Securing contingent talent may get easier in a slowing economy, but the top candidates still hold the cards for tough-to-fill positions. This continued shortfall of qualified talent is leading some companies to re-evaluate the qualifications themselves. Among the requirements getting a second look is the college degree.

Are Degrees Necessary?

The fourth annual Global Trends Report released by HireVue, a virtual interviewing and assessments technology provider, finds potential is the new priority as in-demand skills rapidly change.

Now more than ever, employers are looking to build processes that can identify what a candidate is capable of rather than hiring solely on a list of qualifications and previous experience, according to the research, which is based on survey results of 6,000 talent leaders worldwide. It found that 65% use skills assessments to determine potential and 21% replaced résumés with skills-based assessments — and almost all respondents, 96%, are looking at a combination of current skills for near-term roles and future skills for likely needs.

“Hiring leaders are becoming increasingly comfortable with artificial intelligence thanks to the widespread exposure to ChatGPT we’ve all had in the last year,” said HireVue CEO Jeremy Friedman in a press release. “Organizations that had been more hesitant are now ready to implement AI-backed assessments because they better understand the tech and trust our scientific approach. Any lingering reservations are outpaced by the urgent need to assess for potential — which is critical, as skills requirements are changing on what feels like a daily basis.”

In addition, research from talent assessment and analytics firm SHL finds hiring assessments are becoming imperative, with 80% of survey respondents indicating that testing candidates is a valuable part of the hiring process. Almost two-thirds of respondents, 65%, stated that their organizations use assessments for hiring new talent, and 70% indicated that they used assessments about the same amount or more in 2024 compared to 2022.

In addition, one in four are using interactive assessments, such as simulations and job fit assessments, in recruitment.

“The definition of the word ‘skill’ has really evolved in the past five years,” Andy Nelesen, global solutions director, volume hiring at SHL, tells CWS 3.0. The conversation has evolved from functional technical skills such as program languages to also embrace softer human skills including growth mindset, potential and learning agility as part of the “skill” definition.

“That’s broadly what we mean when we’re talking about becoming a ‘skills-based organization’ or embracing skills-based hiring,” Nelesen explains. “It’s not just that narrow focus on functional technical skills anymore. It’s a much broader definition.”

The skills-based movement also extends into mobility, upskilling, reskilling, learning pathways and more, according to Nelesen.

HR has coalesced around this concept as a strategy to deal with a very rapidly changing talent landscape. “It’s harder and harder to find great talent — let alone the people that have the skills that we might need for the future,” he says. “So getting at those latent skills, people that can develop the skills that are important. That big discussion has made the use of a fair, objective view into the skills that someone has really compelling.”

Diversity Pipeline

The degree requirement disparately impacts communities of color and rural communities, HR Legalist reported.

More than 70 million workers in the US, more half of the country’s workforce, do not have a bachelor’s degree; however, more than 70% of new US job postings between 2008 and 2017 required a college degree. Fueling disparity concerns, 61% of Black workers, 55% of Hispanic workers, 66% of rural workers and 62% of veterans are non-degreed skilled workers. Between 2000 and 2019, these non-degreed skilled workers lost access to 7.4 million jobs.

The legal risk of a disparate impact claim is also a possibility, as those requirements may tend to screen out otherwise well-qualified minorities or other protected classifications, according to Brian Matthew Rhodes, an attorney in Obermayer’s Labor and Employment department and author of the HR Legalist article.

Legislators on Board

Legislators are also taking note of the impact such requirements have. For example, Massachusetts Gov. Maura Healey in January signed an executive order instituting skills-based hiring practices for the state’s workforce. Job postings will only be allowed to include degree conditions when absolutely necessary to the performance of the job. Additionally, for the first time, hiring managers will receive training and tools to implement this new hiring strategy.

The executive order also calls for new job postings not to specify a minimum level of education as an entrance requirement unless it is determined that a particular level of education is necessary to perform the job.

“As the state’s largest employer, we rely on a strong, diverse workforce to deliver crucial services and programs for Massachusetts residents, businesses and communities every day. But too many job applicants are being held back by unnecessary degree requirements,” Healey said in a press release. “This executive order directs our administration to focus on applicants’ skills and experiences rather than college credentials. It will expand our applicant pool and help us build a more inclusive and skilled workforce than ever before.”

The governor called for the state’s private sector to also adopt the directive, dubbed the “Lead by Example” Employer Talent Initiative.

“Our administration is leading by example, and we encourage the business community to join us by adopting similar skills-based hiring practices,” she said.