-first hiring focuses on what candidates can demonstrate, regardless of how they learned it. That can include capabilities developed through work experience, training, projects, or formal education. It does not mean ignoring education or experience; it means not treating a degree as the only acceptable proof of competence.
Degree-based hiring uses a degree requirement or preference as a screening criterion. That can be useful when the qualification is required for the work, but it can also screen out capable candidates when the credential is being used as a broad proxy for skills that could be assessed directly.
How the approaches compare for employers
| Decision factor | Skills-first approach | Degree-based approach |
|---|---|---|
| Legal or technical necessity | Suitable when no law, license, or essential technical qualification requires a degree. | Necessary when the role legally requires a qualification, or when the qualification is genuinely essential to the work. |
| Evidence of job ability | Can test the capabilities needed for actual tasks, provided assessments are job-related and consistently applied. | A degree may provide relevant evidence of formal study, but does not by itself demonstrate every task-specific capability. |
| Candidate pool | May include qualified people who gained skills outside a degree pathway. | Excludes applicants who lack the specified credential, including those who may have relevant skills through other routes. |
| Selection process | Requires suitable assessment design, consistent scoring, and resources to administer and review assessments. | Can make an initial credential screen straightforward, but still leaves employers to determine whether candidates can do the work. |
| Evidence on outcomes | Some surveys and observational findings are encouraging, but do not establish that removing degree requirements causes better results in every setting. | Employer surveys report that educational requirements can help identify successful hires; those reports are not controlled comparisons of hiring methods. |
What the available evidence says
Employers expect to use both experience and credentials
The World Economic Forum’s 2025 employer survey found that 81% of surveyed businesses expected to rely on work experience to assess candidates during 2025–2030, while 48% expected to use skills assessments. At the same time, 43% expected to continue using university degrees as a requirement by 2030. These figures describe employer expectations across economies, not verified hiring behavior or proof that one method produces better hires.
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Survey respondents see skills-first as broadly comparable, not a guaranteed improvement
SHRM’s 2025 employer research found that 34% of organizations often or almost always used skills-first strategies. Among HR professionals surveyed, 67% said educational requirements helped their organizations find successful hires, compared with 62% who reported similar success from prioritizing skills. Among supervisors, the corresponding responses were 86% and 84%. These are respondent perceptions, not results from a randomized performance test.
SHRM also reported that 35% of organizations that often or almost always used skills-first strategies said they exceeded financial objectives, compared with 27% of organizations that never, rarely, or sometimes used them. This is an association in survey data; it does not show that skills-first hiring caused the difference.
Retention findings are promising but specific to the studied setting
An OECD report published in 2026 summarizes U.S. big-data evidence finding about 10 percentage points higher two-year retention for non-degreed candidates hired into roles where degree requirements had been dropped, compared with degree-holding peers. This finding concerns the studied U.S. roles and hiring context. It should not be read as a retention guarantee for other employers, occupations, or countries.
Occupational change can coincide with fewer degree requirements
In a study of UK vacancy data, AI-related roles increased by 21% as a share of postings from 2018 to 2023, while mentions of university degree requirements for those roles declined by 15%. The OECD’s 2026 report discusses the study, which covers a specific occupational and time context and vacancy data through mid-2024. The trend does not establish that dropping degree requirements caused the growth in those jobs or improved hiring outcomes.
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When degree requirements make sense
- A law or license requires a qualification: Skills assessments cannot replace a legally mandated credential.
- Formal study is essential to the work: Retain a requirement when the curriculum or qualification provides knowledge that is genuinely necessary for the role.
- The credential has a clear job-related purpose: Be able to explain what capability it signals and why that capability cannot be assessed more directly or acquired through a viable alternative route.
Even in credential-dependent roles, employers can use skills-first methods to assess additional capabilities beyond the required qualification.
How to introduce skills-first hiring without weakening selection
- Identify the work: List the role’s essential tasks and the competencies needed to perform them. Separate capabilities required on day one from those that can reasonably be learned after hiring.
- Rewrite the criteria: Specify required skills and experience in job descriptions. Keep degrees and licenses where they are genuinely necessary; avoid making a credential a blanket proxy for unrelated abilities.
- Choose job-related assessments: Use structured interviews, work samples, or other assessments that reflect the actual work. Make the criteria clear, score candidates consistently, and consider accessibility so that the assessment does not create avoidable barriers.
- Pilot and measure: Test the change in a defined set of roles. Compare applicant mix, assessment results, time to hire, quality of hire, and retention with a prior baseline rather than relying on a single success measure.
- Extend the approach carefully: Apply skills principles to development and performance management as appropriate, and review whether the selection process remains fair and useful over time.
This sequence is consistent with the practical direction outlined by the OECD: identify priority roles and stakeholders, update descriptions to specify skills, adapt selection around demonstrated skills while promoting fairness, and extend skills principles into performance management and development. The OECD also notes that evidence on effective implementation remains limited and largely anecdotal, so this is a framework for practice rather than a proven universal formula.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Risks to manage
- Unreliable assessment: Removing a degree screen without adding a sound, job-related evaluation can leave hiring teams with no reliable way to compare candidates. Assessment consistency and scalability are persistent challenges.
- Unconscious bias and cultural resistance: Teams may continue to favor familiar credentials or apply alternative criteria inconsistently. A different screening label alone does not fix biased decision-making.
- Unequal access: Skills assessments and alternative pathways should be accessible and relevant to the work. Removing a degree requirement by itself does not automatically improve representation.
- Overclaiming outcomes: Surveys capture what employers report, and observational studies describe particular settings. Neither warrants a universal promise of better performance, retention, or equity from dropping degree requirements.
Which works better?
For employers, skills-first hiring is generally the stronger default when the job’s capabilities can be assessed directly and no formal qualification is required. Degree requirements work better when the degree or associated license is truly necessary, or when it is a defensible, job-related indicator of essential knowledge. The practical decision is not to choose one label for every job: define the work, use the strongest relevant evidence of ability, and retain credentials only where they serve a clear purpose.
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