Skills vs. Degrees: Which is Better for Hiring?

Posted by Des Sinkevich on October 26, 2022

Not only has work and the workplace fundamentally changed over the last few years, how Gen-Z gets into the workforce is shifting as well. More and more Gen-Z high schoolers are becoming skeptical of the traditional high school-college-dream job pathway that so many of us have trod before them. With the workforce of the future doubting the need for college degrees, employers will have to change hiring practices in order to attract new workers and ensure they are qualified for the job.

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Skills vs. degrees: which is better for hiring?

Though 72% of employers agree that degree possession alone isn’t a reliable method of assessing job readiness and applicants’ skills, 52% continue to hire based on degree attainment because they consider it “less risky.” Finishing a degree program signals a certain level of commitment but excludes workers who have demonstrated persistence in skill gain in other ways. Despite this, many job posts still list minimum degree requirements for entry-level positions, eliminating a slew of skilled and dedicated workers from qualifying. And, in a job market that currently favors workers over employers – there are a larger number of job openings than potential hires looking for new roles - focusing on outdated hiring practices that emphasize a degree over skills will be ultimately detrimental to company growth over time. With that in mind, employers need to rethink how to best determine who will make a good employee: someone who has the skills they need or someone with a degree?

For many roles, having a general degree doesn’t ensure the candidate will make a good employee. Though completion of a degree can demonstrate commitment and dedication to learning, it doesn’t necessarily mean that the applicant has the specific skills they actually need to do the job. With 4-year degree programs, time spent in gen-eds can take away from someone’s ability to gain real work experience and develop soft skills. Someone who is able to communicate and work well with others, can adapt to new tasks and environments, and pays attention to the smallest details of their work can be trained in technical or job-specific skills and will be an asset to any business.

While one can’t be said to be “better” than the other, hiring based on proven skills over a degree can help ensure that your new employee has what they need to be successful on the job from day one.

How to change outdated hiring practices

While 81% of employers believe organizations should hire based on skills, not degrees, according to a JFF report, many, if not most, are scared to make the leap toward actively hiring this way. 33% of those employers also think that the risk of hiring the wrong candidate for a job is a barrier to considering non-degree candidates.

But while there are many roles in which a degree is necessary for success on the job – you wouldn’t hire a doctor who didn’t complete medical school just because he has the skills to diagnose illnesses – there are even more that don’t. When considering what skills and knowledge someone needs to fill an open position, ask: can these skills be learned without going to college?

The answer will often be yes.

If that’s the case, you can determine who is qualified for a position through documented, relevant work experience, non-degree awarding certificate completion, or any post-secondary training that isn’t matriculation and graduation from college.

Further, it’s essential to update job posts to remove a degree from requirements for qualification. Besides opening hiring to more candidates, you’re likely to receive more applications from interested workers. Many strong prospective employees who have the skills you’re looking for but no degree would have passed by your job post in the past because of the degree requirement. Without one, you open yourself up to a wider talent pool to choose from.

And it’s important to remember when assessing job candidates that it’s the skills they have that matter, not how they attained them. When hiring and interviewing, focus on what they know not whether they attended a four-year college.

Why focus on skills-based hiring

Even the largest companies – Apple, Google, Netflix - are focusing on skills-based hiring. More and more businesses are transitioning to skills-based hiring, too. The number of jobs in the United States that don’t require a degree has increased 40% since 2019. But besides joining a workforce zeitgeist, there are several other reasons to shift to a skills-based hiring approach.

One pressing reason to shift how you think about hiring is the future workforce. As more Gen-Z begin to doubt the importance of a college degree and forgo that pathway altogether, instead choosing to pursue paths that lead to skills attainment, there will be more and more workers who don’t necessarily fit outdated job requirements. 74% of Gen-Z want to learn skills that will prepare them for in-demand jobs* in the future and college, they’ve realized, will not necessarily get them there.

Besides preparing for the future workforce, shifting to skills-based hiring is also beneficial for employers who’ve struggled to attract and retain workers in the last few years. With over 11 million job openings currently and less than 6 million workers available to fill them, it’s a fight to attract the right applicants and secure new hires. By being more open to assessing candidates based on what they know versus what school they paid exorbitant tuition to, you will attract a wider pool of job candidates and have more choices of applicants when filling open positions.

At the end of the day, the world of work is shifting, has been shifting since the pandemic, and will continue to do so as workers’ choices and concerns reshape the workforce. To make sure you’re not left behind, scrounging for employees that fit into degree-holding molds, it’s vital that you shift hiring practices to consider skills over degrees when relevant. Again, there are many roles that do require the knowledge that comes with a degree – doctors, engineers, architects – but there are many more jobs in which a person with simple soft skills, who is a good culture fit, can be trained to develop the skills you need post-hiring.

Also, it’s important to acknowledge that there are other paths toward skills attainment, including certificate programs, trade or technical schools, and job experience. Through focusing on skills-based hiring, your company can grow with talented, dedicated workers who know what they’re doing.

Develop internal training programs to help employees gain skills

Even when hiring for skills over a degree, some talented employees may still need more training to gain industry specific knowledge, especially if they’re looking to advance within the company. Your business can create a strong, dedicated workforce and confident leaders by offering pathways toward further skills attainment with education benefits programs. With a trusted training provider like Penn Foster, you can offer education to upskill employees, from high school diploma offerings to bachelor’s degrees, or industry-relevant career training. If you’re ready to create a confident, skilled workforce, reach out to our training experts today to learn more about how you can build effective training and education programs for your company.