Skills Based Hiring: Why Degrees Are Out and Competencies Are In

 

(Written by Tavis Shearer, Managing Director at TRS Resourcing)

There’s one impossible hiring strategy to ignore going into 2025, it’s this: skills now matter more than degrees. Every conversation I’m having with employers comes back to the same point: “Can the candidate do the work?” Not where they studied, not what they majored in, not how many certificates they can list. Just: can they step into the job and deliver results? I’ve been in this game long enough to see hiring trends swing back and forth. Employers are finally realising that capability trumps credentials.

Why Skills Now Outweigh Degrees in Hiring

Dealing with a labour market that’s tight, and heavily impacted by technology. The shortages in trades roles that we’re seeing, aren’t really improving. If anything, the pressure on businesses is more so. Are you still filtering candidates by outdated degree requirements? If you answered yes, you’re ruling out people who could be the high performers from day one.

On top of that guys, AI has changed the hiring game. AI doesn’t get impressed by a degree it looks for competency. It matches skills. If your job ads aren’t written with clear skills and abilities, you’ll miss out on candidates AND you won’t even show up in their search results.

Candidates themselves search differently now, they’re not typing “warehouse job” anymore; they’re searching “LF forklift job,” “SAP inventory controller,” “diesel mechanic roles Melbourne,” “fabrication welding work.” Skills have become the new keywords. You need to hire with that in mind. Don’t be invisible in 2026.

The Three Competencies Employers Should Prioritise

Let me break it down simply: recruitment is about hiring the person who can prove they can do the work, it’s not the person with the most impressive resume. Focus on three core areas:

• Technical competency
• Digital competency
• Soft competency

Technical competency is the obvious one the ability to weld to a certain standard, read drawings, rebuild components, operate machinery, manage freight bookings, run a production floor, or coordinate logistics.

These are the practical skills that determine how well a person will perform from day one. Digital competency is becoming just as important, almost every industry we recruit for is moving into tech enabled tasks. Someone with hands on system experience will outpace someone with a degree but no practical experience. And then we get to soft competencies, the things you can’t teach in a classroom.

• Reliability
• Initiative
• Attitude
• Adaptability
• Communication
• Accountability

I can train someone on a system in two weeks. I cannot train work ethic.

Now, let’s be fair. Some roles still require formal qualifications. Engineers, licensed trades, accountants no argument there. But in my experience, the degree isn’t the judge of performance. Real world ability is. I’ve interviewed boilermakers without a formal trade paper who outperform ticketed tradespeople. I’ve seen warehouse supervisors with zero tertiary education run operations smoother than MBA graduates. I’ve seen freight forwarders with no diploma outperform logistics graduates simply because they understand the work inside out. Employers are waking up to this reality. A degree is nice to have but capability is what gets results.

How Businesses Can Implement a Skills-Based Hiring Strategy

Skills based hiring works because it gives businesses bigger talent pools and faster placement times, which lead to better retention and higher productivity. Strip back unnecessary degree requirements widens your pool and gives you access people who want to work, know the job, and have hands on experience. These candidates settle in quicker and achieve sooner because they already understand the environment. And from a cost perspective, hiring someone who already has the core 70–80% of competencies you need reduces onboarding time. Businesses forget that incompetence is expensive. Hiring based on skills not degrees cuts that risk.

The practical side of implementing skills based hiring starts with rewriting your job descriptions. Most job ads are still packed with outdated requirements. Instead of focusing on degrees or random experience levels, list the tools, machinery, systems, and daily tasks that actually matter. Don’t just rely on a ChatGPT list. Define what success looks like at 30 days, 90 days, and six months. Those performance indicators will reveal the skills you should hire for. When I’m screening candidates at TRS, I ask practical, skills first questions: “Walk me through how you diagnose faults.” “What machinery have you operated?” “Explain your process when a job goes off track.” “What software or systems have you used?” These questions reveal capability quicker than any CV ever will.

A big challenge that businesses don’t realise they face right now is mindset. They still cling to degree requirements because they feel ‘safe.’ But the market has changed. Tech has changed. Candidates have changed. And hiring needs to change with it. The companies that will win in 2026 and moving forward, are the ones that hire people for their experiences, their proven skills, and their attitude, not their paperwork. If you focus on degrees, you’ll miss the people who can do the work.

At the end of the day, skills-based hiring forces a simple question: Can this person do the job? That’s it. That’s the real test. It demands more from candidates, more clarity from employers, and more accountability in the entire recruitment process. At TRS Resourcing, this is how we recruit. This is how we match candidates to roles. And this is how we help businesses build teams that are future-ready, productive, and reliable.

Skills will continue shaping recruitment in 2025, 2026, and beyond. Degrees won’t disappear, but they’ll never outweigh practical capability. If you need support building a skills-based hiring strategy that actually works, you know where to find me.

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