Competence vs. Credentials: How the New Focus on Skills will Drive Productivity in 2025
As we move closer to 2025, many companies are rethinking how they view talent. While credentials like degrees and certifications still have value, they don’t always show the full picture. What truly matters is competence—the ability to use skills in real-world situations to get the job done.
This shift toward skills-based hiring is gaining momentum. Major companies like Boeing, Walmart, and IBM are already making changes by joining programs like the Rework America Alliance and Business Roundtable’s Multiple Pathways initiative. These efforts aim to remove unnecessary degree requirements and help workers advance from lower-wage to higher-paying jobs. Even states like Maryland have taken action by eliminating degree requirements for many of their public sector jobs, opening up opportunities in fields like healthcare and engineering.
But why are so many organizations shifting to a focus on competence over credentials? The answer is simple: focusing on skills helps solve many of the challenges businesses face today. Let’s dive into why this change is happening and how it can boost productivity.
What’s the Difference?
Before we explore the benefits, it’s important to understand the difference between credentials and competence:
- Credentials: These are formal qualifications, like degrees or certifications, that look impressive on a resume but don’t always show practical skills.
- Competence: This is about what someone can actually do. It reflects their skills, experience, and ability to handle real-world challenges.
While credentials can be helpful, they don’t always give a clear picture of a person’s abilities. In contrast, competence shows how well someone can perform on the job.
Why Competence is Important Right Now
Adapting to Change
The world of business is constantly changing, and companies need employees who can adapt quickly. Focusing on competence ensures you’re hiring people who can navigate these changes and solve problems effectively. The pandemic taught us that the ability to adapt is more important than ever. Skills-based hiring allows companies to find workers who can rise to the challenge, even if they don’t have a traditional educational background.
Expanding the Talent Pool
When you focus on skills over degrees, you open the door to a much wider range of talent. There are countless candidates out there with hands-on experience that might not show up on a traditional resume. By removing degree requirements, companies can tap into this hidden talent pool and find employees who may have been overlooked. Large companies and smaller businesses alike are seeing more applicants after adjusting job descriptions to focus on skills.
Boosting Employee Morale
Recognizing the value of skills doesn’t just help with hiring—it also boosts morale. When employees feel that their abilities are recognized and appreciated, they’re more motivated to perform well. This creates a positive work environment where people feel valued for what they can do, not just for their background. And when employees feel valued, they’re more likely to stay with the company.
Improving Productivity
Hiring based on competence means you’re bringing in people who are ready to hit the ground running. This reduces the time and resources needed to get new hires up to speed. With the right skills already in place, employees can contribute to projects faster and more effectively.
How to Shift Your Focus Toward Skills
Revamp Your Hiring Process
To prioritize competence, start by changing the way you hire. Instead of focusing solely on degrees and certifications, consider adding skills assessments or practical challenges to your interview process. This will give you a clearer idea of what candidates can actually do. Many companies are already doing this with great success.
In fact, A recent SHRM research report suggests, 79 percent of employers say skills assessments are just as or more important than other hiring criteria, and 36 percent say a job candidate who scores high on an assessment but doesn’t meet the minimum years of experience is very likely to make it onto the list of final candidates.
By rewriting job postings to focus on skills, businesses are seeing a significant increase in qualified applicants.
Support Ongoing Learning
Once you’ve hired the right people, help them continue growing. Invest in training programs, workshops, and other learning opportunities that allow employees to sharpen their skills. This shows your commitment to their development and leads to a more capable, adaptable workforce.
Create Pathways for Internal Growth
Skills-based practices aren’t just for hiring—they’re also key to retaining talent. Many workers leave their jobs because they don’t see opportunities to grow within the company. By offering clear pathways for internal advancement based on skills, you can keep your best employees. For example, some companies have created training programs in partnership with local schools to develop the skills they need internally. This kind of program helps employees advance and keeps companies competitive.
Foster a Culture of Learning
Creating a workplace where continuous learning is encouraged benefits everyone. Organize informal learning sessions, offer access to online courses, and provide opportunities for employees to train in different areas. This not only helps employees develop new skills but also fosters a culture of growth and improvement within the organization.
Read on to learn more about upskilling and reskilling, here.
The Road Ahead: Focusing on Skills
As we look toward 2025, businesses that prioritize competence alongside credentials will have a competitive edge. By embracing skills and adaptability, you can build a more effective and diverse team. This approach not only benefits your organization but also creates a positive workplace where employees feel empowered to thrive.
Learn More About Culture Works
At Culture Works, we want to partner with your company to create success for your team– whatever that looks like for your specific company. Our passionate HR team has the experience you need in culture ops and hospitality to create success. Our approach is centered upon the importance of humanizing, customizing, and simplifying. We believe in what we do, and we want to help your company operationalize culture, talent, and HR to create ongoing success.
Read on to learn more about what we do.
