Skills-Based Hiring: How the Public Sector Can Use It to Their Advantage

The bottom line in the Bureau of Labor Statistics’ April jobs report is an all-too-familiar reality for public- and private-sector employers alike: the U.S. has an estimated 9.9 million job openings.

Americans exited the workforce in historically high numbers during an unparalleled global pandemic three years ago and, for myriad reasons, many remain on the sidelines, according to a recent report by the U.S. Chamber of Commerce. The current labor participation rate hovers around 62%, the report found.

If ever there was a time for creative recruitment and hiring strategies among all employers, this is it.

Already in corporate America, a growing number of companies—Boeing, Walmart and IBM to name a few—have embraced skills-based hiring practices, placing a greater emphasis on practical skill sets and less on four-year college degrees.

For them and others, finding qualified candidates who have done the job is as critical as having learned it in theory. Perhaps more so. The construction industry is the gold standard because it for decades has prioritized on-the-job-training and hard work above book learning for many sector jobs.

Fortunately, public sector employers are following suit for an obvious reason: They need more talent.

A 2021 survey by MissionSquare Retirement, formerly the International City/County Management Association, reported public sector recruiting is difficult at best, particularly in health care, corrections, policing, skilled trades and engineering. The public sector can’t compete with private companies because it generally lacks the flexibility to offer higher salaries and meet market demand.

During the past year, governors in Alaska, Georgia, Maryland, North Carolina, Pennsylvania and Utah have issued executive orders aimed at reducing state government job vacancies. Some eliminated requirements for bachelor’s degrees for huge swaths of positions, while others ordered that relevant work experience is a substitute for education for most jobs.

First President Donald Trump in 2020 and then President Joe Biden in 2022 have issued executive orders to limit the use of educational requirements in favor of a skills-based approach.

Right before the pandemic, Boulder County, Colo., home of the state’s largest public university, dropped its four-year degree requirement for jobs. In 2021, the county hired 13% more non-degreed people compared to 2019, and saw a 10% increase in the number of employees of color hired that year, too.

Like a game of dominoes, this approach will catch on, from the massive federal government system to the smallest town authority. It will move from one state to the next, and then trickle down to counties to cities.

One such domino, the Chance to Compete Act of 2023, is currently in Congress. The bill would implement merit-based reforms to the civil service hiring system, replacing degree-based hiring with skills- and competency-based hiring.

There is no doubt that education is important, but some young people can’t afford to go to college or have no desire to spend the time and money to earn a degree. These people are due the same opportunities to compete in life and become successful.

Besides do we really need to worsen a crippling student loan debt crisis of $1.75 trillion in the U.S.? A recent report from the Chamber of Commerce suggests that 55% of students from public four-year institutions carry student loans. The average borrower owes $37,172, while more than 600,000 borrowers owe more than $200,000.

Beyond these staggering statistics, there are four more benefits to skills-based recruiting and hiring.

Greatly improved  diversity in the workplace. Any diversity, equity and inclusion employment expert will tell you stiff educational requirements are a large stumbling block for many people from diverse backgrounds.

The ability to succeed in life—to chart one’s own course and to land a job that is your passion—is clearly impacted by employment restrictions of four-year-college degrees. The removal of that barrier has already resulted in a more diverse workforce in Boulder County.

Greatly improved gender diversity in public and private organizations. Research in the Harvard Business Review showed men and women share similarities in how they browse for jobs. However, women are 16% less likely to apply for positions after viewing them, and they apply to 20% fewer jobs than men. This is because women hold back if they don’t meet 100% of the criteria—including education requirements while men usually apply after meeting about 60%.

A bigger talent pool for the public sector. Candidates who previously couldn’t qualify for government jobs, and those in the private sector who may never have considered them, will now.

Connecting work to workers. Finding candidates with public-sector mindsets from lived experiences could be a win-win for all.

Of course, public-sector leaders need to be mindful of the downsides to substituting experience for a degree and plan for such. 

The most obvious downside is attracting people who truly don’t qualify. One solution is requiring years of experience commensurate with years of schooling, and smart hiring leaders will create a litmus test to ensure that a candidate lacking a piece of paper vouching for knowledge can demonstrate aptitude for the job.

Another risk is that the shift to skills-based hiring may create the false perception that college graduates are more capable than those without a degree. But this presents an opportunity for public-sector managers to create a pathway for continuing education and career growth for existing employees and those new to their organizations.