How the Federal Government Made Skills-Based Hiring a Reality

​Sometimes HR innovations come from the unlikeliest of places, but few sources may be more surprising than the federal government. Yet, in the midst of the COVID-19 pandemic, the nation’s largest employer did something that the most innovative private companies have generally failed to do, it removed college degree requirements and preferences from job postings and instead embraced skills-based hiring. 

It may seem that skills-based hiring’s moment has come. SHRM, the U.S. Chamber of Commerce and major companies like IBM have been moving in this direction for years. Dozens of the nation’s largest employers led by the Business Roundtable recently signed on to explore skills-based hiring with an explicit focus on, in the words of Walmart CEO Doug McMillon, “addressing racial equity and justice in the areas of education and workforce.”

Making real change in these areas has proven harder. Some well-known companies have already done away with degree requirements. However, the likes of Google or Tesla will be flooded with extremely talented applicants no matter how they set standards and remain magnets for self-taught prodigies who skipped college for different reasons than most. Making skills-based hiring truly scalable will require a genuine emphasis on expanding applicant pools in order to promote diversity and find hidden talent, not simply to leave the door open for the next Bill Gates or Mark Zuckerberg.

Employers Need Partners and a Playbook

The overdue focus in recent years on expanding the hiring aperture to include more women, racial minorities, and the formerly incarcerated does not simply support skills-based hiring, it depends on it. Closing achievement gaps in reading and math proficiency as well as postsecondary educational attainment remains a critical priority, however, progress in the workplace will be slow if it requires a sudden revolution in K-12 education outcomes and college completion. 

Today, the proportion of white adults with at least a bachelor’s degree remains roughly equal to the proportion of Black adults with at least an associate degree, which is roughly equal to the proportion of Hispanic adults with some college experience or a degree. When even a bias-free, random selection of bachelor’s degree holders would be unlikely to result in a workforce that resembles the broader population, it is no wonder why even companies working hard to diversify are struggling. 

However, research from Innovate+Educate shows that “while only 1 percent of disconnected, high-risk young adults aged 16-24 could qualify for a job based on a degree requirement, almost 33 percent of those same young adults have the skills and cognitive abilities equivalent to college graduates.” HR leaders know this phenomenon well. Research from Harvard Business School, Accenture and Grads of Life found that three in five HR leaders and senior executives admitted to rejecting qualified talent simply because an applicant lacked a degree.

These and other studies have found that degree requirements not only harm applicants, but employers as well. They can drive up time-to-hire, cost-to-hire, increase turnover and require employers to pay a premium for applicants with additional student debt they hope to pay down. Employers are taking meaningful steps in this direction, but they have generally lacked the partnerships and a playbook necessary to take skills-based hiring to scale.

Working in state and federal government, I have long viewed barriers to opportunity as something to be addressed through public policy. However, at the U.S. Department of Education, I also worked with leading national employers and business groups in Washington, DC, such as the Business Roundtable and the U.S. Chamber of Commerce to explore ideas that shifted the focus to skills. SHRM CEO Johnny Taylor, Jr., SHRM-SCP, was instrumental in helping us ensure that this work reached HR professionals and benefited students enrolled at Historically Black Colleges and Universities. 

However, one conversation with a business leader stood out as it provided a needed dose of reality and inspiration. It was useful, he acknowledged, for the Federal government to change policies and encourage employers and universities to change practice, but how could the Federal government tell employers to get rid of college degree requirements when it was one of the worst offenders? He was right.

Executive Order 13932

The Federal government required a college degree for about one in three jobs. However, for the remaining two-thirds, a college degree could only be substituted with relevant experience. For those already working for the federal government, the purportedly simple path required applicants to spend enough time at the next-lowest step on the pay scale. However, at many federal agencies, entry points for many career tracks were few or nonexistent and so earning the necessary experience was impossible. If an applicant came from outside federal service, the road was even tougher. It was almost always easier for HR to check the bachelor’s degree box than go through an ill-defined equivalency process. 

To get a handle on these numerous challenges, I started by speaking with my agency’s HR staff. I was immediately impressed with the clear dedication the civil servants showed to their job and their willingness to try new things, particularly if we could work together to consider a wider and more diverse set of applicants. I then reached out to colleagues at other agencies, who had been thinking along similar lines and were eager to collaborate. 

Building a coalition was essential, but there would be no Congressional appropriation for this work and federal procurement rules meant that even minor changes to our HR systems—which were already many years behind the private sector—would take time and money we did not have. We faced many of the same challenges as those in the private sector too, but all of the restrictions combined to force us to become more creative. 

Thanks to the work of leaders at the Department of Education, Department of Labor, Office of Personnel Management (OPM), and the Office of Management and Budget (OMB), we received approval for the first steps through Presidential Executive Order 13932. Critically, the order removed degree requirements and preferences and created broad space for what federal jobs could require instead. 

Determining what will replace degrees is often where employers falter, in part because there are so many other credentials to choose from (Credential Engine’s online tool boasts nearly 600 related to Microsoft Word). Few people possess each one and so it is difficult to include them in job postings. However, more people will not earn these credentials until employers do just that and make them explicit paths to the jobs learners want. 

To overcome this critical catch-22 and avoid unhelpful and vague phrases in job postings such as “bachelor’s degree or equivalent experience,” we explored a system where multiple pathways could lead to each job. Rather than qualifying based on college credits earned, applicants would receive consideration if they possessed the required knowledge, skills and abilities. It did not matter if they achieved these through a traditional college program, work experience, military experience, apprenticeship, a bootcamp or learning on their own. 

The effort benefited from the fact that agencies had already mapped each job to a set of competencies covering both technical abilities and personality traits. While not perfect, it provided an extremely useful starting point. The next step was to match each competency to several credentials that could demonstrate a candidate’s proficiency in that area.

Some companies have created their own credentials, but we lacked the time, budget and authority for such a project. Proprietary credentials also lack relevance outside company walls, which limits employees’ long-term career growth and a company’s ability to use its credentials to recruit. Instead, we sought high-quality, third-party validated credentials where we could find them and, where we could not, portfolios and specific applicant-provided descriptions of their competency would do. We found applicant responses to specific prompts for each competency to be a simple, low-burden process for identifying qualified candidates with much greater validity than applicant self-ratings (usually on a simple 0-5 scale), which were also disallowed by the executive order. Structured interview processes could then help hiring teams dig deeper.

Not all job classifications were equally easy to tackle and so we started with those where agencies already knew what they wanted. Previously, a grantmaking position would only be open to college graduates, even though we were not aware of a college program emphasizing federal grants. So, immediately after hiring a college graduate, they would immediately be sent to a third-party training course. After the executive order, agencies could open the door to individuals without college degrees who were willing to get this (or similar) training on their own. Even though the training required a fraction of the time and money as a bachelor’s degree, each path gave applicants the same advantage.

Over time, as more people choose the faster and more affordable option, agencies (and private employers) will have a better sense of which credentials have value. Learners will too, which will allow many to shift to the most affordable training program that best meets their individual needs. 

Moving Forward in the Federal Government and Beyond

In a positive sign, OPM recently announced it is embarking on a needed update to the set of competencies assigned to each job. Peter Warren, the former OMB Associate Director, who was instrumental in getting the executive order approved by the White House, said he hopes OPM will “use the survey results and updated competency models to create and implement more and better competency-based assessments to replace a current process that is overly reliant on the actual competencies required to perform a job.”

Other remaining steps include continuing to update the government’s suite of assessments, identifying more third-party credentials that can be signaled for in job postings, and ensuring that every competency can be demonstrated in multiple ways, so that opportunity is maximized and no one has a monopoly over a given career path. If they are successful, the federal government may continue to be a model, opportunity-focused employer for years to come. In the meantime, there is now a playbook for private sector employers to embrace.

Michael Brickman is principal of Sheer Partners and former senior advisor at the U.S. Department of Education.