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Neither approach wins in every situation. Skills-based hiring is often the stronger default when employers can define and assess the work directly and no credential is legally required. Degree requirements remain appropriate when formal study, licensure, or job-specific knowledge makes a qualification necessary. For many roles, the most defensible approach is to assess relevant skills consistently and treat education as one piece of evidence—not a substitute for demonstrated ability.
What the two approaches mean
Skills-based hiring
Skills-based, or skills-first, hiring focuses on what candidates can demonstrate, regardless of how they learned it. It does not mean ignoring education or experience: those can still provide useful evidence. The distinction is that a degree is not used as an automatic proxy for capability when the work can be assessed more directly. The World Economic Forum described skills-first strategies as focusing directly on skills rather than how they have been acquired in its 2024 report.
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Degree-based hiring
Degree-based hiring makes a university qualification a screening requirement or gives it substantial weight. A degree can indicate sustained study and relevant knowledge, but its value depends on whether that preparation predicts the tasks the employee will actually perform. A credential requirement is strongest when it is legally mandated or demonstrably connected to essential duties.
What current employer evidence says
Employers are not simply choosing one method and abandoning the other. In the World Economic Forum’s 2025 employer survey, 81% of businesses expected to rely on work experience to assess candidates during 2025–2030, 48% expected to use skills assessments, and 43% expected to continue using university degrees as a requirement by 2030. These are employer expectations, not measured hiring outcomes. The findings appear in the report’s workforce strategies section.
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SHRM’s 2025 employer research found that 34% of organizations often or almost always used skills-first strategies. Respondents reported educational requirements helped their organizations find successful hires at a rate of 67%, compared with 62% who reported similar success prioritizing skills. Among supervisors, the corresponding figures were 86% and 84%. These are perceptions reported by respondents, not results from a randomized comparison of hiring methods. SHRM’s report on the skills-first movement also found that 35% of organizations that often or almost always used skills-first strategies reported exceeding financial objectives, compared with 27% of organizations that never, rarely, or sometimes used them. That association does not show that skills-first hiring caused the financial results.
Which approach works better for employers?
It depends on the role and on whether the employer can make a reliable selection decision. Skills-first hiring is usually more useful when capabilities can be defined, tested, or demonstrated and a degree is not essential. Degree requirements make more sense when formal preparation is necessary for safe, competent work or when regulation requires a qualification. Across both approaches, a poorly designed selection process can produce weak hires; changing the credential rule alone does not establish that performance, retention, or fairness will improve.
| Employer question | Skills-first approach | Degree requirement |
|---|---|---|
| Is a credential legally required? | Can assess additional capabilities, but cannot replace a mandatory qualification. | Appropriate when the qualification is legally required. |
| Can the work be assessed directly? | Useful when a job-related work sample, structured interview, or other assessment can measure essential capabilities. | Useful when the degree provides necessary preparation or is a meaningful indicator of required knowledge. |
| What happens to the applicant pool? | May include qualified candidates who learned through work, training, or other routes; broader access is not automatic. | Excludes applicants without the specified credential, including some who may have relevant skills. |
| What does selection require? | Time and resources to design, validate, administer, and score assessments consistently. | Can simplify an initial screen, but the degree alone may not show whether a candidate can perform the role. |
| What is known about outcomes? | Some reported associations and setting-specific observations exist; they do not guarantee better outcomes for every employer. | Survey respondents report that education requirements can help identify successful hires, but that is not proof of universal predictive value. |
What outcome evidence can—and cannot—show
Retention in U.S. roles that dropped degree requirements
An OECD report published in 2026 summarizes U.S. big-data evidence finding approximately 10 percentage points higher two-year retention for non-degreed candidates hired into roles where degree requirements were dropped, compared with degree-holding peers. This is an observed result in the studied setting; it does not establish that removing degree requirements will raise retention elsewhere or for every occupation. The OECD also cautions that evidence on effective implementation remains limited and largely anecdotal. Its discussion is available in Promoting skills-first hiring and talent management.
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A study by Bone, González Ehlinger, and Stephany, summarized by the OECD, found that AI-related roles increased by 21% as a share of UK postings from 2018 to 2023, while mentions of university degree requirements for those roles declined by 15%. The study concerns UK vacancy data and a particular occupational and time context, not all employers or jobs. See the study, “Skills or degree? The rise of skill-based hiring for AI and green jobs”, and the OECD’s discussion of skills as a currency of work.
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How to choose a hiring model for a role
Keep the qualification when it is necessary
First establish whether law, licensing rules, or the nature of the work requires a formal qualification. In regulated fields, a skills assessment may help compare candidates’ additional capabilities, but it cannot waive a mandatory credential.
Connect every requirement to the work
List the role’s essential tasks and the competencies needed to perform them. Separate capabilities needed on day one from those that can reasonably be learned after hiring. Keep a degree requirement when it reflects necessary preparation; otherwise, consider whether experience, training, or demonstrated ability can provide relevant evidence.
Use assessments that measure actual job skills
For suitable roles, consider structured interviews, work samples, or other job-related assessments. Apply the same criteria to candidates and make assessments accessible. A test that is difficult to administer consistently, unrelated to actual duties, or inaccessible to some candidates can undermine the decision it is meant to improve. The OECD identifies reliability, scalability, cultural resistance, and unconscious bias as continuing challenges.
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Change requirements in a defined set of roles rather than assuming one policy fits the organization. Compare results with a prior baseline, tracking applicant mix, assessment results, time to hire, quality of hire, and retention. This helps an employer judge whether its process works in its own setting; it does not turn a small pilot into proof that the approach will work everywhere.
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What employers should take from the comparison
The practical choice is not “skills or education” in the abstract. It is whether each selection criterion is relevant to the work and whether the employer can evaluate candidates fairly and consistently. Use degrees where they are required or genuinely job-related; where they are not, give candidates a credible way to demonstrate the skills the role needs. Neither a degree filter nor removing one, by itself, guarantees a stronger workforce.
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