The traditional job ad has a laundry list of duties and required credentials. But a rise in technological advancements and consequent skills and labour shortages make employers question just how important those credentials are.
The important question used to be: “Do you have the right degree?”
Now, it’s: “Can you do the job?”
What prompted the shift? Technological advancements like generative AI demand constant upskilling that university degrees don’t always account for. McKinsey partner Brian Hancock points out that job experience or even a rapid boot camp could give a candidate more relevant skills than a degree in some job areas.
The Boston Consulting Group conducted research to examine global trends in skills-based hiring and positive effects on filling vacant job roles and promoting better accessibility to work.
Here are some highlights from the report.
BA degree requirements decreasing the most in US job postings
The US, UK, and Australia have seen a slight decrease in BA degree requirements from 2017 to 2022, while Canada and Singapore show a slight increase.
- US: -3.9%
- Canada: +1.3%
- UK: -1.8%
- Australia: -1.6%
- Singapore: +5.3%
Skills-based hires have longer tenures in their roles with comparable performance
A mix of economic hardships and employee demands for flexibility contribute to recent high employee turnovers. However, the BCG finds that employers who hire for skills tend to see less turnover, especially in the manufacturing, wholesale trade, and transportation industries.
Additionally, the report shows no significant difference in promotion time for skills-based versus traditional hires. Meaning? Their performance is comparable despite the lack of credentials. Plus, those skills-based hires demonstrate a 9% longer tenure in the role.
Industries with the longest tenures for skills-based hires
- Wholesale trade
- Manufacturing
- Transportation and warehousing
- Information and communications technology
- Professional, scientific, and technical services
- Finance and insurance
- Retail trade
- Health care and social assistance
- Construction
- Public administration
More robust skill assessments can help companies succeed with skills-based hiring
The report acknowledges a significant need for companies to accurately assess candidate skills in place of credentials.
Some alternative criteria for assessing skills include skill tests in leveraging generative AI or writing code, results from specific projects, online courses, and micro-credentials such as badges from shorter digital courses.
On top of that, employers can promote inclusivity in their company culture and talent strategy to adjust to skills-based hiring. This might look like:
- Diverse recruiting panels
- Unconscious bias training
- Targets for alternatively skilled candidates
Bottom line? Skills speak louder than schools.
Read the full report from the BCG here.
