Fixing the Talent Disconnect with Skills-Based Hiring

At a time when organizations continue to struggle with persistent hiring challenges, a growing number of HR leaders are questioning whether the problem is truly a lack of talent — or a failure to recognize it. The issue was front and center during Western Governors University (WGU) President Scott Pulsipher’s April 21 general session at SHRM Talent 2026 in Dallas, where he challenged long-standing assumptions about workforce readiness and outlined a path toward a more inclusive, skills-driven talent ecosystem.

“WGU is focused on this because we believe education is the surest path to opportunity,” Pulsipher said. “The more individuals can acquire knowledge, skills, and ability, it increases their potential to advance their life. It’s a two-sided challenge, however, you also need to solve the needs of the workforce.”

For senior HR leaders, that “two-sided challenge” is becoming increasingly urgent. Despite a relatively stable labor market, many organizations are still reporting difficulty finding qualified candidates. SHRM President and Chief Executive Officer Johnny C. Taylor Jr., SHRM-SCP, underscored that disconnect from the employer perspective.

Taylor moderated a fireside chat with Pulsipher after the WGU leader’s initial remarks.

“When I talk to CEOs about what is keeping them up at night, talent is at the top of the list,” Taylor said. “There continues to be a discussion between our CEOs and other C-suite leaders that we have a talent shortage. They say they can’t find the talent they need.”

Pulsipher reframed the issue as one of alignment rather than supply. “We currently have a match in terms of talent volume, but a mismatch in terms of skills,” he said. “What is needed is a rising set of skills for which the traditional talent providers teaching skillsets are out of date.”

Event: SHRM 2026

From Credentials to Competency

At the heart of the disconnect is the continued reliance on degrees and resumes as primary signals of readiness, tools that Pulsipher described as insufficient for today’s labor market.

“A skill is simply the knowledge, the capability, the capacity to perform the tasks and activities of the function or the role that we have,” he said. “We all know the phrase that talent is universal, but opportunity is not. I want to refine that: talent is universal, and opportunity is abundant, so developing human talent fails not because opportunity is not abundant but because our systems, practices, processes, are broken.”

Those systems, he argued, rely on “blunt instruments like a degree or a resume,” along with hiring practices that “introduce subjectivity and bias” and reinforce familiarity over capability.

This critique aligns with shifting employer expectations. According to WGU research cited by Pulsipher, degrees still carry value, but alternative credentials and demonstrated experience are increasingly stronger indicators of job readiness.

“It’s not sufficient to just have an academic credential,” he said. “Many employers are indexing higher on work experience or a credential plus applied experience.”

Taylor emphasized that this shift is not about abandoning higher education altogether.

“We’re not anti-degree,” he said. “That’s really important to say. We have to be careful about that. Degrees still matter.”

Pulsipher agreed, but he suggested that the role of degrees is evolving. “Industry or job relevant credentials matter, not just a degree,” he said. “A degree is a very blunt instrument. Credentials provided through work experience are a valuable proxy.”

Designing a Skills-Based Talent System

Moving toward a skills-based model requires more than just changing hiring criteria. It demands a fundamental redesign of how organizations define, assess, and develop talent.

“So how do we get to a skills-architected talent economy?” Pulsipher asked. “Employers have to define their skill needs. One of the biggest gaps today is that employers have not atomized the required skills people need to possess for specific roles.”

This “atomization” involves breaking roles down into discrete, measurable skills. From there, education providers can validate competency, and employers can assess candidates more objectively.

Artificial intelligence is emerging as a key enabler in this process. Pulsipher described how AI can analyze job tasks and activities to create detailed skill taxonomies.

“AI is really good at distilling skills from the tasks and activities that exist in a role,” he said. “It takes on all that unstructured data and develops a knowledge graph. That graph identifies the core skills that are needed, separate from the ancillary skills seen in job profiles.”

Once those core skills are identified, organizations can build assessments, align learning pathways, and personalize development at scale.

Specialty Credential: Talent Acquisition

Integrating Learning and Work

Another critical shift involves collapsing the traditional divide between education and employment. Rather than treating them as sequential phases, Pulsipher advocated for a more integrated model.

WGU’s approach includes embedding work-based learning directly into academic programs, such as through project-based coursework, internships, and apprenticeships. In some cases, students earn significant academic credit through hands-on experience.

“We find that you can use AI to simulate work experience while still a student,” Pulsipher said. “It’s not sufficient to study a digital textbook and take tests. You need to start applying what you learned in relevant work-based ways.”

This model also recognizes learning that occurs on the job, an area historically overlooked in formal credentialing systems.

“Through work, you can obtain the same competency for specific skills that you might have attained previously through academic means,” he said. “To this point, work is not credentialed. People who have been on a job for 10 years do not hold a credential saying ‘I am competent in these things.’”

The Rise of Learning and Employment Records

To support a skills-based ecosystem, infrastructure is critical. Pulsipher pointed to learning and employment records as a foundational element.

“Talent systems don’t have digital documents, a record of core skills and abilities that individuals possess with defined proficiencies,” he said. “That’s where learning and employment records come in. How do we make those visible and portable?”

WGU has developed its own solution in the form of a digital “achievement wallet,” designed to document verified skills and guide career navigation. These tools not only help workers understand their own capabilities and gaps but also provide employers with clearer, more reliable signals.

“It’s not enough to say ‘I went through this training program,’ ” Pulsipher said. “You actually have to show the skills you are verified to be competent in.”

Ultimately, Pulsipher said he envisions a future in which education and employment are deeply interconnected, and where learning is continuous rather than front-loaded. That vision is already taking shape through partnerships between education providers and employers, including WGU’s collaboration with SHRM.

For HR leaders, one of the most compelling aspects of skills-based hiring is its potential to expand access to opportunity.

“In this era of rethinking our diversity work, by practicing skills-based hiring, you are opening the apertures for talent,” Taylor said. “Recruiting is fundamentally exclusionary, but skills-based hiring will allow us to be more inclusive. That’s a real goal for us.”