AI Is Accelerating Skills-Based Hiring: Employers are shifting focus from degrees to demonstrable skills in fields such as data science, machine learning and analytics. Major firms like Google and IBM have relaxed degree requirements, and a 2025 ResumeTemplates survey found 25% of U.S. hiring managers plan to drop bachelor’s degree requirements. Companies using AI-enabled skills matching — for example, Xplor Technologies with SmartRecruiters — report faster hires, roughly $3 million in agency savings, and better role fit, but experts stress the need for clean data, integrated HR systems and strong AI governance.
How AI Is Driving a Shift to Skills-Based Hiring — Faster, Cheaper, More Inclusive
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Artificial intelligence is accelerating a major hiring shift: employers are increasingly prioritizing demonstrable skills — especially in data science, machine learning and analytics — over formal degrees. Businesses say this approach helps them move faster, find candidates who are job-ready, and adapt to roles that evolve quicker than traditional education can keep up with.
Why AI Is Changing What Employers Look For
Demand for applied skills such as data science, machine learning and analytics is growing because these competencies are typically developed through hands-on work, not classroom study. "AI lets organizations expand their talent pipelines and keep pace with roles that evolve faster than traditional education can," says Lauren Winans, CEO of human-resources consultancy Next Level Benefits.
Anthony Donnarumma, CEO of 24 Seven24 Seven
Companies Leading the Way
Major employers including Google and IBM have removed degree requirements for some roles, and industry data supports the trend: a 2025 ResumeTemplates survey of 1,000 U.S. hiring managers found that 25% planned to stop requiring bachelor’s degrees and instead prioritize relevant experience.
Real-World Results
Organizations adopting AI-enabled, skills-first hiring report measurable benefits. Kara Ayers, senior vice president of global talent acquisition at Xplor Technologies, says the company began using the AI-powered applicant tracking system SmartRecruiters in 2022 to define and classify role-specific skills. Xplor reduced its use of recruiting agencies (saving about $3 million), shortened time-to-fill (often under 30 days, compared with more than 60 previously), and reports better alignment between new hires and role competencies.
Lisa Highfield, principal director of research and advisory services at McLean & Company.McLean & Company
"Hiring for skills shortens time-to-fill and raises productivity because candidates are more job-ready," says Anthony Donnarumma, CEO of recruiting agency 24 Seven.
Implementation Challenges and Governance
Experts caution that successful skills-based hiring depends on clean, well-structured frameworks: consistent job architecture, reliable performance data, and HR systems that integrate skills analytics into hiring workflows. Lisa Highfield of McLean & Company stresses the need for accurate data on existing and future skills, and Donnarumma notes the value of historical workforce data that shows how employees succeed at the company.
AI bias is a persistent concern. Organizations must build governance around AI-driven hiring tools, vet systems thoroughly, and ensure teams can manage AI use objectively and transparently.
Kara Ayers, senior vice president of global talent acquisition for Xplor Technologies.Xplor Technologies
What Employers Should Do Next
To adopt a skills-first approach effectively, companies should: define clear competencies for each role; invest in integrated HR systems and performance data; train hiring teams to evaluate skills and potential; and create governance policies to monitor AI fairness and accuracy. When done correctly, skills-based hiring can broaden access, improve job matches, and align talent strategies with the future of work.
Read the original reporting on Business Insider.
