Skills Based Hiring and How Recruitment Is Changing in 2026

For decades, a university degree served as one of the quickest ways for an employer to screen a candidate. It was imperfect, but it offered a familiar signal: this person had completed a defined course of study and met a certain academic standard.

That signal is becoming less decisive.

In 2026, employers are increasingly looking at what candidates can demonstrate, not simply where they studied. Skills-based hiring has moved well beyond the experimental stage. According to the National Association of Colleges and Employers (NACE) Job Outlook 2026 survey, about 70% of employers now use some form of it, up from 65% a year earlier, and 71% apply it at least half the time. More than half have removed degree requirements from at least some positions.

Technology is helping accelerate that change. Employers can now evaluate work samples, technical assessments, portfolios and practical exercises at a scale that was difficult to manage through traditional recruitment processes.

A related idea is also beginning to attract attention: the skills passport.

Rather than treating a résumé or degree certificate as the complete record of someone’s professional ability, a skills passport brings together evidence from across a career. That might include certifications, completed projects, technical assessments, open-source contributions and endorsements tied to specific capabilities.

For CTOs and engineering leaders, this matters for more than recruitment. It could change how companies identify talent, build teams and decide who is ready for the next role.

What are skills based hiring?

Skills-based hiring is straightforward in principle: employers assess candidates according to the capabilities required for a job rather than using educational background or years of experience as the primary filter. The difference becomes clearer in practice.

A conventional job description might ask for a bachelor’s degree, five years of experience and familiarity with a particular technology. A skills-first version is more likely to describe the outcomes expected from the person taking the job. A software engineering candidate, for example, might be assessed on whether they can design an API, troubleshoot a production issue, work with a database and explain the trade-offs behind their decisions.

That approach is often referred to as competency-based hiring or competency-based recruitment. The terminology varies, but the principle is the same: demonstrated ability carries more weight.

The change is particularly relevant in technology. Tools and technical practices evolve quickly, and a qualification earned several years ago does not necessarily tell an employer what someone can do today. A degree can still provide useful context. It simply becomes one piece of evidence rather than the entire case for hiring someone.

The rise of the skills passport

A skills passport can be thought of as a more detailed and continuously updated record of professional capability.

Instead of presenting a candidate through a two-page résumé, it can bring together different forms of evidence, including:

• Industry and vendor certifications
• Microcredentials and specialist courses
• Project portfolios
• Coding and technical assessments
• Work simulations
• Open-source contributions
• Peer or manager assessments
• Evidence of completed projects and measurable outcomes

The important distinction is verification. A list of skills on a résumé tells an employer what a candidate says they can do. A portfolio, assessment or completed project provides evidence.

For a technical candidate, that evidence could include a production application, contributions to an open-source repository, a data pipeline, cloud architecture work or a technical assessment covering Python, SQL or system design. None of these proves that a candidate will succeed in every environment. But together, they can give a hiring manager a much richer picture than a university name alone.

A digital skills passport also has value after someone is hired. If the information is maintained over time, it can become a record of how an employee’s capabilities have developed rather than a document that is created once and forgotten.

How is technology changing recruitment and skills based hiring?

The growth of skills-first recruitment would be difficult to manage at scale without better technology. Recruiters dealing with thousands of applications need ways to find relevant candidates, compare evidence and administer assessments without turning the process into a manual exercise. Several changes are already visible.

Better candidate matching

Older recruitment systems were heavily dependent on keywords. Someone who had written “cloud architecture” on a résumé could be surfaced for a role requiring cloud architecture, while a candidate who described the same experience differently might disappear from the search. Newer systems can interpret relationships between skills, roles and experience. That makes it easier to identify candidates whose career history does not follow a conventional path.

That can be useful for technical hiring, where a capable engineer may have moved between infrastructure, software development, data and security rather than following a neat career ladder. But better matching does not eliminate bias. It can simply move bias into the technology itself. Employers still need to understand what information a system is using and whether its recommendations are producing a genuinely broader pool of candidates.

Practical assessments become easier to run

Technical assessments are not new. What has changed is the ability to administer and evaluate them across large candidate pools. A company might ask an engineer to diagnose a software problem, ask a data candidate to work through a dataset or give an operations candidate a realistic scenario to resolve.

The strongest assessments resemble the actual job. That distinction matters. A difficult puzzle may demonstrate that someone is good at solving puzzles. It does not necessarily show that they can work effectively in a production environment. For employers, the challenge is therefore not simply introducing more assessments. It is designing assessments that measure the capabilities the job genuinely requires.

The same model can be used inside the company

The skills passport becomes more useful when it is not limited to external recruitment. An organization that maintains a current view of its employees’ capabilities can identify people who are ready for new assignments, need targeted training or could move into emerging technical roles.

That changes the conversation around internal mobility. Instead of asking who has held a particular title for the longest, leaders can look at the capabilities available across the organization and determine where they can be used most effectively. For large engineering organizations, that could make skills data useful for project staffing, succession planning and workforce development.

Skills based hiring trends in 2026

The shift toward skills-based hiring is real, but the transition is far from complete. Research points in the same direction: more employers are saying they value demonstrated skills, and fewer are treating academic credentials as an automatic requirement. NACE’s Job Outlook 2026 survey found that 70% of employers now use skills-based hiring, up from 65% a year earlier, while TestGorilla’s State of Skills-Based Hiring 2025 report puts adoption even higher, at 85% of employers

LinkedIn’s flagship annual list across 12 global markets shows people skills dominating, Cross-Functional Collaboration, Team Management, Mentorship, and Executive & Stakeholder Communication are among the fastest-growing skills, signaling a shift from static credentials to fluid, adaptable capabilities. PwC’s 2026 AI Jobs Barometer, analyzing 2.4 million entry-level roles, found that AI-exposed entry-level jobs are now seven times more likely to require senior-level human skills such as judgment, creativity and leadership.

Yet there is an important contradiction.

Some employers say they have adopted skills-based hiring while continuing to make decisions in ways that favor conventional educational backgrounds. TestGorilla’s State of Skills-Based Hiring 2025 survey found that 85% of employers reported using skills-based hiring. But joint research from Harvard Business School and the Burning Glass Institute found that only about 0.14% of actual hires went to people without college degree, roughly 97,000 of 77 million annual US hires, fewer than 1 in 700. Only 37% of companies that dropped degree requirements actually increased their hiring of non-degree candidates.

That gap is worth paying attention to.

NACE’s 2026 Spring Update reinforces the point. Employers project a 5.6% increase in hiring for the Class of 2026, and they rate communication and teamwork as the most important competencies (4.5 out of 5) and critical thinking at 4.4, yet fewer than 56% of graduates are seen as proficient in communication, and only 41.8% of employers say graduate skills are closely aligned with their needs. Tellingly, 59% of employers want to see skills demonstrated with concrete examples on a résumé rather than merely listed.

Changing the language in a job advertisement is easy. Changing the habits of recruiters and hiring managers is much harder.

A company can remove “bachelor’s degree required” from a job description and still favor candidates from familiar universities, well-known companies or conventional career paths. For skills-based hiring to work, the assessment process has to change along with the job description.

What Google, IBM and Apple reveal about the shift

Large technology companies offer useful examples of how the move away from degree-first recruitment can work in practice. The approaches differ, but they share an emphasis on evidence.

Google: skills and alternative credentials

Google has been among the most visible companies in moving away from blanket degree requirements, and its own cofounder has said so publicly.

Sergey Brin, who studied graduate computer science at Stanford, told Stanford engineering students in December 2025 that Google now hires many people without degrees. “In as much as we’ve hired a lot of academic stars, we’ve hired tons of people who don’t have bachelor’s degrees,” he said. “They just figure things out on their own in some weird corner”.

“I don’t think necessarily because you go to an Ivy League school or have great grades it means you’re going to be a great worker or great person,” JPMorgan Chase CEO Jamie Dimon said in 2024. “If you look at skills of people, it is amazing how skilled people are in something, but it didn’t show up in their resume.”.

The broader lesson is more important than the numbers. Candidates can demonstrate capability through assessments, projects and relevant credentials rather than relying exclusively on a four-year degree to get through the first screening stage. That creates a different entry point into the technology industry, particularly for people who developed their skills outside traditional computer science programs.

IBM: defining the skills before measuring them

IBM’s approach illustrates another important part of the transition, and it is the company that gave the movement its most recognizable term. In 2016, under then-CEO Ginni Rometty, IBM coined the phrase “new collar jobs” to describe technical roles that require specific skills rather than a four-year degree. Rometty has been one of the most vocal advocates of skills-first hiring, and she framed it as a philosophy rather than a program: “Skills first is a talent strategy, it’s not a program. It means your real philosophy is building people, not just buying them”.

IBM’s New Collar talent leader Kelli Jordan put it plainly: “Sixty-two percent of people in the U.S. over the age of 25 do not have a bachelor’s degree. That means most of us know someone who doesn’t have a bachelor’s degree. And so being able to also tell a story about an apprentice who started working at our coffee shop straight out of high school, met a mentor, learned how to code, took some classes at a community college, came through our apprenticeship program, graduated, and is now a software engineer at IBM. That makes it real to people”.

Kelli further said. “Skills have to be a golden thread. Skills today are expiring at a rate that we’ve never seen. Something you know today is not going to be valuable five years from now in many cases, and with technology that’s even more amplified. We’ve built tools that help IBMers understand the skills they have,” Kelli notes, “and how those skills can be built through our learning platforms so that you can see the skills you need for a role, and you can click into our platform to build a particular skill”.

The broader lesson is that skills-first recruitment requires an underlying framework: which skills matter, what proficiency looks like and how that proficiency will be evaluated. IBM’s experience shows that if a company cannot clearly define what good performance looks like, hiring managers will inevitably fall back on familiar signals such as degrees, previous employers or years of experience.

Apple: the value of proof of work

Apple represents another side of the equation.

“We hire a lot of people that don’t code on a daily basis that do other things. We’re looking for people that can see around the corner. Can [the candidate] really collaborate? Do they deeply believe that one plus one equals three?” he continued, referring to a team-building idea that the results of individuals are larger than the sum of their parts. Ultimately, we want to create products that people can’t live without, but that they didn’t know they needed. All of these traits go into making a great team player.”- Then CEO Tim Cook said in one of his interviews.

What Cook says he actually screens for are traits that a résumé cannot easily capture: collaboration, curiosity, creativity and a willingness to challenge ideas. For technical and creative roles, tangible work provides the evidence that matches that emphasis. A shipped application, design system, performance improvement or complex project can reveal how someone approaches problems in a way a résumé cannot. A candidate who can explain why they made a particular architectural decision, what went wrong during implementation and how they improved the final product is giving an employer something much more useful than a list of technologies.

Together, Google, IBM and Apple point toward three different components of a skills-first model: credentials can provide evidence, structured assessments can test capability, and real work can demonstrate how someone operates.

What this means for CTOs

For technology leaders, the implications extend well beyond the recruiting function.

A practical guide to skills-based hiring

Companies do not need to rebuild their entire recruitment operation overnight. A more practical approach is to start with a small number of roles where performance can be assessed clearly.

1. Rewrite the job description

Remove degree requirements where they are not genuinely necessary. Then identify the five to eight capabilities that are most important to success in the role. Be specific. “Strong communication skills” is difficult to evaluate. “Can explain a technical incident to a nontechnical stakeholder” is much easier to test.

2. Build realistic assessments

Give candidates tasks that resemble the work they would actually perform. For an engineer, that might mean debugging code or reviewing an architectural decision. Morever, For a data professional, it could involve analyzing a dataset. For a product manager, it could mean prioritizing a roadmap under realistic constraints. The assessment should reveal how someone thinks, not simply whether they can produce a predetermined answer.

3. Create the skills record

Decide what constitutes evidence. Certifications may matter for some roles. For others, a portfolio, assessment or completed project may carry more weight. The goal is to create a consistent framework rather than collecting every credential a candidate has ever earned.

4. Train hiring managers

This is one of the most important steps. Recruiters and hiring managers need to understand how to interpret evidence and compare candidates consistently. Otherwise, the organization can spend money building a sophisticated assessment process only to have decisions revert to familiar credentials at the final stage.

5. Measure outcomes

The real test comes after hiring. Compare time-to-hire, performance, retention and progression among people hired through different pathways. If skills-based hiring is producing stronger outcomes, the evidence will make the case for expanding it. If an assessment does not predict performance, change the assessment.

The degree is not disappearing- its role is changing

The debate around skills-based hiring is sometimes framed as a choice between degrees and skills. That is too simplistic. A degree can still be valuable. Certain professions require formal education and licensing. University can provide theoretical foundations, research experience and a network that is difficult to replicate elsewhere. The change is that a degree is becoming less useful as a universal shortcut for judging capability. For CTOs, that distinction matters.

In brief

The strongest hiring systems of the future are unlikely to ask candidates to choose between formal education and practical experience. They will consider both, while putting greater weight on evidence that is relevant to the job. That is ultimately what makes the skills passport more interesting than another recruitment trend.

It offers a way to keep track of what a person has learned, built and demonstrated throughout a career. As technology continues to change, that record can evolve with them. The organizations that benefit most will not necessarily be those that abandon degrees first. They will be the ones that become much better at answering a simpler question: Can this person do the work, and can we fairly demonstrate why?