3 Industries Leading the Way in Skills-Based Hiring 

There’s good news for the 62% of adults who don’t have a four-year college degree: One of Gartner’s top “Future of Work Trends” for 2024 predicts skills-based hiring will eclipse degree requirements in the search for qualified talent.

Let’s take a look at the facts around skills-based hiring, and three top industries dropping their demand for degrees.

Degree inflation persists. . .

• A 2023 report by Bain & Company, OneTen and Grads of Life discovered that 60% of middle-skill jobs are “soft bachelor’s” jobs, with descriptions that require a four-year degree despite a degree not being a good evaluation for the skills required.
• In a 2022 employer survey, close to three-quarters of respondents said they don’t believe degrees are a reliable indicator of candidate skills. Yet more than half said they continued to hire from degree programs because it felt less risky.

However, employers are starting to report valuing skills over degrees . . .

• In a survey of 800 U.S. employers, 80% prefer experience over education in a job applicant.
• 45% of respondents in the same survey said they plan to eliminate bachelor’s degree requirements for some positions in 2024.
• Skills-first hiring criteria are 5 times more predictive of future job performance than educational background and 2.5 times more predictive than work experience.
• Roles that dropped degree requirements have a 10%-point higher two-year retention rate vs. college-educated coworkers. That’s a 20% increase in retention.

Degree requirements will continue for highly specialized jobs such as doctors and lawyers. It’s the middle-tier jobs like construction managers, sales supervisors, web developers, cybersecurity and IT help desk specialists that will likely shift the most.

Government

In 2020, an executive order shifted focus from college degrees to job skills in federal hiring. Since then, at least 16 states have dropped degree requirements for most state positions.

Tennessee, for example, prohibits state agencies from requiring a bachelor’s degree as a condition of employment. In Missouri, state agencies cannot deny consideration to an applicant solely based on a lack of a postsecondary degree. And Florida passed a bill stating that public employers may only include postsecondary degree requirements as an alternative to specified years of direct experience.

Tech and IT

Beamery reports that 56% of business leaders in the Technology/IT sector identify skills shortages as one of their biggest talent challenges. In fact, the looming talent shortage in tech could cost the U.S. $162 billion worth of revenues annually.

Given the rapid pace of change—especially in the age of AI—the tech industry is especially suited for a skills-based hiring model. Large tech companies like IBM and Accenture are leading the way, with only 29% and 43% of their IT job postings requiring a four-year degree, respectively. Compare that to Oracle, where 100% of posted IT jobs require a degree, or Apple, with 90% of jobs requiring a degree.

Construction management

According to Intelligent.com, the industry with one of the highest percentages of companies eliminating bachelor’s degree requirements is construction—55% of survey respondents reported eliminating a bachelor’s degree requirement for construction roles in the past year.

A report based on data from the Bureau of Labor Statistics (BLS) shows that the most common job that doesn’t require a college degree was first-line supervisors of construction trades and extraction workers. More than 81% of those workers don’t have college degrees. Most construction managers without a college degree work their way up, beginning as assistants or as trade specialties, and receive extensive experience on the job before transitioning to management.

To unlock the full potential of the workforce, the shift to skills-based hiring takes intentional practice. As noted by McKinsey & Company, it’s reported to be most effective when integrated into a broader talent strategy that prioritizes continuous training and upskilling.

But by reducing or dropping four-year degree requirements, employers can tap into a massive talent pool—the 70M+ workers who have developed valuable skills through military service, community college, training programs, partial college completion or on-the-job experience.

This article is part of our series on skills-based hiring. Also read “The Future of Hiring Is Skills-Based.“