Skills-based hiring: the evidence and the hype.

Few hiring reforms have had a smoother ride in public than skills-based hiring. It enjoys bipartisan support, employer enthusiasm, and worker advocacy. And the research base genuinely condemns the practice being reformed. That is what makes the follow-up measurement one of the most instructive results in this library. It counted the gap between the announcements and the hires. That gap isolates exactly what retiring a proxy takes, beyond good intentions.

“We no longer require a college degree.” Over the past decade that sentence has moved from contrarian op-eds to the career pages of the world’s largest employers. IBM reframed thousands of openings as “new collar” jobs, and a familiar roster of technology, finance, and healthcare firms followed with pledges of their own (Fuller, Langer & Sigelman, 2022). From 2022 onward, a wave of U.S. state governments — Maryland, Utah, and Pennsylvania among them — dropped the bachelor’s requirement from many civil-service postings.

Behind those announcements sits a genuinely strong research case. In front of them sits an increasingly awkward measurement. When researchers counted actual hires rather than press releases, the change in behavior was a small fraction of the announced change. Both halves of that story deserve to be taken seriously. Together they say something precise about what it takes to retire a proxy.

Degree inflation: the original diagnosis

Every reform movement needs a founding document — the text that turns scattered grievance into measured diagnosis. Skills-based hiring has an unusually good one. Its exhibits are simple enough to redo in any labor-market dataset, and damning enough to have survived seven years of scrutiny.

The modern case begins with Dismissed by Degrees, Fuller and Raman’s 2017 Harvard Business School report, which analyzed more than 26 million U.S. job postings (Fuller & Raman, 2017). Its central exhibit is a mismatch the authors called degree inflation: employers demanding bachelor’s degrees for roles whose current holders mostly do not have one. The signature example is the production supervisor. 67% of postings for the role asked for a college degree — yet only 16% of the people actually employed as production supervisors held one.

The report’s employer survey pointed in the same uncomfortable direction. Degree-gated versions of middle-skills roles took longer to fill and cost more to staff, because degree holders commanded a pay premium. Yet employers themselves reported little productivity gain for those hires, alongside higher turnover (Fuller & Raman, 2017). Paying more, waiting longer, and churning faster for similar output — that is what relying on a bad proxy looks like from the inside.

What the degree was standing in for

None of this is mysterious under classic signaling theory. In Spence’s original model, education can pay off for employers even if it teaches nothing job-relevant. Completing a degree correlates with traits that are otherwise hard to observe, and that link alone gives the credential value (Spence, 1973). A degree is a cheap-to-read signal in a market where the underlying skill is costly to measure. Proxies of that kind are not dropped because they are crude. They are dropped when something cheaper and more accurate arrives.

As a predictor of actual job performance, the credential itself has never ranked well. Schmidt and Hunter synthesized eighty-five years of selection research into one validity table — a ranking of how well each hiring method predicts later performance. In that table, years of education sat near the bottom, far below work-sample tests, cognitive-ability measures, and structured interviews (Schmidt & Hunter, 1998). A major re-analysis in 2022 revised many of those validity estimates downward. But it preserved the ordering that matters here: direct measures of job-relevant knowledge and behavior beat indirect credentials (Sackett et al., 2022).

The degree proxy also does its damage before any human reads a résumé. Fuller and colleagues’ Hidden Workers report found that the vast majority of large employers use applicant-tracking or recruiting-management software to filter and rank candidates automatically. In the same report, 88% of employers admitted that these systems screen out qualified high-skills candidates simply because they fail to match the configured criteria (Fuller et al., 2021). The authors estimated more than 27 million “hidden workers” in the United States. These are people willing and able to work who are shut out, over and over, by proxy-based filters — with degree requirements prominent among them.

The equity arithmetic

The proxy’s cost is not evenly spread — and that skew is what turned degree inflation from an efficiency complaint into a policy movement. Most working adults in the United States do not hold a bachelor’s degree. The non-degree population also leans toward exactly the groups whose access to higher education was historically constrained. So every degree-gated middle-skills role converts a gap in college access into a gap in employment — mechanically, at screen time (Fuller & Raman, 2017), (Fuller et al., 2021).

The “hidden workers” framing made the scale concrete. Tens of millions of capable people are filtered out before any human judgment occurs — by configurations nobody currently employed can see operating.

The equity case, though, cuts through to the same conclusion as the validity case. Deleting the requirement does not, by itself, help the excluded. A worker without a degree gains nothing from a reworded posting if the ranking beneath it still favors the credentialed. The same worker gains everything from an assessment that lets demonstrated skill outscore a résumé. In both the efficiency and the fairness accounting, the route from proxy to opportunity runs through measurement. That is why the two groups pushing skills-based hiring — employers and advocates — need the same missing instrument.

The reset, as announced

Change did show up in the data — first in postings. The Burning Glass Institute analyzed tens of millions of online job ads and documented what it called an emerging degree reset. Between 2017 and 2019, employers cut degree requirements in 46% of middle-skill and 31% of high-skill occupations (Fuller et al., 2022). The report was careful to split resets into two kinds. Structural resets are deliberate, lasting rewrites of role requirements, visible at a set of large named employers. Cyclical resets are the temporary loosening that came with pandemic-era labor scarcity.

Writing in Harvard Business Review, Fuller, Langer, and Sigelman read the same data as a genuine and consequential shift. The shift was concentrated in middle-skill work. And it was led by firms that had rebuilt job descriptions around skills rather than credentials (Fuller, Langer & Sigelman, 2022). On stated requirements, the degree reset was — and remains — real.

Announcements versus hires

Here the story turns from diagnosis to audit. The audit is the part practitioners most need to sit with. It measured the distance between what organizations said and what their applicant-tracking data shows they did.

Stated requirements are not hires. In 2024, the Burning Glass Institute and Harvard Business School’s Managing the Future of Work project published the follow-up study (Burning Glass Institute & Harvard Business School, 2024). It tracked what actually happened at firms after they removed degree requirements from specific roles. The headline finding: for all the pronouncements, the resulting shift in who gets hired came to fewer than one in 700 U.S. hires in 2023.

The texture of the report is as telling as its headline. A minority of firms — the authors call them leaders — changed their postings and then measurably changed whom they hired. But for a large share of roles where the requirement was deleted, the mix of new hires barely moved. The degree line left the job ad and kept operating inside the screen. Much of the announced change, as the authors put it, was change in name only (Burning Glass Institute & Harvard Business School, 2024).

Why behavior lags the press release

The simplest explanation: deleting a requirement removes information without adding any. A recruiter facing two hundred résumés and no degree filter still needs some basis for ranking them. Without a better signal, the familiar proxy re-enters — through habit, through hiring-manager preference, or through applicant-tracking settings that were never updated to match the new posting language (Fuller et al., 2021).

A second explanation: some of the reset was never conviction in the first place. Modestino, Shoag, and Ballance showed that stated requirements breathe with the business cycle. In the slack labor market after the Great Recession, employers raised education and experience requirements for the same occupations — opportunistic “upskilling” of postings when applicants were plentiful (Modestino, Shoag & Ballance, 2020). As the market tightened after 2010, those requirements fell again (Modestino, Shoag & Ballance, 2016). So some share of the degree reset is a tight-labor-market effect. It could quietly reverse in the next downturn, with no announcement at all.

A third explanation works on the hiring manager’s private incentives, and it may be the most durable. A credential functions as decision insurance. The manager who hires the graduate and gets a bad outcome chose defensibly. The manager who hires the non-graduate and misses owns the choice personally.

Now drop the degree without offering a substitute signal that carries institutional standing — a validated score the organization has blessed. Each manager must then carry risk the old proxy used to absorb. Rationally, they decline. This is why pressure from the top moves postings but not hires. The push changes the advertisement while leaving the risk allocation untouched — and the risk allocation is where the proxy actually lives.

What the evidence doesn’t show

This literature is often summed up with more confidence than it has earned, in both directions. Four limits are worth stating plainly.

• Outcome data on non-degree hires is thin. The evidence that workers hired without degrees perform comparably rests heavily on employer self-report and on middle-skills roles (Fuller & Raman, 2017). Large-scale, causal comparisons of post-reset hires — performance, promotion, retention over years — mostly do not exist yet.
• Postings measure stated preferences, not selection. Requirements listed in advertisements move with the business cycle and with posting conventions (Modestino, Shoag & Ballance, 2016), and firms sometimes hired non-degree candidates even while postings demanded degrees. Both the inflation and the reset are partly artifacts of what gets written down.
• The one-in-700 figure is a short-window estimate. It captures near-term behavior at firms that changed posting language (Burning Glass Institute & Harvard Business School, 2024). It cannot rule out slower cultural change, spillovers to firms that never made announcements, or effects that compound over a decade.
• “Skills-based hiring” is not one intervention. The label spans everything from deleting a sentence in a job ad to redesigning selection around validated assessment. Studies of the former say little about the latter, and much public argument mixes the two.

Where the evidence stops

1. 1Outcome data on non-degree hires is thin
2. 2Postings measure stated preferences, not selection
3. 3The one-in-700 figure is a short-window estimate
4. 4“Skills-based hiring” is not one intervention

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What would make the reset real

Read together, the two halves of this literature are not in tension. The diagnosis has held up: degrees are a costly, low-validity proxy that shuts out millions of capable workers. The follow-up data implies the prescription: proxies persist until they are replaced, not merely renounced. And the selection literature has been unusually consistent about what a replacement looks like: measure the skill directly. Work samples, job-knowledge tests, and structured evaluations sit at or near the top of every validity ranking, while credentials sit near the bottom (Schmidt & Hunter, 1998) (Sackett et al., 2022).

The replacement program has concrete parts, and each answers one of the persistence mechanisms above. A role-skills spec answers “what does this job actually require?” — the question the degree used to answer badly. Validated assessment answers the recruiter’s ranking problem. It restores the information the deleted requirement removed.

Institutional endorsement of the score — this is our standard, hiring against it is defensible — answers the manager’s insurance problem. And reconfigured screening software answers the automation problem, because a filter nobody edited will keep enforcing the sentence somebody deleted (Fuller et al., 2021). Skip any one part and the proxy re-enters through the unguarded door.

That reframes skills-based hiring as a measurement program rather than a communications program. The firms that moved their hiring numbers paired the deleted requirement with the harder work of defining role skills and assessing them (Burning Glass Institute & Harvard Business School, 2024). The firms that didn’t, deleted a sentence.

The bottom line

Pull the threads together and the seven-year arc reads less like a failed reform than an unfinished one. The diagnosis held. The announcements happened. And the missing piece is now precisely named.

Degree inflation is one of the better-documented distortions in modern labor markets. The case against the degree-as-proxy is strong on both economic and psychometric grounds. The hype is not in the diagnosis. The hype is in treating an edited job posting as a changed hiring process. The follow-up evidence now puts a precise, unflattering number on that confusion.

The proxy-shaped hole in the hiring funnel has to be filled with actual measurement. Where it is, the reset shows up in hires. Where it isn’t, it shows up only in the press release.