Why Job Listing Qualifications Feel Absurd

Summary

The script addresses the challenges job seekers face due to increasingly demanding job requirements, focusing on skills over formal education. It highlights the shift towards skills-based hiring, with 46% of companies planning to hire more in 2024 due to skill gaps. The US labor market's cooling has intensified competition, leading employers to be more selective, prioritizing experience and skills over credentials. The script also discusses the implications for the economy and suggests that upskilling and adapting to new technologies are crucial for maintaining a competitive edge.

Takeaways

• 🔍 Job seekers often feel unqualified for positions that seem like a good fit due to required experience and skills.
• 📈 42% of employees felt excluded from job opportunities in 2023 due to a lack of qualifications or experience.
• 📊 Skills-based hiring is on the rise, with 79% of hiring managers valuing skills, experience, and accomplishments over credentials.
• 📉 The US labor market has cooled due to economic slowdown and interest rate hikes, leading to a more competitive job market.
• 📈 46% of companies plan to increase hiring in 2024 due to a lack of required skills among current employees.
• 💼 Companies are becoming more selective, with a focus on hiring for specialized skills and fewer new employees.
• 📚 There is a significant gap between the skills employees have and what employers are seeking, leading to a skills mismatch.
• 🏢 The decline in recruiters has led to inflated job requirements, as there is less expertise to challenge them.
• 💼 Companies are prioritizing quality of hire and specialized skills over traditional hiring methods like resumes.
• 📉 Entry-level jobs are becoming scarce, with only 2.5% of jobs posted on ZipRecruiter in April 2024 requiring no experience.
• 📈 The demand for skilled trades is high, but access to training and upskilling is limited, especially in the current economic climate.

Q & A

What percentage of employees felt excluded from job opportunities due to a lack of formal qualifications or experience in 2023?

In 2023, 42% of employees felt they were excluded from job opportunities because of a lack of formal qualifications or experience.

Why are companies shifting towards skills-based hiring?

Companies are shifting towards skills-based hiring because they are more concerned about the actual experience and skills of employees rather than their degrees, and it helps in reducing mis-hires and increasing employee retention.

What is the impact of the US labor market cooling on job postings and hiring rates?

The cooling of the US labor market has resulted in a slowdown in hiring rates, with a dip to 3.5% in March 2024, and a more than 15% decline in total job postings at the end of 2023 compared to the previous year.

Why are job requirements becoming more demanding for job seekers?

Job requirements are becoming more demanding due to a more competitive job market, high interest rates affecting company hiring practices, and changes in the hiring process with fewer recruiters to moderate job requirements.

What does the script suggest about the role of recruiters in job postings and hiring?

The script suggests that the decline in the number of recruiters has led to inflated job requirements, as there is less expertise to challenge or moderate the demands of line managers when posting jobs.

How has the ratio of open jobs to active applicants changed on LinkedIn from 2022 to the following year?

The ratio changed from one open job for every active applicant in 2022 to one job for every two active applicants in the following year, indicating increased competition for job seekers.

What is the current focus of employers when it comes to hiring?

Employers are focusing on hiring talent with specialized skills, prioritizing quality of hire, and seeking evidence of actual work capabilities over traditional credentials.

How has the share of US job postings requiring a 2 or 4-year degree changed from 2019 to 2024?

The share of US job postings requiring a 2 or 4-year degree fell from 20.4% to 17.8% between 2019 and 2024, indicating a shift towards skills-based hiring.

What is the potential cost to the US if upskilling doesn't catch up with workplace demand by 2028?

If upskilling doesn't catch up with workplace demand, it could cost the US as much as $975 billion by 2028.

What are some ways job seekers can gain skills, credentials, and experience as suggested by the script?

Job seekers can gain skills, credentials, and experience through volunteering, internships, online training programs, freelancer platforms, and taking jobs to build up experience even if it means starting as the cheapest candidate.

What is the role of public policy in addressing the issue of upskilling in the US according to the script?

The script suggests that public policy should play a role in addressing upskilling by facilitating conversations among companies about training and developing the kind of workers they need, without requiring huge economic shifts.

Outlines

00:00

📈 The Shift to Skills-Based Hiring and Job Market Challenges

The job market has become increasingly competitive and demanding, with 42% of employees feeling excluded from opportunities due to a lack of qualifications or experience. Companies are shifting towards skills-based hiring, focusing more on experience and skills rather than formal education. Despite this, job requirements are rising, and the labor market has cooled due to economic factors like inflation and interest rate hikes. This has led to a slowdown in hiring rates and increased competition among job seekers. Employers are more selective, often choosing candidates with more experience, and are less willing to take risks due to limited access to capital. The hiring process has also changed, with companies reducing the role of recruiters, leading to inflated job requirements and a perceived skills gap.

05:03

📉 Decline in Entry-Level Opportunities and Skills Mismatch

The decline in entry-level and less specialized positions has significantly impacted recent graduates and first-time job seekers. Employers prefer candidates with prior experience, leaving many in a catch-22 situation where they need a job to gain experience but are deemed unqualified without it. Entry-level jobs constitute a mere fraction of total job postings, and there is a significant skills mismatch with many studying subjects that do not align with job opportunities. The US lacks a robust system for upskilling and training, with federal spending on job training being significantly lower than the OECD average. Employers have largely abandoned internal talent development, and the labor market's flexibility disincentivizes significant investment in employee training. This has led to a situation where there are more four-year degree holders than jobs requiring such degrees, while skilled trade positions remain unfilled due to a lack of accessible training.

10:03

🛠️ The Emergence of Skills-Based Hiring and Solutions for Job Seekers

Skills-based hiring is gaining traction, with employers using pre-employment assessments to evaluate candidates' skills and abilities, which are often considered more important than traditional hiring tools like resumes and interviews. Companies like Walmart and IBM are leading the charge by hiring more workers without a degree, and the number of job postings not requiring formal education has increased. Skills-based hiring has proven effective in reducing mis-hires and increasing employee retention. However, making lasting changes to hiring practices is a slow process, and only a small percentage of companies have made significant, lasting changes. Policy intervention is suggested to address the upskilling issue, and job seekers are advised to gain relevant experience through internships, volunteering, or online training programs. Freelancing is another way to build experience and skills, and job seekers should remain hopeful and proactive in their approach to finding employment.

Keywords

💡Job Postings

Job postings are advertisements or announcements for job vacancies that companies use to attract potential candidates. In the script, it is mentioned that job postings have become more demanding, often requiring specific years of experience and certifications, which can be a barrier for job seekers who feel they lack the necessary qualifications.

💡Skills-Based Hiring

Skills-based hiring is a recruitment approach that prioritizes a candidate's skills and abilities over their formal education or credentials. The script highlights a shift towards this method, with employers focusing on what candidates can do rather than their academic background, as evidenced by companies like Google, Apple, and Amazon laying off recruiters and increasing the requirements for job postings.

💡Credentials

Credentials refer to the qualifications, certifications, or degrees that a job seeker possesses. The script discusses how credentials and education are often seen as less valuable compared to skills and experience in today's job market, with 79% of hiring managers valuing skills, experience, and past accomplishments more.

💡Labor Market

The labor market encompasses the supply and demand dynamics of the workforce. The script describes the labor market as having cooled due to economic activity slowdowns and high interest rates, leading to a more competitive job market for job seekers and a more selective hiring process for employers.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. The script mentions a period of high inflation that influenced the Federal Reserve to raise interest rates, which in turn affected the labor market and hiring rates.

💡Upskilling

Upskilling refers to the process of acquiring new skills or improving existing ones to meet the demands of the job market. The script discusses the importance of upskilling for workers to stay competitive and productive, and the challenges faced by the US in providing adequate training and upskilling opportunities.

💡Entry-Level Jobs

Entry-level jobs are positions that typically require little to no prior experience and serve as an introduction to a career. The script points out that entry-level jobs have become scarce, with a significant drop in such positions from 2022 to 2024, leaving many new graduates and inexperienced job seekers struggling to find opportunities.

💡Great Resignation

The Great Resignation refers to the large-scale resignation of employees from their jobs, particularly in the United States, following the COVID-19 pandemic. The script mentions this phenomenon as a factor contributing to the current labor market dynamics, with many people switching jobs quickly, creating disincentives for employers to invest in employee training.

💡Skills Gap

A skills gap is the difference between the skills that job seekers have and the skills that employers need. The script discusses the existence of a significant skills gap in the US, with many people studying subjects that do not align with job opportunities and a lack of training in high-demand industries.

💡Pre-Employment Assessments

Pre-employment assessments are tests or evaluations used by employers to measure a candidate's skills, knowledge, and abilities before hiring. The script notes that more than half of employers use these assessments, with HR professionals considering the results as important as traditional hiring tools.

💡Freelancer Platforms

Freelancer platforms are online marketplaces where individuals can offer their services for short-term contracts or projects. The script suggests these platforms as a way for job seekers to gain experience and build their skills, which can be particularly useful for those looking to break into competitive job markets.

Highlights

In 2023, 42% of employees felt they were excluded from job opportunities due to a lack of formal qualifications or experience.

Lacking the right experience, skills, credentials, and education ranked second among the biggest barriers for job seekers in 2022.

Employers are shifting towards skills-based hiring, focusing more on experience and skills than degrees.

46% of companies plan to increase hiring in the first half of 2024 due to a lack of required skills among current employees.

79% of hiring managers value skills, experience, and past accomplishments more than credentials and education.

The US labor market has cooled due to economic activity slowdown and increased interest rates.

Hiring rates in the US dipped to 3.5% in March 2024, and job postings declined more than 15% at the end of 2023.

Employers are more selective due to a high-interest rate environment and less access to capital.

The hiring process has changed with a decline in recruiters, leading to inflated job requirements.

54% of recruiters prioritize the quality of hire for 2024 through 2029, focusing on specialized skills.

Entry-level jobs dropped from 79% in 2022 to 61%, hitting entry-level workers harder during a labor market slowdown.

Over a third of employers prefer older employees over recent Gen Z graduates, citing unpreparedness for the workforce.

57% of job seekers between 2020 and 2022 were prevented from applying for jobs due to a lack of skills or training.

The US spends only 0.03% of GDP on job training compared to the OECD average of 0.11%.

Employers have largely given up on training, focusing more on external hires than internal promotions.

There's a significant skills mismatch in the US with high demand for skilled trades and fewer people accessing training.

It's challenging to become skilled in trades due to reduced union training programs and reliance on community colleges.

Upskilling is critical for maintaining competitive and productive standards in the US economy.

Skills-based hiring is on the rise, with over half of employers using pre-employment assessments.

Major companies like Walmart and IBM are hiring more workers without a degree, reflecting a shift in hiring practices.

Skills-based hiring can reduce mis-hires, cost, and time to hire while increasing employee retention.

Only 37% of companies made lasting changes to their hiring after increasing the share of workers without a BA degree.

Solving the upskilling issue in the US requires policy involvement and small investments in training development.

Job seekers can prepare by gaining experience through volunteering, internships, online training, and freelancer platforms.

Transcripts

Picture yourself on the hunt for a new job.

After scrolling through numerous job postings, you

finally land on one that seems to be a perfect fit.

That's until you see the required years of

experience, necessary certifications, and a host

of skills you need to be proficient in.

In 2023, 42% of employees felt they were excluded from

job opportunities due to a lack of formal

qualifications or experience.

Lacking enough of the right experience, skills,

credentials and or education ranked second

among the biggest barriers for job seekers in 2022.

The job market today is definitely tougher than the

job market we've seen over the last couple of years.

Many job seekers don't know what they're qualified for

and feel that they're unqualified for jobs even

that, on paper, look like a good fit.

Meanwhile, companies say they are putting skills

first.

There has been a shift over the past few years towards

skills-based hiring, with employers far more concerned

about employees experience and skills than even their

degrees.

46% of companies plan to increase their hiring in the

first half of 2024, because their current employees lack

the required skills.

79% of workers in hiring managers said that skills,

experience, and past accomplishments are more

valuable than credentials and education.

I think right now we see businesses working together

and trying to identify what are the skills that are

really necessary to do the jobs for which they're

hiring today, and to be able to predict the jobs

that they will be hiring for in the coming months and

years.

So why are job requirements becoming more demanding, and

what implications does it have for both job seekers

and the economy as a whole?

The US labor market has cooled in recent months

because overall economic activity has cooled.

We had a big bout of inflation and the fed raised

interest rates to slow down the economy to allow supply

to catch up. As a result, the labor market has slowed

down as well.

Hiring rates in the US have dipped to 3.5% in March

2024, following heights during and after the

pandemic. Total job postings declined more than

15% at the end of 2023 compared to the year prior.

There was one open job for every active applicant on

LinkedIn in 2022.

By the following year, that ratio turned to one job for

every two active applicants.

When there are more candidates on the market

looking for jobs and less jobs out there, the job

market becomes more competitive for job seekers.

But for employers, that means they get their pick of

talent.

If a job says that it requires no experience, but

100 people apply and many of them do have experience,

well, of course the employer is going to take

the person with the most experience.

We also are in a high interest rate environment

where companies have less access to capital, and so

they're less prepared to take a risk.

They're only hiring where needed for sure bet jobs,

and they're not being that experimental anymore.

There's another reason why.

And that is about the hiring process per se, which

has changed. Employers increasingly got rid of

recruiters.

2023 saw a sharp decline in online job postings for job

recruiters with several prominent companies like

Google, Apple and Amazon laying off a significant

number of recruiters and employees in the HR

department.

The recruiters were the kind of professional people who

understood the job market, understood jobs, and would

go to the line managers and say, hey, this job doesn't

need five years experience.

With those people gone, there's no real pushback on

hiring requirements that line managers who really

aren't experts on this stuff, they might ask their

team, what do you think you need to do this job and say,

well, it'll be nice to have a master's degree.

Well, somebody who has five years experience, that would

be great, too. And so the requirements inflate and

then they can't find anybody to fill the job.

And they say, oh, there's this skills gap.

There's a problem in the labor force.

And they don't raise the wages either, right?

So you're trying to fill the same job at the same

pay. But now you're requiring more background,

more experience, more years of education.

Guess what? Hard to do.

As companies grow more selective, 54% of recruiters

said quality of hire will be their top priority for

2024 through 2029.

83% of chief human resource officers said their hiring

talent with specialized skills, while hiring fewer

new employees than they did a year ago.

What we're seeing on LinkedIn is that for

employers, skills are becoming a priority.

73% of recruiters say that that is a priority when

they're trying to source candidates. They want to

know what skills they have, what they can actually do.

What employers want is evidence that you can

actually do the work.

The other thing is they want somebody who's done

exactly that job before and not something that looks

quite similar.

Hiring for entry-level and less specialized positions

dropped from 79% in 2022 to just 61%.

Typically, when the labor market slows, entry level

workers are hit a bit harder than overall workers.

We don't have real entry-level jobs hardly at

all. Every employer wants to hire somebody who's

already worked someplace else.

Entry-level jobs only account for 2.5% of all the

jobs posted on ZipRecruiter as of the end of April 2024,

and just 1.9% of all jobs available today say they do

not require experience at all.

Over a third of employers refrain from hiring recent

Gen Z college graduates in favor of older employees,

with more than half saying recent college graduates are

unprepared for the workforce. A survey also

found that more than half of Americans who graduated

from a two year or four year college did not apply

for an entry-level position because they felt

unqualified.

Many entry-level job seekers find themselves in a catch

22. In order to get experience, you'd need a

job, but in order to get that first job, you need

experience, and that is a very challenging position to

find yourself in.

57% of general job seekers between 2020 and 2022 also

said that a lack of skills or training prevented them

from applying for a job they wanted.

84% of unemployed workers said they are interested in

more opportunities to learn more skills.

The United States does not have a robust system that

enables us to support the kind of upskilling and

training that workers need throughout their career in

order to advance.

Federal government spends very little and has little

control over education and on training, too.

There are some pretty big training programs the

federal government pays for, but it's not really

where the action is. It's state and local governments.

And those have been squeezed.

And in many states they're squeezing everything down.

You know, less and less spending.

OECD countries, on average, spent 0.11% of their GDP on

training their workers in 2021.

In comparison, the US spent only 0.03% of their GDP on

job training.

One of the reasons we may not see as much on the job

training in the US as we see in other countries, is

that we rely on the private sector to do a lot of our

training.

Employers have largely given up on training, particularly

compared to where they were 30 or 40 years ago.

They're not developing talent internally.

They're looking outside to hire people rather than to

promote them from within.

And there's a good reason for that.

Our labor market in the United States is very, very,

very flexible. You can pour a lot of money into an

employee as an employer, only to see them leave after

two months or three months.

And so there are disincentives in our labor

market for employers to make big investments in

workers, especially after the great resignation when

so many people were switching jobs very quickly.

There's also a huge mismatch between the skills employees

have and the skills employers are looking for.

So I think we have a huge skills mismatch problem in

the United States with lots and lots and lots of people

studying subjects for which there aren't that many job

opportunities and very, very few people getting the

skills in trades and industries where they're in

very, very high demand.

Right now, there are more people that have four year

degrees than there are jobs for which businesses are

hiring with that requirement.

At the same time, there's too few people who have been

able to access the kind of training or skills programs

that enable them to get jobs that require more

education than a high school diploma and less

education than a four year degree.

Believe it or not, it's a lot harder to become one of

those skilled trades than you would think.

The union training programs are great, but they're

smaller proportion of the economy by a lot than they

used to be. So if you want to become a welder in many

places, the community colleges are your maybe only

choice. And that becomes like a two year degree

program. Community colleges, don't, we think,

cost that much, but if you don't have the money to pay

for it, it's a burden.

Jobs that require skills training are really the

backbone of the economy.

We saw this during the pandemic.

We see it today still with transportation and the

supply chain.

And the businesses that hire these workers are

creating jobs in our community and are really

growing local economies.

It could cost the US as much as $975 billion by 2028, if

upskilling doesn't catch up with the demand in the

workplace.

In order to keep having rising standards of living

in the US, we need to do two things: we need to be

productive, and we need to maintain our competitive

edge in the global economy.

In order to do that, it's important for workers to

upskill and be able to adopt all the new

technologies that are available in order to help

us stay competitive and be productive.

Despite the challenges in upskilling, more employers

are turning towards skills-based hiring.

A study from 2023 found that more than half of

employers use pre-employment assessments

to test their job applicants' skills,

knowledge and abilities, with 79% of HR professionals

saying those scores are just as important, if not

more important, than traditional hiring tools

like resumes and interviews.

Skills based hiring is when employers consider

candidates based on what they can do, and not

necessarily their pedigree or degree credentials.

The idea is simply, could we go back to just figure out

what skills you need and then see whether people are

actually have those skills and hire for the skills?

The biggest impact can be seen in the rise of jobs

that require no degrees.

Major companies like Walmart and IBM have

publicly announced their intention to hire more

workers without a degree.

In January 2024, 52% of US job postings on Indeed did

not mention any formal education requirement, up

from 48% in 2019.

The share of US job postings requiring 2 or 4

year degrees fell from 20.4% to 17.8% from 2019 to

2024. For reference, just 46.6% of Americans have an

associate's, bachelor's, graduate, or professional

degree as of 2022.

We're seeing businesses removing degree requirements

in a hope of expanding the pool of workers from which

they can hire.

Skills-based hiring has shown to be effective in

reducing mis hires, as well as cost and time to hire,

while increasing employee retention by 89%.

86% of candidates also said that skills-based hiring

helped them secure their dream job.

But whether it actually makes a long-lasting impact

is up to debate.

A study from 2024 found that only 37% of companies

that had increased their share of workers hired

without a BA degree by nearly 20% made lasting

changes to their hiring.

In 2023, skills-based hiring provided new

opportunities for less than 1 in 700 hires.

It takes time for a culture shift like that to funnel

through the organization to every single hiring manager,

so the top of an organization may choose one

thing, but the actual hiring manager and

interviewers and recruiters may still be doing something

different.

Experts say solving the issue of upskilling in the

US requires the role of policy.

It should be a public policy concern because we have lots

of young people who are skilled and ambitious and

want to do things and can't crack that ceiling.

And we have employers who, frankly, are making

mistakes. They're just churning through people at

sort of lower-level jobs rather than trying to get

somebody and develop them and hang on to them for a

little bit.

And they don't need to be huge economic shifts in how

we're spending dollars.

It needs to be relatively small investments that help

companies come together and have conversations about how

folks within one metro area, or one rural part of a

state, are going to be training and developing the

kind of workers that they need.

For current job seekers, there are several ways to

prepare their applications to better suit the needs of

current employers.

I think the advice on this is not new, and the advice

is what employers want to see is, have you done this

work before? Right?

And so that means can I find any situation where I

can do this work, even if I'm volunteering someplace

or getting an internship that looks exactly like the

kind of work I want to do.

And if I can do that, my odds on being able to get a

job are just much better.

Increasingly, there are lots and lots of cheap,

affordable, convenient, accessible online training

programs, many of which have a large practical

component. There are also freelancer platforms where

you can get experience doing certain jobs.

You can often get jobs just by being the cheapest

candidate, and sometimes it's worthwhile doing that

to build up that experience and get good reviews.

So don't feel out of hope.

There are ways to gain skills, credentials, and

experience that can be affordable and convenient.