Skill-based hiring vs. degree-based hiring: Which one works best

As the job market continues to evolve, employers face a critical decision: should they prioritise degrees or focus on the skills a candidate brings to the table? The debate of skill-based hiring vs. degree-based hiring is more relevant than ever. In an era of rapid technological advancements and shifting market needs, your hiring approach can make or break your team’s success. Let’s explore both methods and how they can shape the future of your business.

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Understanding skill-based hiring

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Skill-based hiring has gained significant traction as businesses look to streamline their recruitment processes and hire employees who are immediately effective in their roles. Unlike traditional degree-based hiring, skill-based hiring focuses on evaluating a candidate's practical abilities and expertise in areas directly related to the job.

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Employers can assess skills through a variety of methods, such as skills assessments, employee on-the-job tests, portfolios, or case studies. These hands-on evaluations give a clear picture of how well a candidate can perform the tasks that matter most to your company.

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By shifting the focus from theoretical knowledge to real-world capability, you make your hiring process more practical and tailored to the needs of the position. Additionally, this approach helps to reduce hiring bias since candidates aren’t automatically dismissed for not having a formal degree, which can be a barrier to talented individuals with real-world experience but no academic credentials.

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The benefits of skill-based hiring

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One of the most significant advantages of skill-based hiring is its potential to diversify the talent pool. By removing degree requirements, employers can tap into a wider range of candidates, including individuals who may have gained experience through apprenticeships, self-learning, or previous jobs but did not attend formal educational institutions. This can be especially important in industries that require practical expertise over academic qualifications, such as tech, creative fields, and trades.

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Moreover, skill-based hiring directly impacts business productivity. Candidates selected for their practical abilities and hands-on experience tend to adapt quickly, which reduces the time spent on training and onboarding. Instead of focusing solely on educational pedigree, employers can ensure that candidates are aligned with the specific needs of the role and company culture.

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This approach also tends to improve employee retention, as workers who are hired based on their actual skill set are more likely to feel capable and confident in their roles. Consequently, this leads to better job satisfaction and long-term success for both employees and employers.

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Understanding degree-based hiring

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Degree-based hiring is a long-established practice that remains common in many industries. It focuses primarily on academic qualifications and formal education as indicators of a candidate’s potential. Employers often seek candidates with specific degrees or certifications, believing that academic success reflects a certain level of knowledge, discipline, and ability to tackle complex problems.

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The key appeal of degree-based hiring lies in its standardisation. Degrees provide an easily comparable metric for evaluating candidates, which can save employers time during the initial stages of the hiring process. In industries where technical expertise or theoretical knowledge is paramount, degrees often serve as a quick way to filter out candidates who do not meet the educational benchmarks.

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However, this approach may overlook candidates with relevant work experience or practical skills that could be equally valuable, leading to a narrower selection process. Despite this, for many businesses, degree-based hiring continues to be a reliable way to assess a candidate’s ability to excel in a specific role or industry.

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The benefits of degree-based hiring

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Degree-based hiring can be beneficial in fields where specialised knowledge is crucial. Professions like medicine, law, or engineering often require a deep understanding of complex concepts and principles, which is typically obtained through formal education. Degrees also provide a level of standardisation, making it easier to compare candidates.

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For industries that rely heavily on research, development, or academia, a degree can be a good indicator of a candidate’s capacity for critical thinking, problem-solving, and innovation. In these cases, a degree-based approach can help make sure the candidate has the necessary theoretical framework to succeed.

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The challenges of skill-based hiring

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While skill-based hiring offers many advantages, it’s not without its challenges. One of the main difficulties is the need for effective evaluation tools. Unlike degrees, which are easy to verify, assessing a candidate's skills can be more subjective.

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Additionally, skill-based hiring can sometimes overlook candidates who may not excel in traditional assessment formats but possess the potential for growth and adaptability. There’s always the risk of undervaluing qualities like creativity, leadership, and cultural fit, which can be harder to assess through skills alone.

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The challenges of degree-based hiring

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Degree-based hiring also comes with its own set of challenges. For one, it can be limiting in terms of diversity and inclusion. By placing too much emphasis on formal education, you may inadvertently overlook candidates with real-world experience but without the specific degrees you’re seeking.

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Moreover, a degree doesn’t always guarantee job readiness. Many degrees are theoretical and may not prepare candidates for the practical challenges they will face on the job. This mismatch between academic knowledge and real-world application can result in a longer onboarding process and additional training costs.

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Which one works best?

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So, which is the better approach: skill-based hiring or degree-based hiring? The truth is, both methods have their strengths and weaknesses. For some roles, especially in highly technical or specialised industries, a degree may still be the best indicator of a candidate’s potential. However, for many modern businesses, skill-based hiring offers a more flexible and inclusive approach that focuses on what truly matters: the ability to perform the job.

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Ultimately, the best approach may lie in a combination of both methods. By considering both a candidate's educational background and their practical skills, you can create a more well-rounded and effective recruitment strategy that meets your company’s needs.

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At Thrive, we specialise in offering customisable assessments to help you make data-driven hiring decisions. Our platform enables you to assess both skills and cultural fit, making sure you hire the right people for your team. Let us help you streamline your recruitment process and find the best candidates for your business.

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