May 19, 2022 - Economy

White House prods agencies to focus on skills in hiring

Illustration of the white house on the back of a dollar with a now hiring sign hanging from it

Illustration: Sarah Grillo/Axios

The Biden administration on Thursday urged federal agencies to rely on job-seekers' skills — rather than their academic degrees — to fill vacancies, according to new guidance shared exclusively with Axios.

Why it matters: The government is catching up with the private sector's shift to skills-based hiring amid a tight labor market — and, in doing so, opening up jobs to a pool of traditionally overlooked candidates.

Driving the news: The Office of Personnel Management released new guidance to agencies to help them implement a skills-based approach to filling jobs.

  • Skills-based hiring focuses on what jobs candidates can do, relying more on competency-based assessments than educational degrees.
  • It is also more inclusive because it makes it easier for people without degrees to show they have the talents necessary to do the work.

By the numbers: According to a March report by LinkedIn, 40% of employers use skills data when hiring through the platform, up 20% compared with a year prior.

  • Companies that use skills data are 60% more likely to find "a successful hire" than those who do not, the report said.

Of note: A study published in the Harvard Business Review called out Accenture and IBM as examples of IT companies that had whittled back the number of job postings with degree requirements.

  • "The reset that’s taking place in hiring today is vitally important," said the authors, led by professor Joseph Fuller of Harvard Business School.
  • "If we want to increase equity in the labor market, one important way to do it is by removing barriers to well-paying jobs — and there’s no question that in recent years one of those barriers has been inflated degree requirements."

The intrigue: The guidance from OPM builds on a 2020 executive order from the Trump administration that told agencies to prioritize skills over college degrees in hiring.

  • Several agencies, including NASA, the Department of Interior and the U.S. Digital Service, already use skills-based hiring.
  • The Biden administration has extended the deadline of the executive order to the end of this year for agencies to adopt some skills-based hiring practices.

What they're saying: "Given today’s booming labor market, the federal government must position itself to compete with other sectors for top talent," Kiran Ahuja, director of OPM, said in a statement.

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