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Skills or credentials—which is more important for landing a job in today’s economy? And which do hiring managers prioritize?
According to a new U.S. Chamber of Commerce Foundation study, the answer, increasingly, is skills. The challenge is finding workers who have them.
Our study provides a detailed look at an American workplace in flux. Traditionally, pursuing formal education has been the surest path to employment. But times are changing, with companies preparing for a world where competencies—not degrees—are the most important factors when filling a job.
The Chamber Foundation’s research finds that competencies—defined as knowledge and skills that can be observed, measured, or otherwise assessed—take precedence over academic credentials in the modern economy. In a survey of 500 HR leaders at businesses across the country, 74% of respondents report that their companies require the submission of a credential in their hiring practices. But only 26% claim that the credential is used in assessing the candidate’s viability. As demand for competencies grows in the 21st century workplace, 78% of hiring managers agree that they will need to reassess the way they hire, and 45% report that changing hiring practices is a priority in their organizations.
Yet changing hiring practices to prioritize skills is only half the battle; the other half is ensuring that workers have the skills employers are looking for in the first place. American businesses face a difficult dilemma: The demand for skilled workers is greater than ever, but availability is in short supply. Our study finds that 74% of hiring managers agree that there is a skills gap in the current labor market, with 48% saying that candidates lack the skills needed to fill open jobs.
We know that a talent shortage exists—the question is, How do we address it? We propose three potential solutions: (1) increase upskilling initiatives for current employees; (2) work with educational programs to strengthen talent pipelines; and (3) improve alignment between educational program curricula and the skills needed in the workforce. To aid in this effort, the Chamber Foundation created Talent Pipeline Management (TPM), which connects classroom to career by coordinating shared responsibilities between education providers and employers. Now active in 33 states, D.C., and Canada, TPM helps students gain both the credentials and skills they need to succeed in today’s workforce.
The workforce of today must be prepared for the economy of tomorrow. To that end, the Chamber will continue working to close the skills gap by strengthening partnerships with employers and education providers alike.