Employers are dropping degree requirements, but are they changing how they actually hire? This joint report from the Harvard Business School Project on Managing the Future of Work and the Burning Glass Institute reveals how many companies have announced dropping degree requirements, but sustained hiring changes remain elusive for most. This report identifies where the reality of Skills-Based Hiring is lagging well-meaning ambitions, and shows which companies are getting it right.
"..for all its fanfare, the increased opportunity promised by Skills-Based Hiring has borne out in not even 1 in 700 hires last year. Just as importantly, that progress isn’t shared uniformly across all firms that adopted skills-based policies. Rather, we found that nearly all of the change in Skills-Based Hiring : The Long Road from Pronouncements to Practice 5 actual hiring was driven by 37 percent of the firms we studied that removed degree requirements. Our analysis revealed three categories of firms based on the
actual hiring outcomes of these policy changes:
• Skills-Based Hiring Leaders: These firms are
making real change, increasing their share of
workers hired without BAs in the roles we
analyzed by nearly 20%.
• In Name Only: Approximately 45% of firms seem
to make a change in name only, with no
meaningful difference in actual hiring behavior
following their removal of stated requirements
from their postings.
• Backsliders: The final group of firms, comprising
approximately one-fifth of firms analyzed, make
short-term gains in realized job accessibility after
they drop degree requirements, but the change
doesn’t stick. In fact, in the long run, these firms
wind up hiring a smaller share of workers without
BA’s.
Our analysis makes clear that successful adoption of Skills-Based Hiring involves more than simply stripping language from job postings. To hire for skills, firms will need to implement robust and intentional changes in their hiring practices – and change is hard. Still, despite the limited progress to-date, our analysis shows that, for those who embrace it, skills-based hiring goes beyond corporate virtue signaling. It yields tangible, measurable value. Skills-Based Hiring boosts retention among non-degreed workers hired into roles that formerly asked for degrees. At Skills-Based Hiring Leader firms, non-degreed workers have a retention rate 10 percentage points higher than their degree-holder colleagues. Workers benefit as well. Non-degreed workers hired into roles that previously required degrees experience a 25 percent salary increase on average.
This win-win outcome suggests that Skills-Based Hiring should continue to gain momentum, despite its slow start. By our analysis, Skills-Based Hiring practices could be readily implemented in a minimum of another 250,000 jobs each year, ranging from construction managers to web developers. In this study, we will share which occupations are best positioned to transition to skills-based hiring and identify examples of firms that are leading the way."