In recent years, the job market has witnessed a clear shift: many employers are placing less weight on formal degrees and more on what a candidate can do. Skills-based hiring,  prioritizing competencies, experience, and demonstrated ability over educational credentials, is becoming a leading trend in recruitment. According to NACE’s Job Outlook 2025 Spring Update, almost two-thirds of employers surveyed reported using skills-based hiring to help identify candidates with potential.  Below, we explore why this is happening, what the data shows, and what organizations and job seekers should be thinking about as the change accelerates.

Why the Shift Is Occurring

1. Degrees Don’t Always Predict Job Performance

College degrees have long served as a signal of learning ability, perseverance, or subject knowledge. But with rapidly changing technologies, shifting business models, and new roles emerging, a degree earned several years ago doesn’t necessarily reflect current or relevant skills. Employers are increasingly aware that degree requirements may overlook talented individuals who have developed necessary skills through non-traditional routes, such as self-learning, boot camps, on-the-job training, or certifications.

2. Talent Shortages & Broader Talent Pools

Many industries are facing skills shortages. Limiting hiring to degree holders can constrain the candidate pool and slow down the hiring process. By focusing on skills instead of mandates like a four-year degree, companies can tap into underutilized segments of the workforce. People who may lack formal credentials but bring relevant ability and potential. This broader reach helps with scale, diversity, and agility.

A LinkedIn Economic Graph research note found that by using a skills-based hiring model, the “talent pool” for many roles can expand dramatically (e.g., globally a median 6.1× increase compared to traditional job-title or degree-focused pools). It also showed that workers without bachelor’s degrees saw a 6% greater increase in opportunity under a skills-based model. 

3. Cost, Time, and Efficiency

Hiring based on skills can reduce recruiting cycle time (because fewer candidates are eliminated purely by credential filters), decrease training or onboarding if the skills are well-matched, and lower turnover, since candidates are evaluated more closely on what the job requires rather than on credentials alone.

4. Evolving Worker Expectations and Equity

Workers today, especially younger cohorts or those from non-traditional backgrounds, value merit and opportunity. There is growing pressure for fairness and inclusion in hiring. Skills-based hiring is seen by many as one way to reduce bias, give people without access to costly education a chance, and align hiring more closely with actual performance potential.

What Employers Should Do to Adapt

If your organization is considering embracing skills‐based hiring (or expanding how much it already does), here are some strategic steps:

1. Audit your current job descriptions: identify roles where degree requirements are “nice to have” vs “essential.” See our post "Is your job description too detailed?"

2. Define competencies for roles: list what skills, behaviors, experience, and knowledge are really needed. What technical and soft skills matter? What level of proficiency?

3. Develop or procure assessment tools: work samples, skills tests, coding challenges, portfolio reviews, behavioral interviews designed to surface relevant real-world ability.

4. Train hiring managers: so they understand what to look for, how to evaluate skills, avoid bias, and trust non-traditional signals.

5. Measure outcomes : track retention, performance, satisfaction, diversity of hires, time to hire, etc., to see whether the new process is delivering.

6. Communicate changes clearly: both internally (so hiring teams know what’s changing) and externally (job seekers should understand what you are looking for).

What Candidates Should Know

For job seekers who may not have a traditional degree or who want to lean into this trend, here are ways to position yourself strongly:

• Build a portfolio or real work examples that demonstrate your proficiency, such as projects, internships, open-source contributions, or freelance work.

• Take relevant certifications, micro-credentials, bootcamps, or other short courses that are respected in your field.

• Emphasize transferable skills (e.g., problem solving, adaptability, communication, collaboration), not just technical ones.

• Use your resume and cover letters to clearly highlight what you can do, not just where you studied.

• Network, seek mentors, and engage in communities where you can both learn and make your capabilities visible.

The Bottom Line

Skills‐based hiring isn’t just a trend;  it’s fast becoming a competitive necessity. For organizations, it opens up access to broader talent pools, diversity, and better alignment between what the work requires and what candidates deliver.  For job seekers, it means more pathways to succeed, even if a traditional degree isn’t part of your story.

For SkyWater Search Partners, which works at the intersection of companies seeking top talent and candidates seeking their next opportunity, this shift presents both challenges and huge opportunities. Helping clients define meaningful competencies, creating fair assessments, and guiding candidates to highlight their true skills will be a key differentiator.