Skills vs Qualifications: The Key to Winning Top Talent in Today’s Market

In today’s dynamic labor market, job seekers are increasingly drawn to employers that prioritize skills over formal degrees, as many see real-world experience and practical abilities as a better measure of potential.

Alternatively, the organizations that focus too heavily on traditional credentials risk overlooking a large pool of talent–especially candidates with non-traditional backgrounds or those who have gained experience through alternate learning paths. This also includes Gen Z workers, which are expected to make up 27% of the workforce by 2025, and will become increasingly critical to the ongoing success of businesses in the coming years. As such, organizations stand to reap several benefits from focusing their talent strategy on skills, including wider talent pools, cost savings, stronger employer brand, and more.

In partnership with Dynata, Magnit conducted a survey of 1,000 U.S. consumers, ages 18 and above, to understand how their skills are impacting their preferences and challenges related to employment. In this blog post we’re going to cover these results and takeaways organizations can implement to enhance their talent strategies going forward.

Skills Outshine Credential in Driving Career Success for Workers

The survey results highlighted a significant shift in how employees value skills versus traditional credentials in the workplace. Over one-third (36%) of respondents attribute their job success primarily to skills, while 42% credit a balance of skills and credentials. Notably, only 8% said credentials alone were key to their success.

Additionally, almost half (46%) of workers revealed they are not currently employed in the field of their formal college degree, emphasizing the importance of transferable skills. Moreover, barriers such as degree (41%), licensing (41%), and trade school (35%) requirements discourage many from applying for jobs, underlining the need for employers to rethink rigid qualification criteria.

Employers can leverage this knowledge to attract and retain top talent by prioritizing skills in job descriptions, interviews, and performance evaluations. Highlighting a skills-first hiring approach can increase job interest, as 72% of respondents said such a focus would make them more likely to apply. To maximize retention, companies should create opportunities for continuous skill development, such as offering on-the-job training, mentorship programs, and reskilling initiatives. By shifting emphasis from credentials to skills, employers can tap into a broader talent pool, foster a more inclusive workplace, and ensure employees feel valued for their capabilities and contributions. Gain insights on how your organization can foster inclusion in the contingent workforce in our white paper.

Gen Z is Driving the Skills-First Revolution

Gen Z is challenging traditional hiring practices by advocating for a skills-first approach. Known for its digital savviness and drive for practical knowledge, Gen Z workers are turning away from the traditional degree-based model and pushing employers to rethink how they assess talent.

The survey findings underscore a significant shift in Gen Z's perspective on education, skills, and career success. Just 29% of respondents are currently working in the field of their formal college degree, while over half (54%) are not—a clear indication that career paths are becoming less tied to traditional academic backgrounds.

When asked about what contributed to their success, the highest number (40%) credited a mix of skills and credentials, while 34% pointed to skills alone. These findings highlight that, for Gen Z, practical abilities and experience carry more weight than formal qualifications when it comes to achieving workplace success.

For employers, this data offers actionable insights into attracting and retaining Gen Z talent. With nearly half of respondents stating that formal degree and licensing requirements would deter them from applying for a job, companies should reconsider rigid hiring criteria. Instead, emphasizing previous experience and niche skills—cited by 21% of Gen Z as the most important hiring factors—can open the door to a broader, more qualified pool of candidates.

Additionally, 67% of respondents said they’d be more interested in working for an employer that prioritizes skills over credentials. By framing job descriptions, interviews, and internal career development opportunities around skills, companies can align with the expectations of this generation and enhance their employer brand.

To retain Gen Z employees, employers should invest in skill-building opportunities and access to certifications that align with job roles. These initiatives not only foster growth but also ensure employees feel supported in their career development. By valuing what Gen Z values—practical skills, experience, and flexibility in career paths—employers can attract top talent and build a workforce poised to succeed in an evolving job market. Discover what other factors are driving the retention of Gen Z talent in our blog.

Interested in learning more about instilling skills-first strategy? Check out our blog: 4 Critical Steps for Deploying a Skills-Based Hiring Approach to Talent Acquisition and Retention.