As more employers focus on skills-based hiring over traditional educational degrees, now less than a third of U.S. job postings include requirements for years of experience, down from 40% in April 2022, according to a May 23 report from Indeed’s Hiring Lab.
The shift has occurred across sectors but most prominently in sectors that pay well and that typically require more education.
“Employers often include experience requirements in job postings to screen for strong candidates, lower training costs, and reduce the risk of hiring unqualified workers,” Cory Stahle, an economist at the Indeed Hiring Lab, wrote in the report.
“However, Indeed job posting data shows that mentions of experience requirements in job ads have declined in recent years, likely due to a shift in who employers want to hire and growing support for skills-first hiring,” Stahle wrote. “Less focus on tenure, in addition to a long-term decline in educational requirements, may give job seekers with the right skills a chance to pursue opportunities that may have previously been closed to them.”
With the broad decline in requirements, employers aren’t just reducing the number of years of experience but removing them entirely, according to the report. Since April 2023, the share of postings that didn’t include any requirements or explicitly asked for applicants with no experience rose from 60% to 70%. Although some postings may still ask for some type of experience, such as “nursing experience preferred,” fewer require a certain amount.
Though many factors account for the shift, several trends stood out, Stahle wrote. For instance, employers appear to be responding to the tough labor market and adapting skills-first hiring practices. Companies may want to attract new workers with fewer requirements, as well as hire talent with less experience and education to help control costs, he added.
On top of that, experience requirements have fallen more dramatically in high-wage jobs. Since April 2022, experience mentions have fallen by more than 20 percentage points for high-wage sectors, as compared with 10 points or less in low-wage and medium-wage sectors.
“One of the main drawbacks of using years’ experience as a proxy for job proficiency is that even if a candidate fulfills the year requirement, the quality of that experience is not clear,” Stahle wrote. “A worker who uses a skill or technology daily will likely have greater proficiency than one who uses the same tool once a month, even if they have the same number of years under their belt.”
Fewer job posts contain formal educational requirements as well, according to another Indeed report. In January 2024, about half of U.S. job postings didn’t include educational requirements, up from 48% in 2019. Only about 18% required a four-year degree or higher, dropping from 20%.
As these shifts continue while companies adopt skills-based hiring, HR leaders can play a vital role in helping companies make a realistic transition, according to a report from McLean & Co. To start, HR pros must help companies bridge the gap from their current hiring model by becoming “skills aware.”
Although many companies have announced ambitions to launch skills-based hiring, most haven’t yet made real changes to drop degree requirements or actually hire workers without degrees, according to a report from The Burning Glass Institute and Harvard Business School. In addition, about 45% have made a change in name only and haven’t changed hiring practices, even if they removed degree requirements from job postings.
At the same time, hiring has been pushed to the back burner for many companies due to budget concerns, according to data from HR Dive’s Identity of HR 2024 survey. In response, HR pros say they’re now more focused on “maximizing value within budgetary constraints” and meeting higher expectations for their spending choices — which could play into fewer experience demands, as well.
