Want to advance skills-based hiring? Study suggests dropping degree requirements from public sector jobs
December 16, 2024
For the last ten years, skills-based hiring has been gaining momentum in the United States, especially in the public sector.
In the last two years alone, 25 states have committed to dropping unnecessary degree requirements for public-sector jobs, according to a new working paper from the National Bureau of Economic Research. As a result, in states with commitments, degree requirements listed on job postings for public-sector jobs have dropped 2.5 percent annually.
New policies “are opening jobs for STARs,” write the researchers, referring to workers who are “Skilled Through Alternative Routes.” Such policies “hold the potential to increase labor market access, reduce labor market inequality, and meet the talent needs of the public sector.”
While the observed decreases in degree requirements may seem modest, they mark a notable advancement—achieved in a short time and with few resources. Moreover, state commitments to drop degree requirements also appear to have knock-on effects, by drawing media attention to skills-based hiring and providing public leadership, the study suggests.
According to the study, Utah was the first state to pass a law establishing a skills-based hiring policy for public-sector jobs in 2021. Since then, 24 additional states have passed similar laws or enacted executive orders with similar aims. Red and blue states alike have acted.
But not all states have committed equally. Only 16% of states have allocated funds as part of their commitment. And 32% of states with commitments merely created task forces, without legislating or regulating that degree requirements be dropped. Yet despite such low investment, degree requirements are falling.
Some occupations have seen degree requirements drop more rapidly than others. Degree requirements for software developers saw the most significant drop. In states with commitments, college-degree requirements for software developers dropped from 52.8% to 23.5% of public-sector job postings, in the 12 months prior to and the 12 months after to a state commitment—for a 29.3% decrease. Degree requirements also dropped by large percentages for business operations and management jobs (from 57.7% to 34.4%) and mathematical occupations (from 64.7% to 46.1%).
While the study provides key data on changing degree requirements, it also suggests that, more generally, state policies have increased awareness of skills-based hiring. State and government commitments seem to make skills-based hiring more visible.
News coverage of skills-based hiring has climbed, the study shows, perhaps in response to state commitments. Media mentions of skills-based hiring—for both private and public sectors—rose by 58% between 2022 and 2024, the period when states began enacting rules for skills-based hiring. During that time, more media mentions were about the public sector (63.6% of all mentions) than the private sector (36.4%), suggesting changes in state policy were driving media coverage.
“This highlights the importance of the public sector in driving this increase in awareness of skills-based hiring and leading talent management practices,” comment the researchers.
In addition to studying the effects of state commitments, the researchers present results from a study of a public marketing campaign to promote awareness of skills-based hiring. Through surveys, the study found that a marketing campaign, called “Tear the Paper Ceiling,” nationally increased workers’ awareness of terms such as “tear the paper ceiling” and “skilled through alternative routes.” The campaign was orchestrated by AdCouncil and Opportunity@Work (which employs three of the study’s four authors).
Additionally, the study also provides a case study of how skills-based hiring is being implemented in Colorado.
While the study shows changes in awareness and job listings, more research will be needed to observe whether new laws and executive orders have changed hiring practices in fact. Previous studies have suggested that dropping degree requirements from job listings tends to have minimal impact on hiring.
Dropping degree requirements is widely viewed as a strategy for expanding job applicant pools and achieving DEI goals. As much as 62% of the adult workforce does not have a college degree. STARs workers—who are “skilled through alternate means”—face obstacles to employment and tend to have lower earnings.
The public sector is seen as an especially attractive target for skills-based hiring. State-level action has proven successful at raising general awareness of skills-based hiring, as the study suggests. But it may also bring more equity to the distribution of government jobs and help fill stubbornly open positions.
Historically, jobs in the public sector, compared to the private sector, have been more likely to require a college degree, the researchers observe. This historical trend remains true. Opening public sector jobs to STAR workers may be able to reduce worker shortages and make public institutions more inclusive.
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