?As U.S. employers struggle to find workers with the competencies and skills they need, HR departments are beginning to adopt skills-based hiring practices, Mark Smith, SHRM’s director of HR thought leadership, told members of the House Committee on Education and the Workforce on June 22.
“Every day, businesses miss out on talented people because their gifts, aptitude and skills are more challenging to identify than a degree on a resume,” Smith said in prepared remarks. 
He was among four panelists appearing before the Congressional hearing, “Competencies Over Degrees: Transitioning to a Skills-based Economy.”
Other panelists were:
- Karin Kimbrough, chief economist, LinkedIn Corp., based in Sunnyvale, Calif.
- Papia Debroy, senior vice president of insights, Opportunity@Work, a nonprofit in Washington, D.C.
- Dan Healey, head of people for customer success, SAP, which has U.S. headquarters in Newtown, Pa.
Smith’s testimony includes SHRM’s recommendations to Congress relating to the Workforce Innovation and Opportunity Act and the Advancing Skills-Based Hiring Act.
Rep. Virginia Foxx, R-N.C., chairs the education and workforce committee. The hearing covered a wide range of ways for workers to gain and employers to assess skills, including the value of formal and informal apprenticeships, Pell Grants, skill assessments and credentials.
“There is a growing recognition that the old ways of identifying talent are not working for today’s economy,” Foxx said in prepared remarks as she opened the hearing. “To address this issue, job creators across the country are shifting to skills-based hiring to broaden the talent pipeline and fill in-demand, good-paying jobs.”
Debroy pointed out that when employers use a college degree as a job requirement, they create a “paper ceiling” that “automatically screen[s] out 80 percent of Hispanic workers, more than 70 percent of African Americans, 75 percent of rural Americans and nearly 70 percent of veterans.”
There is a movement afoot among state governments to remove a college degree as a job requirement, she said, noting that more than a dozen states in the past 12 months have removed such requirements.
And Kimbrough pointed to LinkedIn data that indicated about 19 percent of job postings—or 1 in 5—in the U.S. no longer require degrees. That’s up from 15 percent in 2021.
SHRM’s 2022 Talent Research Trends report found 79 percent of HR professionals consider pre-employment skills assessments to be as, or more, important than traditional criteria such as degrees or years of experience when determining which applicants are most qualified for a job.
“It’s time we stop making the assumption the only place to get skills is through college and getting a college degree,” Smith told committee members. “Organizations should worry more about the skills and less about where they came from.”
Smith gave the committee information on how employers can use skill assessments to gauge a job applicant and broaden the pool of job applicants from which to hire.
Skills assessments, he pointed out, are not cognitive ability tests. They are “unbiased and validated assessments that measure the critical knowledge and skills required to perform specific jobs,” he said in written testimony. “It is the use of job-relevant tests of knowledge and skills.”
However, SHRM research has found the use of skills assessments is limited because:
- Employers don’t believe the tests are worth the required time or effort.
- Employers need more understanding about creating and validating the tests, which “does not have to be overly burdensome,” Smith said.
One approach is to rely on external credentialing organizations, such as the certifications large software companies create that involve rigorous testing to demonstrate various competencies, Smith noted.
He also pointed to O*NET, which the U.S. Department of Labor and the Employment and Training Administration developed to document tasks and worker requirements. It provides information about the nature of nearly 1,000 occupations.
- Employers fear lawsuits or penalties from the Equal Employment Opportunity Commission or other government agencies and so believe it’s “prudent to avoid testing altogether,” Smith noted in his written remarks.
Skills-based credentials can be challenging for employers because of the increasing number of such programs, Foxx observed.
“Consistent and transparent information about credentials and the competencies they indicate is vital,” she said. Information on credentials should be funded “and easily accessed through the workforce system,” she added.
“It’s really time to rethink how we hire and grow talent,” Kimbrough said. “We see talent everywhere but not access to opportunities everywhere.”
Other SHRM Resources:
SHRM Foundation Supported by CKF Announces Partnership to Elevate Skills-Based Hiring in the Workforce, SHRM press release, June 2023
Skilled Credentials: Skilled Credentials at Work, SHRM Foundation Resource Page, June 2023
Using Skills Assessments Over Education, Experience Requirements, SHRM Online, August 2022