The Why, What, and How of Skills-Based Talent Practices

More jobs than ever require a four-year college degree, including many that never did in the past. Beth Berwick is among those calling for a retreat. “You have to take that requirement off of job descriptions,” she said. “It’s excluding 64% of the population — including 76% of Black Americans and 80% of Latinos.” Instead, she maintains, organizations should be hiring based on the skills they need.

Berwick made her comments during Work/23, an MIT Sloan Management Review symposium held in May 2023. Berwick is a partner at Grads of Life, which helps companies build inclusive talent practices. It’s a subsidiary of Year Up, a Boston-based nonprofit that works to bring equitable access to economic opportunity to all young adults.

Degrees weren’t always the default proxy for competence. Research conducted by Grads for Life, Harvard Business School, and Accenture in 2017 has shone a light on degree inflation. “Roles that used to not require a four-year degree all of a sudden were requiring them,” Berwick said.

Building a skills-based approach to hiring and talent development goes hand in hand with building a more equitable organization, she explained. That means reworking job descriptions, implementing ongoing skills training to improve retention and build pathways to advancement, and continually encouraging new mindsets that value inclusivity. Companies that start down this path might be surprised by how far they can go: Many organizations, Berwick said, have removed the four-year degree requirement from the majority of their roles.

Berwick described Grads of Life’s work with the Cleveland Clinic to bring skills-first practices to recruiting and retaining long-overlooked Black community members. The health organization rewrote 260 job descriptions for over 2,000 roles and removed the four-year degree requirement from 90%. It went on to hire or promote 1,019 Black employees into jobs with family-sustaining wages. Berwick noted that the project was named a critical priority by senior leaders at Cleveland Clinic — “specifically by their CEO” — which created organizationwide buy-in.

Berwick wasn’t able to get to all of the questions from attendees during the Work/23 event, so she answers some of them below. (Questions and answers have been lightly edited for clarity.)

How are you advising companies to develop unbiased hiring assessments?

We have done extensive research to identify practices with a strong evidence base of effectiveness. In the process of developing one of our tools, the Opportunity Identifier — which helps clients highlight areas where they can invest to advance in their diversity, equity, and inclusion journeys and benchmarks their progress to peers and competitors — we reviewed more than 100 academic papers and identified more than 300 best practices.

One of the best practices for developing unbiased candidate assessments is to remove candidate names from submitted application materials before reviewing them. Names can suggest different elements of a candidate’s identity, including race, gender, and ethnic background. To avoid the influence of bias, it is helpful to assess candidates’ submissions without knowing their names.

Another best practice is to use work sample tests that mimic the kind of tasks candidates will be doing on the job and evaluate them with a standard scoring rubric. This practice focuses the assessment on a candidate’s ability to perform the work and not on their professional or educational pedigree. We often work closely with clients to develop rubrics that reflect the relevant skills as identified by supervisors, colleagues, and experts.

We also help employers mitigate bias in employee assessments through our manager training programs. These are designed specifically to equip managers with the knowledge and tools to support, coach, and assess employees of diverse backgrounds.

Does skills-based hiring imply that even for entry-level jobs, candidates have a degree of proficiency in the required skills? How do you evaluate the value of experience in determining a fit?

For entry-level jobs, the list of required skills is often relatively short, though jobs might have preferred skills. (They might be defined as “nice to have but not required” or skills that can be acquired once in the role.)

The degree of proficiency required for a given skill can also vary depending on the job level. For example, an entry-level administrative assistant role might require basic writing skills, such as the ability to compose communication that’s free of grammatical and orthographic errors. A higher-level role might also require writing skills but at a higher level of proficiency so that, for example, the candidate is able to communicate ideas succinctly and persuasively, can tailor written materials to different audiences, and can explain complex concepts.

Now, how does experience factor into entry-level roles and skills? Well, there are many ways to acquire a skill, including outside of a professional setting. For example, volunteering at your community garden can teach collaboration skills; organizing your church’s activities can teach event-planning skills; caretaking for family members can involve time management, organization, and so many other skills. Employers should maintain their focus on skills over professional experience and other elements like educational attainment. Skilled talent can come from sources you least expect.

Are there typical types of roles or career paths where skills-based practices are likely to be the most — or the least — successful?

The optimal approach is to apply a skills-based strategy consistently across all roles in an organization. The reason is that at its best, skills-based employment is a culture shift that goes beyond removing degree requirements for a specific role. A holistic approach is important in fostering equity because it measures everyone by the same yardstick instead of creating a separate class of employees (that is, regular hires versus skills-based hires).

That being said, it can be helpful for companies to prioritize certain roles when first transitioning to a skills-based culture. Several elements come into play to determine the right starting places. First, departments or divisions whose leadership is committed to a skills-based strategy is a natural starting point, as committed champions can help lead the change-management process necessary for success. Another common lens is to focus on roles where the company has struggled to access talent. Skills-based practices often expand the talent pool (for hires from both within the company and outside of it) for a given role, so it can be a great way to solve for talent scarcity.

Another good way to prioritize roles for a skills-based strategy is to identify areas where the labor market is already exhibiting momentum. For example, in analyzing labor market data for our clients, if we find that a significant number of employees currently performing a certain role do not have a college degree, that is a good reason to stop requiring degrees for such a position. Similarly, if most competitors hiring for that role do not require a college degree, it’s a good idea for other companies to drop their degree requirements to remain competitive employers. These are often middle-skill jobs that require zero to five years of experience.

Finally, because skills-based employment is a means to build a more equitable organization, leaders should focus on expanding access to good jobs with family-sustaining wages and opportunities for advancement.