Why Skills‑Based Hiring Is Taking Over UK Recruitment in 2025
In 2025, the landscape of recruitment in the UK is undergoing a significant transformation. Employers across sectors are increasingly discarding traditional credentials—such as university degrees and lengthy CV histories—in favour of skills-based hiring. This shift isn’t simply a trend; it reflects a deeper structural evolution in how talent is assessed, accessed, and developed in response to rapid technological change, persistent skills shortages, and growing calls for greater inclusivity.
According to the Chartered Institute of Personnel and Development (CIPD), a striking 83 % of UK employers now prioritise skills-based hiring over formal qualifications. Similarly, LinkedIn reports that skills-based hiring expands the talent pool in AI roles by up to 8.2× globally and raises female representation by as much as 24 %. In fields such as AI and green technologies, demand for specific competencies is rising sharply while university requirements are steadily declining—degree requirements for AI roles in the UK have dropped by around 15 % between 2018 and 2024.
This blog explores the structural drivers behind this shift, the advantages for businesses and job-seekers, the challenges in adopting skills-based hiring, and how UK organisations can successfully implement this future-proof hiring strategy.
What’s Driving the Move to Skills-Based Hiring?
- Skills Gaps & Labour Market Needs
UK industries—particularly technology, green energy, digital healthcare, and manufacturing—are grappling with acute skills shortages. The traditional reliance on degrees no longer suffices to meet evolving needs. Skills-first hiring enables employers to tap into broader, more varied talent pools, including self-taught professionals, career-changers, and those with vocational or micro-credentials.
- Economic Pressures & Graduate Job Market
The graduate job market has tightened significantly; entry‑level roles have dropped, and employer focus has shifted toward proven capability rather than pedigree. This environment favours applicants who can demonstrate relevant skills, including digital and AI literacy, over those relying solely on academic credentials.
- Inclusivity & Social Mobility
Skills-based hiring supports social mobility and diversity. Prominent UK organisations—such as fashion retailer Kurt Geiger—have removed degree requirements, allowing them to hire for potential and broaden access. In financial services, employers like JPMorgan are dropping degree mandates in operations roles as part of a broader drive for socio-economic inclusion FN London.
- Rapid Change in Job Requirements
The pace of technological advancement means job roles evolve faster than formal education can keep up. Employers increasingly value learning agility, adaptability, and specific competencies—qualities better captured through skills-based assessments than by checking for a degree.
- Quantifiable Outcomes & Talent Pool Expansion
Research underlines how skills-based hiring broadens opportunity. In the UK, Gen Z benefits most, seeing a 12.7× increase in the talent pool under skills-based hiring, compared to 10.8× for Millennial. Globally, non-degree holders gain more ground under this model—6% greater increase compared to degree holders across industries.
Major Benefits of Skill-Based Hiring
- Larger, More Diverse Talent Pools
Skills-first hiring casts a wider net—opening up roles to those from non-traditional backgrounds, self-taught learners, returners, and vocationally trained candidates. This flexibility supports inclusion and helps fill critical talent gaps.
- Enhanced Predictive Validity
Skills-based assessments—through portfolios, simulations, or task-based exercises—often better predict job performance than degrees or tenure alone. Organisations using objective evaluations increase retention, engagement, and hire quality.
- Improved Social Mobility & Equity
Removing degree barriers helps drive socio-economic equity. By assessing what’s demonstrable rather than what’s granted via credentials, employers level the playing field and connect with untapped talent pools
- Faster Time-to-Hire & Cost Efficiency
Skills-based hiring streamlines recruitment. Clear competency-based job ads attract more relevant applicants, reducing screening time. Objective assessments replace expensive and lengthy degree validation processes, accelerating hiring cycles.
- Future-Proof Teams
Skills-first hiring builds teams with the agility and adaptability needed in volatile markets. Candidates selected for proven capabilities and learning ability are better equipped to evolve with emerging challenges—from AI integration to sustainability pivots.
Challenges and Pitfalls
- Assessment Design & Validity
Creating effective skills assessments requires expertise. Many organisations struggle designing fair, valid tools that reliably gauge both hard and soft skills. Over‑reliance on one type of test (e.g., coding) may skew outcomes HRO Today.
- Managerial Confidence & Cultural Shift
Talent leaders report that hiring managers often lack confidence or experience in conducting skills-based interviews. Transitioning from degree‑centric mindsets remains a top barrier—reported by 72% of organisations in surveys HRO Today.
- Technology and Infrastructure Gaps
Reliable skills-based hiring needs technology—assessment platforms, simulation tools, scoring systems—that many firms haven’t yet implemented or mastered HRO Today.
- Credentialing Ecosystem & Standardisation
With multiple assessment tools and micro‑credential formats available, ensuring consistency and recognition can be difficult. Without standard frameworks, employers may hesitate to fully abandon degrees arXiv.
- Balancing Potential with Proven Ability
While potential is valuable, hiring for skills over credentials can pose risks if assessments are poorly calibrated. Recruiters must ensure evaluation techniques reliably reflect future on-the-job performance.
UK Examples & Early Adopters
- Kurt Geiger
The fashion retailer removed degree requirements across roles, seeking potential first. This led to recruitment of apprentices like a 19‑year‑old design assistant whose creative contributions quickly fueled innovation.
- Financial Services & JPMorgan
JPMorgan has extended skills-based hiring into operations roles, part of a £40 million investment to enhance socio-economic diversity. These roles now focus on abilities rather than university credentials.
- Broader UK Trends
A CIPD study shows 83 % of employers prioritise skills over qualification. UK companies have seen a 30 % increase in use of skills assessments and a 25 % rise in skills‑focused job ads, with a 20 % boost in hiring satisfaction.
- Government & Skills England
In 2025, Skills England was launched to better coordinate skills training and regional needs—supporting the broader shift toward skills-based evaluation across industries.
Implementation Guide: How to Adopt Skills-Based Hiring
Step 1: Define Clear, Role-Specific Competencies
Map out what job success looks like. Identify both technical and soft skills, and define proficiency levels expected for each role.
Step 2: Design Objective Assessments
Use realistic tasks—coding challenges, situational judgement tests, portfolio reviews, or behavioural interviews—to evaluate candidates authentically.
Step 3: Train Hiring Managers
Support hiring teams to shift mindsets: offer training in competency-based interviewing and interpreting assessment results effectively.
Step 4: Monitor & Measure Outcomes
Track metrics like retention, performance, satisfaction, and diversity. Compare hires made via skills-based methods to traditional hires to build data-driven justification.
Step 5: Communicate Change
Update job descriptions to emphasise skills over credentials. Be transparent with candidates about the assessment process and opportunities for development.
Step 6: Build Continuous Learning Pathways
Support internal mobility by aligning hiring with upskilling programmes, apprenticeships, micro-credentials, and reskilling initiatives.
Conclusion
Skills‑based hiring is not just a buzzword—it’s a fundamental recalibration of how the UK builds talent pipelines in 2025. Faced with acute skill shortages, rapidly changing job requirements, and growing demands for inclusivity and social mobility, employers are embracing hiring processes that prioritize demonstrated competencies over traditional qualifications.
The benefits are clear: larger, more diverse talent pools; better predictors of job success; faster hire cycles; and teams prepared for future disruption. At the same time, challenges remain—particularly in designing fair assessments, shifting hiring culture, and investing in new tools and training.
However, UK employers—including Kurt Geiger, JPMorgan, and many others surveyed by CIPD—are already forging the path forward. The establishment of agencies like Skills England further cements the national infrastructure to support this shift.
For organisations seeking to stay competitive, inclusive, and agile, now is the time to move away from credentials-first thinking—and invest in hiring for capability, potential, and long-term impact. Skills-based hiring isn’t just the future of recruitment—it’s the necessary evolution of how talent meets opportunity in the modern world.