Skill-First Hiring: Redefining the Hiring Landscape

In 2025, SHRM and the SHRM Foundation, supported by Walmart, published The Skills-First Movement: Redefining How Organizations Hire and Grow. Surveying 1,184 HR professionals, 1,259 supervisors, and 1,513 U.S. workers, the study builds on a 2021 benchmark study to track how skills-first practices have evolved across the talent life cycle. The report showcases how 70% of HR professionals said that skills-first practices will play a larger role in hiring decisions in their organizations over the next three years. As a result, it is essential for organizations to be able to anticipate which skills, as well as which skills validation methods, will be most needed and accepted for building a future-ready workforce. This insight clubbed with the explosion of skilled credentials available online, has created a new mystery box for HR professionals to deal with across the world.

What Are Skilled Credentials?

Skilled credentials: micro-credentials, industry certifications, apprenticeship badges, and digital qualifications; validate competencies without requiring a traditional degree. The explosion of MOOCs and online learning platforms such as Coursera and LinkedIn Learning has made these credentials widely accessible, enabling workers to upskill on their own terms. As job roles evolve faster than degree programs can adapt, employers are increasingly looking beyond transcripts to find talent.

Top 5 Hiring Shifts: 2021 to 2025

The report threw up interesting insights into the shift of how work, workers and workplaces are impacted by skilled credentials.

• Skills now led hiring: Relevant experience and demonstrated competencies have overtaken educational background as the top hiring criteria for both HR professionals and supervisors

• Broader adoption: Use of skilled credentials in hiring rose from 72% (2021) to 78% (2025); 34% of organisations now often or always apply skills-first strategies

• AI is reshaping demand: Over 80% of respondents agree AI will change which skills are valued, with 80% of HR professionals expecting AI-competency hiring to be prioritised within three years

• Credential uptake is rising: Workers holding at least one skilled credential grew from 45% in 2021 to 70% in 2025, with 87% of HR professionals now regularly encountering credentialed applicants

• Business results follow: Organisations using skills-first hiring are more likely to exceed financial objectives (35% vs. 27%) and report positive company culture (86% vs. 78%)

Benefits to Organisations

Adopting a skills-first approach offers organisations a strategic edge across multiple dimensions. 

• Skills-first hiring widens the talent pool and attracts more qualified applicants (as stated by 67% of HR professionals and 76% of supervisors)

• Delivers outcomes comparable to degree-based screening in identifying successful hires (62% vs. 67% for HR professionals; 84% vs. 86% for supervisors)

• Organisations that embed upskilling into their culture see significantly higher employee engagement (59% vs. 31%) and commitment (61% vs. 47%)

• Organisations using project-based assessments reported notably lower turnover rates (46% vs. 34%)

Challenges in Validating Skills

With over 1.85 million unique credentials in the U.S. as of 2025, quality assessment is a growing challenge: 24% of HR professionals and 33% of supervisors say it is too difficult to evaluate credential quality. Implementation barriers include reliance on traditional degree-based methods (29%), lack of assessment tools (29%), and pressure to hire quickly (23%). For candidates, cost (34%) and time constraints (20%) remain the leading barriers to obtaining credentials.

Top 3 Skill Groupings in Hiring

With organisations increasingly recognising that competencies can be built through work experience, volunteering and personal learning, it is important to be aware of the kind of skillsets they are looking for and evaluating through the non-degree pathways. 

• Power Skills: Critical thinking (82%), active listening (80%), and coordination (72%) are the most accepted interpersonal skills through nondegree pathways and increasingly prized as AI handles routine tasks

• Problem-Solving & Resource Management: Time management (87%) and complex problem-solving (74%) top this group, with employers recognising real-world experience as a valid validator 

• Technical & Systems Skills: Troubleshooting (76%) and judgment and decision-making (84%) lead these categories, with growing openness to certifications and apprenticeships as proof of competency

Conclusion 

Skills-first hiring has moved from emerging trend to strategic imperative. The SHRM 2025 data confirms that organisations embracing this approach attract broader talent, improve financial performance, and build stronger cultures. With online learning making skill development more accessible than ever, the opportunity is clear: the challenge is building the frameworks to evaluate that talent consistently and fairly.

You can view the full report as a member here.