Many employers have embraced skills-based hiring — focusing on a candidate’s abilities, passion, and potential rather than degrees or past job titles — as the future of talent. What’s holding many back are internal habits and assumptions that make it hard to move from intention to execution — despite growing evidence that employers can carve their own path when they choose to.

That’s where the Skillability Index comes in. Produced by the Burning Glass Institute, a data-driven research organization focused on the future of work, the Index aims to empower business leaders to overcome barriers to enacting new hiring strategies by offering a tool to measure, benchmark, and improve how they recruit, hire, and advance talent.

“Skills-based hiring has picked up so much momentum,” said Erik Leiden, managing director of workforce strategy at the Burning Glass Institute. “But until now, there hasn’t been a reliable way to measure whether companies are actually doing it.”

Why does skills-based hiring matter? Retention and upward mobility.

The Skillability Index revealed that when employers focus on skills and strengths — such as adaptability, problem-solving, creativity, and drive — for hiring and promoting, it's a win-win for workers and their employers. Focusing on a candidate’s skills, alongside their human potential, abilities, and strengths rather than their degree or previous job title, can lead to higher retention rates for employers and upward mobility for employees.

According to the Index, when nondegree candidates get hired into a role that no longer requires a degree, employers experience a 20% increase in retention.

“When people earn more, they stick around,” Leiden said. “And companies that promote more retain more.”

For employers, higher retention translates into lower hiring costs, fewer productivity losses, greater institutional knowledge, and more seasoned internal talent pipelines. For those experiencing high turnover, the return on investment is almost immediate.

According to the Index, when a worker without a degree moves into a role that previously required one, they see a 25% salary increase, translating to more than $12,400 a year.

This upward mobility compounds over time, creating long-term economic stability for workers, their families, and their communities.

A new way to measure what matters

One of the most striking finds is the wide variation in company performance, even within the same industry. For example, top-performing firms are three times more likely to hire workers without degrees compared with their peers.

"This tells us they don't have different institutional headwinds other than the ones that they've made up within their own companies," Leiden explained. "It's about a company's intention, commitment, and execution of skills-first hiring practices."

This finding highlights that for many employers, the barrier to executing on innovative hiring solutions may not be a lack of will, but a lack of measurement. Without benchmarks and diagnostics, companies struggle to identify which roles are best suited to these approaches, track their progress over time, learn from challenges and opportunities, and develop evidence of impact to build internal buy-in.

The Skillability Index offers employers a roadmap for overcoming that barrier and making meaningful, lasting changes to their hiring and advancement practices.

What leaders do differently. Examples from a restaurant, retailer, and private equity firm

To help employers understand which approaches might work best for them, the research identified four archetypes of nondegree recruitment and hiring:

1. Skills champions: These are businesses that have a relatively high level of removing degree requirements in job postings and actually hiring nondegree talent.
2. Quiet reformers: Companies that hire nondegree talent despite still listing degree requirements.
3. Aspiring adopters: Employers that remove degree requirements but see little hiring change.
4. Credential-focused firms: Companies that maintain degree-centric practices.

The organizations that stood out in the Skillability Index are redefining hiring and advancement.

For a major fast-casual restaurant chain (featured anonymously in the report) that opens hundreds of new locations every year, promoting from within allows it to rely on frontline employees who know operations inside and out. Approximately half of its most senior local leaders started as crew members without college degrees.

“They’re deeply dedicated to promotion from within,” Leiden said. “Some of their senior vice presidents got their degrees 13 years into working there — sponsored by the employer.”

In a tight labor market, internal mobility became a competitive edge.

One national home improvement retailer began its talent transformation journey in its stores.

“They needed someone on every shift who could perform very specific tasks like cutting wire, tinting paint, or helping a customer with their electrical setup,” Leiden said. “Those are individuals with learned skills, not necessarily degrees.”

By mapping the skills and capabilities required on the floor, the company was able to hire based on ability rather than pedigree.

Talent innovators have also reimagined their interview practices to focus on candidate behaviors such as problem-solving, navigating unfamiliar situations, and responding to feedback — characteristics that can be more accurate signals of a candidate's ability to perform well in a role.

‘The business case is strong’

Some leaders anchor their talent transformation efforts in business value and their mission, proving that profit and people can coexist.

A leader from one of the world's largest private equity firms, for example, told researchers that even if the business case didn’t exist, they’d pursue new hiring and development practices anyway.

“It’s the right thing to do,” Leiden recalled him saying. “The business case is strong — but it’s not the only reason.”

The Skillability Index provides the clarity leaders need to act intentionally, measure progress, and build the kind of talent systems that create value for both people and business, while also showing that employers across industries and company sizes are making this shift together, learning from shared success rather than going it alone. 

“What the skills-first hiring leaders show is that you can do this,” Leiden said. “And when you do, the results are significant. This is not noise. This is deliberate decision-making with real wins for companies and workers.”

To learn more about the Skillability Index and its findings, visit The Burning Glass Institute website.

The Skillability Index is supported by the Charles Koch Foundation, which as part of the Stand Together community funds cutting-edge research and helps expand postsecondary educational options.

Learn more about Stand Together’s efforts to transform the future of work and explore ways you can partner with us.