65 key skills-based hiring statistics for 2025

Skills-based hiring, a concept introduced by the New Options project in 2012, has become the future of recruitment. It reshapes recruitment by focusing on abilities over traditional degree requirements. 

Between 2014 and 2023, the number of roles eliminating degree requirements surged 4 times, signaling a shift in how companies approach talent acquisition. 

Learn 65 of the most important skills-based hiring statistics that help boost retention, salary growth, employee satisfaction, and more in this blog.

Summarise this post with:

What is skills-based hiring?

Skills-based hiring is a recruitment approach that focuses on a candidate’s abilities and skills rather than their educational degrees. This method evaluates what candidates can do rather than what they have studied.

Related: What is skills-based hiring & why is it important?

Statistics that favor skills-based hiring

75% of companies are moving toward hiring based on skills. Over 40% of them now prioritize skills over formal degrees when selecting candidates. (SHRM)

79% of employers say skills assessments are as important, if not more than other criteria in the hiring process. (SHRM)

91% of learning and development (L&D) professionals agree that soft skills, often called “human skills,” are becoming more critical. (LinkedIn workplace learning report )

While 91% of recruiters feel college education doesn’t align with workforce needs, 66% of students believe they’re ready for work. This mismatch often challenges young professionals, but mentoring programs and skill-based onboarding can help bridge the gap.

The Burning Glass Institute reports that 15.7 million people are excluded from candidate pools because 37% of middle-skilled jobs still require a degree.

Recruiters who focus on skills rather than resumes see up to 22% higher response rates to their messages. (LinkedIn)

LinkedIn data reveals that the wholesale industry increased its InMail acceptance rate from 10% to 13% in a year by focusing on skills, a 24% improvement.

WorkIndia reports that over 831,000 employers, including small and medium-sized businesses, are shifting their focus to skill-based hiring.

LinkedIn analysis shows that when U.S. companies evaluate candidates based on skills rather than titles or education, the talent pool grows nearly 19 times.

80% of employers in the U.S. now focus on skills rather than formal qualifications. (Foundit)

76% of employers say hiring for skills gives better outcomes than relying on education. Among these, 92% report finding higher-quality talent, and 89% find it a better predictor of on-the-job success.

82% of companies using skills-based hiring have streamlined their hiring processes, making them faster and more efficient. (Gogpac)

Skills-based hiring has increased by 12% over the past year, reflecting a significant trend toward this approach.

A Foundit report shows a sharp rise in the use of assessments: 50% more in AI and ML, 30% more in product management, and 55% more in cloud computing.

McKinsey reports that 20% to 30% of key roles are not filled by the most suitable people in many organizations.

72% of hiring professionals use skills assessments to check if candidates are qualified. Additionally, 34% of hiring managers say they prioritize potential over experience. (HR Magazine)

In 2024, 81% of U.S. employers are adopting skills-based hiring, up from 73% in 2023 and 57% in 2022.

17% of organizations feel confident about predicting future skills needs, and just 16% plan to invest heavily in learning in the next three years. (Deloitte)

Skill-based hiring leads to remarkable outcomes for organizations:

• Talent placement: 107% improvement in placing people in the right roles
• Reputation: 98% more likely to be recognized as a great place for career growth
• Retention: 98% better at retaining high-performing employees
• Innovation: 52% more likely to foster innovation
• Change readiness: 57% more prepared to adapt to change
• Cost-to-hire: Nearly 90% reduction in hiring costs
• Time-to-hire: Over 91% faster hiring process
• Workforce experience: 79% more likely to provide a positive experience for employees

With a skills-first approach, global talent pools have grown nearly 10 times. (LinkedIn)

Employer adoption statistics

80% of Fortune 500 companies use cognitive ability tests for hiring.

75% of The Times’ Top 100 Companies use psychometric testing to evaluate candidates.

A Society for Industrial and Organizational Psychology study shows that over 45% of companies use Situational Judgment Tests (SJTs) to assess decision-making and problem-solving skills.

68% of employers use job skill tests to measure candidates’ readiness for specific roles.

Talent Board reports that 52% of employers assess job-specific skills during interviews.

SHRM data reveals that 73% of employers embraced skills-based hiring last year, up from 56% in 2022.

A recent SHRM survey found that 1 in 4 organizations using pre-employment tests plans to expand their use in the next five years.

70% of paid job posts on LinkedIn require specific skills. 

Job posts that mention skills see a 19% increase in the view-to-apply rate compared to those that don’t.

McKinsey reports that hiring for skills is 5x more predictive of job performance than hiring based on education and more than twice as effective as hiring based on work experience. 

Employees without degrees also stay in their roles 34% longer than those with degrees.

Adoption of skills-based hiring statistics

In 2023, India saw a 12% rise in adopting skill-based hiring practices.

In the U.S., 81% of employers are using skills-based hiring in 2024, a significant increase from 73% in 2023 and 57% in 2022.

Around 20% of job postings in the United States have dropped degree requirements.

Over half (56%) of employees prefer hiring processes incorporating skills-based assessments.

Skill shortage

Skills shortages remain a global challenge: 60% of businesses say skills gaps in the local labor market are the biggest barrier to business transformation, and only 39% have a positive outlook on talent availability over the next five years (WEF, 2024).

A recent report found that 87% of companies either have a skills gap or expect one in the next two years. Hiring based on skills helps companies better address their talent shortages.

Current scenario of skills-based hiring statistics

According to a SHRM report, 73% of employers adopted skills-based hiring last year, a jump from 56% in 2022.

A NACE study found that 64.8% of employers use skills-based hiring practices for entry-level roles.

More than 70 million U.S. adults have gained skills through alternative routes, qualifying them for more senior roles than they currently hold.

In 2021, LinkedIn enabled over 400,000 companies to make skills-based hires.

Benefits of skills-based hiring statistics

Employees without a four-year degree tend to stay with companies 34% longer than those with degrees.

According to Indeed, only 18% of job postings in the U.S. still list degree requirements, and formal education requirements have decreased in 87% of occupational sectors.

In 2023, nearly 75% of companies adopted skills-based hiring to tackle skills gaps, address talent shortages, and seize new business opportunities.

According to LinkedIn data, employers who focus on skills when hiring are 60% more likely to make successful hires than those who don’t.

Employees preference toward skills-based hiring statistics

88% of employees feel positive about skill-based hiring in their company.

In 2024, only 22% of employees in the United States reported no skill-based hiring at their company.

Skills-based hires report higher job satisfaction, with 38% saying they are very happy in their roles, compared to only 28% of those hired based on experience alone.

Skills-based hiring statistics related to diversity and inclusion (DE)

Skills-based hiring has been shown to increase the representation of women in underrepresented roles by 24% compared to traditional hiring methods.

Accenture research shows that companies using a skills-based approach see a 1-2% revenue boost for every 10% increase in gender equity across different identities.

80% of business executives believe hiring based on skills rather than job history or tenure can reduce bias and improve fairness in the workplace.

Future scenario of skills-based hiring statistics

A recent Georgetown University’s Center on Education and the Workforce study claims that by 2031, 72% of jobs will require tertiary education or training to develop workplace skills.

 95% of employers believe skills-based hiring will become the dominant recruitment trend. 

Korn Ferry’s research suggests that organizations focused on skills are 57% more likely to anticipate and effectively respond to changes.

Since 2019, the share of recruiter searches on LinkedIn that include a skills filter has grown by 25%, illustrating a shift towards prioritizing skills over experience in recruitment practices.

People are responding by continuously developing their skills. In 2021, LinkedIn members added 286 million skills to their profiles, a 22% increase from 2020.

According to LinkedIn’s India Future of Recruiting Report 2023, 75% of recruiters view skills-based hiring as the way forward and plan to accelerate its adoption within the next 18 months.

Since 2015, the skill sets required for jobs have changed by about 25%, and this change is expected to reach 50% by 2027.

Over to you

There you go. Now, you have 65 critical skills-based statistics to guide your hiring decisions and workforce planning. As companies continue to embrace this approach, it’s clear that focusing on skills over degrees will shape the future of recruitment. 

Curious on how you can make the shift from traditional hiring? Book a free demo or reach out to us. Alternatively, check out 100 must-know HR and recruitment statistics for more insights.