THESTATEOF

2025

SKILLS-BASEDHIRING2025

CONTENTS

01

Methodology01

02

Thehighlights03

03

Hiringhasamatch-makingproblem06

04

AIinthehiringprocess22

05

Degreerequirementsaredeclining34

06

Aholisticapproachleadstobetterhiringdecisions41

07

Skillstestsinfocus48

08

Diversityandinclusionarestillonthetable58

09

Conclusion

65

10

Sources67

01METHODOLOGY

TheStateofSkills-BasedHiringReport2025

2

01METHODOLOGY

Thisstudysurveyed1,076jobseekersand1,084individualsinvolvedinhiringdecisionsacrosstheUKandUSinApril2025.Jobseekersweredefinedasindividualscurrentlylookingforworkorwhohaddonesointhepast12months.Employersweredefinedasindividualswhohaveparticipatedinrecruitmentorhiringprocessesinthepastyear.Datawascollectedviaindependentthird-partysurveypanelstoensureabroadandunbiasedrespondentbase.Respondentswerebalancedacrossgender,agegroups,andincomebrackets,withquotasinplacetosupportdemographicrepresentativeness.

02THEHIGHLIGHTS

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1.Hiringhasa

match-makingproblem

Aperfectstormofpoliticalchanges,

AIadvancements,andmarketshifts

ismakinghiringchallenging.63%of

employerssayit’shardertofindgreat

talentthanitwaslastyear,and70%of

jobseekerssayit’shardertofindajob.

Despitefindinghiringharder,mostare

happywiththeirrecenthires–especially

employerswhoareusing

skills-based

hiring

.Thisisn’tatalentshortage.Hiring

hasamatch-makingproblem.

2.AIinthe

hiringprocess

65%ofemployersareusingAIintheir

hiringprocess,and94%ofthemsay

it’simprovedhowtheyhire–butusage

amongjobseekersislowerthanyoumight

think.Mostcompaniesclaimthey’ve

noticedmore

AI-generatedresumes

,but

only37%ofjobseekerssaythey’reusing

AItocompleteapplications.

3.Degreerequirements

aredeclining

Morethanhalf(53%)ofemployershave

ditched

degreerequirements

;upfrom

30%lastyear.Thepracticeisespecially

prevalentintheUS,where57%have

eliminatedthem.Despitethis,only32%

oftheemployerswesurveyedthinkit’s

lessimportantforcandidatestohave

degreesthanitwas5yearsago–and

41%sayit’smoreimportant.

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4.Hiringholistically=

betterhiringoutcomes

Employersareincreasinglylooking

beyondtechnicalskillsorexperience

alonewhentheyhirepeople,andthere’s

anearconsensusonhowimportant

thisis.72%ofemployersand82%of

jobseekersagreethatconsideringthe

wholecandidate(includingtheirskills,

personality,andculturalalignment

or

cultureadd)

leadstobetterhiring

decisionsandimprovedorganizational

outcomes.

5.Skillstests

infocus

85%ofemployersareusingskills-based

hiring–anincreasefrom81%lastyear.

76%areusingskillsteststomeasure

andvalidatetheircandidates’skillsin

2025,makingthisthemostpopularway

todoskills-basedhiring.Employersagree

thatskillsteststrumptraditionalhiring

methodslikeresumescreeningwhenit

comestopredictingjobsuccess.

6.Diversity&inclusion

arestillonthetable

DespitetheDEIrollbackwe’reseeinginthe

US,diversityandinclusionarestillonthe

tableforthevastmajorityofcompanies.

79%sayhavingamorediverseteamis

importantfortheirorganization,and83%

saybuildinganinclusivecompanyculture

isimportant.

03HIRINGHAS

AMATCH-MAKING

PROBLEM

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Hiringmatch-makingAIintegrationDegreerequirementsHiringholisticallySkillstestsDiversity&inclusion

03HIRINGHASAMATCH-MAKINGPROBLEM

Mostanecdotesaboutthestateofthejobmarkettodayhaveonethingincommon:Peoplearefindingitdifficult.Whetheryou’reatalentedjobseekerlookingforyournextroleorahiringmanagerhuntingyournextsuperstaremployee,itseemstobegettingharderforpeopletofindwhatthey’relookingfor.

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3.1Whyisithardertofindtalent?

What’sthemostdifficultpartofyourhiringprocesstoday?

63%ofemployerssayit’shardertofindgreattalentthanitwaslastyear.Reasonsforthisinclude:

1.It’shardtoknowifcandidateshavetherightskills

Morethanhalfofemployerssaydeterminingifcandidateshavetherightskills(bothsoftandtechnical)isthemostdifficultpartoftheirhiringprocesstoday.Despitetheshifttoskills-basedhiring,teamsarestillgettingtogripswiththebestwaytomeasureandidentifyskills.

2.Resumescreeningisnotaneffectivewaytomake

screeningdecisionsupfront

Withthemajorityofemployersstilldoinga

resumescreen

asafirststep

intheirhiringprocess,manyaremissingoutontopcandidateswhodon’t

havethetypecastresumethey’relookingfor.Thisisatangibleissuefor

jobseekers:59%ofthemsaytheyhavetroublestandingoutwiththeir

resume(andthisgoesupto61%forwomen).

ofUKemployersreporthavingproblemswithresumes

ofUSemployersreporthavingproblemswithresumes

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86%OFUSEMPLOYERSREPORT

HAVINGPROBLEMSWITHRESUMES

34%

45%

39%

27%

28%

14%

89%OFUKEMPLOYERSREPORT

HAVINGPROBLEMSWITHRESUMES

32%

34%

34%

23%

26%

11%

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3.Employersfeelliketheyaren’tgettingenoughhigh-qualitycandidates

Employersfeelliketheyaren’tgettingenoughhigh-qualitycandidates,with2in10sayingtheydon’tgetenoughcandidatesfullstop.Butrecentresearchshowsthat,whileemployerssayalackofqualityapplicantsisanissue,jobseekerssaytheirchallengeisadearthofqualityrolestoapplyto.[2]Sowhichoneisit?Theproblemisn’talackofgoodrolesorashortageofgoodapplicantstofillthem;it’samatch-makingproblem.They’renotfindingeachother.Therealchallengenowisconnectingtherightcandidatestotherightjobs.

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3.2Whyisithardertofindajob?

7in10jobseekerssayit’sgettinghardertofindajob.Why?Thesamereasonit’sharderforemployerstofindtoptalent:We’vegotamatch-makingproblemonourhands.

Thefollowingissuesapplyforjobseekers:

1.Difficultystandingoutwithresumes:59%ofjobseekershavetroublestandingoutfromthecrowdwiththeirresume,andthispercentagegoesupto61%forfemalejobseekers

2.Overlookedbecauseofalackofqualificationsorexperience:54%feelthey’redisadvantagedbecauseofalackof

formalqualificationsorexperience

3.Morejobseekersareexperiencingbiasthanlastyear:42%ofjobseekerssaythey’veexperiencedbiasinthehiringprocess(thisisanincreasefrom31%lastyearand21%in2023).ThisissueismoreprevalentintheUS,where45%haveexperiencedbias,comparedto38%ofUKjobseekers

Beyondthis,adeclineinvacanciesisplayingarole,especiallyintheUK.ThelatestlabormarketfiguresshowacontinueddropinUKjobvacanciesfromJanuarytoMarch–the34thconsecutivequarterlydecline.Asaresult,more

peoplearelookingforworkwhilefewerrolesareavailable.

ThisisreflectedintheUK’semployment-to-vacancyratio,whichisapproximately2:1comparedto1:1intheUS.[3,4]Thismeansthatthereareapproximately2unemployedindividualspervacancyintheUK(thelasttimethiswasthecasewasin2017),comparedtojust1unemployedindividualpervacancyintheUS.

Whilstsomesectorsarebeinghitworsethanothers,almosteveryUKsectorhasseenadeclineinvacancies.ThisiscontributingtothechallengesUKjobseekersarefacingandexacerbatestheproblemsoutlinedabove.

59%

havedifficultystandingoutwiththeirresumes

54%

havebeenoverlookedbecauseof

alackofqualificationsorexperience

42%

ofjobseekersare

experiencingbiasthisyear

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3.3AnespeciallychallengingjobmarketforGenZ

Amajorityacrossallagegroupssayit’shardertofindwork,butGenZisbeinghithardest.

Three-quartersof18-29-year-oldsarefindingithardertogetajob.

Difficultyinfindingajobbyagegroup

18-2930-44

57%

33%

9%

1%

45-6060+

Myparents’ideaof‘ifyou

workhard,you’llgetwhatyouwant’doesn’treallyworkanymore.Theoldergenerations’expectationthatifyou’vegota‘gooddegreeandgoodskillsyou’llbefine’isjustnolongertenable.IfeellikeI’mthrowingmyselfatabrickwall.

anOxbridgegraduateontoday’sjobmarket

(source)

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ThejobmarketismorechallengingforGenZforacoupleofreasons:

1.The“Catch22”ofnothavingenoughexperience:JobseekerswithlimitedexperienceenteraCatch22wherethey’reunabletolandjobsbecausetheydon’thavetheexperiencerequired,butareunabletogainthatexperiencewithoutgettingajob.Thisissuedisproportionatelyaffectsthosefrompoorersocio-economicbackgroundswhocan’taffordtotakeunpaidinternships.

2.Acompetitiveentry-levelmarketforgraduates:Thecompetitionisextremeforentry-level,andparticularlygraduate,roles.IntheUK,it

takesgraduatesanaverageof5.6monthstofindajob,whichisalmost2monthslongerthanthenationalaverage.Anentry-leveljobwithminimalqualificationandexperiencerequirementstakesonaverage2.2monthstosecure.[3]

Theseissuesdon’texistinavacuum.Withglobalmarketsroilinganduncertaintimespersisting,it’sanerve-wrackingtimetobeajobseekeratanyageorlevelofexperience.Graduateandentry-levelrolesare

primedfor

skills-basedhiring

:Experienceisscarceinapplicantpoolsforrolesofthiskind,andemployerscanbreakthecatchbyhiringforskillsandpotentialfirstandforemost.

3.4Howmany

companiesareusingskills-basedhiring?

Thewaycompanieshireischanging.85%areusingskills-basedhiringin2025,anincreasefrom81%lastyear.67%areusingresumes–downfrom73%in2024–markingamoveawayfromtraditionalhiringtoolsandtowardspracticesthatprioritizeskills.Thisisan8%decreaseinresumeusage.

Yes,I’musingskills-basedhiring

No,I’mnotusingskills-basedhiring

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Althoughresearchintoskills-basedhiringisraisingquestionsaroundhowcompaniescanprioritizeskillsmostmeaningfully,theshifttoaskills-firstmindsetisstillverymuchunderway.[1]So,givenallthewindbeneaththewingsoftheskills-basedhiringmovement,whyishiringstillsodifficult?

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3.54in5employersaresatisfiedwiththeirrecenthires

It’sharderthanevertomatchthebesttalenttotherightroles.Thegoodnewsis,onceemployersdofindtheirmatch,4in5ofthemaresatisfiedwiththehiresthey’remaking.Thisissolid,although

ourdatashowsaslightdeclineinsatisfactionacrossthelastthreeyears.

PERCENTAGEOF

EMPLOYERSWHOARESATISFIEDWITHTHEIRRECENTHIRES

87%

83%

80%

73

UKemployersaremoresatisfied

withtheirhiresthantheirUScounterparts

%

ofUSemployersaresatisfiedwiththeirhires. 22%areneutraland5%aredissatisfied.

ofUKemployersaresatisfiedwiththeirhires.12%areneutraland3%aredissatisfied.

85%

satisfiedwithhires

(usingskills-basedhiring)

satisfiedwithhires

(notusingskills-basedhiring)

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Skills-basedhiringcontinuestobringingoodhiringmatchesforemployers.Employerswhouseskills-basedhiringarefarmorelikelytobesatisfiedwiththeirhires–and34%ofthemreportbeing‘verysatisfied’(vs.only18%ofemployerswhodon’tuseskills-basedhiring).They’realsomorelikelyto

removedegreerequirements

andmorelikelytouseAIinthehiringprocess.

Whenweaskedemployersifthey’remakingqualityhiresthanksto(ratherthandespite)theircurrenthiringprocess,13%saidno.Thisgoesupto20%foremployerswhoaren’tusingskills-basedhiring.

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3.6Whyareemployersdissatisfiedwiththeirhires?

Only4%reportedbeingdissatisfiedwiththeirrecenthires(theother16%feelneutral).Unhappyemployerscitedthefollowingreasons:

?69%sayit’sbecausetheirnewhireslackedmotivation

?45%sayit’sbecausetheydidn’thavetherightskills

?33%saytheymisrepresentedthemselvesontheirapplication

?24%sayit’sbecausetheyweren’talignedwiththecompanyculture

Findingcandidateswiththerightskills,andvalidatingthoseskills,iscrucial–butlackofmotivationisthemostprevalentissueforemployers.Thisflagsaneedforemployersto

hirebeyond

skillsandexperience

andlookatfactorslikeculturalalignmentandbehavioralcompetenciesduringthehiringprocess.

69%

45%

33%

24%

REASONSFOR

DISSATISFACTION

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3.7Whatmakesagreathire?

Weaskedemployerswhatdistinguishesasuccessfulhirefromamis-hire.Theytoldusthatthese4thingsdistinguishasuccessfulhirefromamis-match:

Havingtherightskills

Havingthe

rightexperience

Havingthepotentialtolearnandgrow

Beingalignedwiththecompanyvaluesandculture

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Althoughskillsandexperienceemergeatthetop,potentialtolearnandvaluesalignmentaren’tfarbehind.

Thisgoestoshowthatemployersarethinkingholisticallyaboutwhatmakesagreathire.Bythislogic,theyshouldhireholisticallytoo.

Evaluatinglearningpotentialandculturalalignmentaswellasskillsandexperienceisbecomingacriticalpartofthehiringprocess.Evaluatinglearningpotentialandculturalalignmentaswellasskills

andexperienceisbecomingacriticalpartofthehiringprocess.ThisisespeciallytrueinanAI-firstera.

Withskillsetschangingmorerapidlythaneverbefore,it’stimeforemployerstoshifttohiringstrategiesthatencompassthewholecandidate.Therightskills,therightexperience,thepotentialtolearnandgrow,andalignmentwithcompanyvaluesandculture–employersknowthatthese4thingsmakeagreathire.It’stimetobuildhiringprocessesthatcaptureallfour.

WHATDISTINGUISHESASUCCESSFULHIREFROMAMIS-HIRE?

60%

56%

54%

49%

04AIINTHE

HIRINGPROCESS

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04AIINTHEHIRINGPROCESS

AIcontinuestoshakethingsupthisyear.GenerativeAIhasre-imaginedthejobhuntandthehuntfortopcandidates,andjobseekersandemployersalikeareusingittostreamlineandautomateapplicationprocesses.

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4.17in10companiesareintegratingAI

Ourdatashowsthat7in10companieshavetakenstepstointegrateAIintotheirworkforceorprocesses.AIintegrationismorecommonintheUK,where72%ofemployershaveintegratedAI,versus68%intheUS.

Thisissignificant.MoreemployersareusingAIthannot.It’sthenewnormal.However,ourdatashowsthatlesscompaniesareintegratingAIthanlastyear:84%oftheemployerswesurveyedin2024wereintegratingAI,markinga17%decreaseoverall.

ThiscouldbeasignthatAI’shypecycleispeaking.EmployersarelesslikelytobeintegratingAIforAI’ssakenowandareadoptingitmorethoughtfullyandcautiouslythanbefore.Employersalsohavemorecauseforcautionnowaslegislationandconversationsaround

theethics

ofAIdevelop.

Here’sabreakdownofhowemployersareintegratingAIthisyearcomparedtolast:

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4.2HowareemployersusingAIinthehiringprocess?

65%ofemployersareusingAIinthehiringprocess.Thisgoesupto70%forUSemployers,anddownto60.5%forUKemployers.

Here’sabreakdownofhowthey’reusingit:

HowareyouusingAIinyourhiringprocess?

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3in5employersareusingAItowritejobdescriptions,with59%screeningresumesand51%sourcingcandidateswithAI.Employersareslowertoadoptitintotheinterviewprocess,whichisunderstandablegiventhegreaterneedforahumantouchatthisstage.

DespitewidespreadreportsofAI’simpactonhiringspeed,accuracycanstillbeanissueforthetech.Hiringishigh-stakesandsomehumansupervisioniscrucialifemployerswanttoensurethey’renotmissing

outongreatcandidates.Withouttheappropriatelevelofcaution,employersriskexacerbatingtheexactmatch-makingissuethey’retryingtosolvewithAI.

WithseverallawsuitsnowunderwayagainstcompanieswhohaveintegratedAIintotheirhiringprocessesunethically,cautionisindeednecessary.AnincreaseinAI-relatedlawsuitsmayalsoexplainwhyAIintegrationhasdroppedoverallthisyear.

areusingAItowritejobdescriptions

areusingAItointerviewcandidates

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4.3Skills-basedhiringemployersareusingAImore

HowareyouusingAI?

Ourdatashowsthatemployerswhoareusingskills-basedhiringaremorelikelytouseAIintheirhiringprocessandbeyond.

WhatIloveaboutthemovetointegratemoreAIinrecruitmentprocessesisthatitdoes,wehope,focustheconversationbackonskills.AsAIbeginstoreviewCVsatscale,itwillbelookingtounderstandandassessskillsofthecandidate.In

thesameway,theconversationsmove

moretowardshiringfor“softskills”or,

asweprefertocallthem,thehuman

skillslikecommunication,management,problem-solvingthatwillbefundamentalforfutureofworksuccessasAItakesonmoretask-basedheavylifting.

OliveTuron,HeadofPeople&CultureatTestGorilla

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4.494%sayAIhasimprovedtheir

hiringprocess

Althoughemployersseemmorereticenttouseitthanlastyear,thosewhoareleaninginareseeingresults.Thevastmajority(94%)oftheemployerswhoareusingAIinthehiringprocesssayit’sbroughtimprovements.Thisgoesupto97%forUSemployers,anddownto92%forUKemployers.

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3in10employersarenotintegratingAIatall.ThetopreasonemployerscitefornotusingAIisthat‘integratingAIisnotimportantformyorganization’(44%).32%sayit’sbecauseofthecostandcomplexityofintegratingAI,and30%sayit’sduetothedatasecurityandprivacyrisksinvolved.

AIismorerelevantforsomeindustriesthanothersrightnow.WhilegenerativeAIistransformingjobsthatrelyoncomputer-basedtasks(projectmanagement,programming,contentcreation),it’snotsorelevantfortradework(likeconstruction,electricalwork,orplumbing)thatreliesonmanuallaborinstead.

HASUSINGAIIMPROVEDYOURHIRINGPROCESS?

1%

47%

47%

5%

Whyhasn’tyourcompanytakenanystepstointegrateAI?Percentageofemployerswiththisissue

Notimportantformyorganization

44%

CostandcomplexityofusingAI

32%

Datasecurityandprivacyrisks

30%

Ethicalconsiderations

26%

Don’tknowwheretostart

17%

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37

4.5HowarejobseekersusingAI?

%

ofjobseekersareusingAItocompletejobapplications

70%

Ontheflipside,37%ofjobseekersareusingAItocompletejobapplications.Thisisperhapslowerthanemployerswouldexpect,since73%ofemployerssaythey’venoticedmore

AI-generated

resumes.

ofemployerssayAIgeneratedresumesareeasytospot

18%

Spendlessthananhour

55%

19%

Spend3-5hours

Spend1-3hours

Thisisreinforcedbyhowlongjobseekersarespendingontheirapplicationsin2025.55%ofjobseekersarestillspendingbetween1and3hourspreparingtheirapplications,withonly18%spendinglessthananhour.ThisnumberwouldbehigherifmorejobseekerswereusingAItocompletetheirapplications.

AIissavingemployersmoretimethanitisjobseekers,itseems.71%ofemployersspendlessthan15minutesreviewingaresume.Aquarterofthemspendlessthan5minutes.JobseekerswhosendoutAI-generatedresumesdoruntheriskofnotstandingout,so,forthoseusingAIasastartingpoint,spendingextratimesprucingthingsupdoesnotgoamiss.

WhenweaskedjobseekershowtheyfeelaboutemployersusingAItoscreentheirresumes(which59%ofthemare),wefoundamixtureoffeelings.29%saidthey’reworriedaboutit,27%feelgood,andtheother45%areneutral.

Theseresultsreflectsentimentsfromjobseekersonline.Neutrality

iscommonandstemsfromageneralacceptancefrombothsidesthatAIispartandparcelofthehiringprocessnow,whethertheylikeitornot.It’sastalemateofsorts:Employersknowjobseekerswilluseit,andjobseekersknowemployerswilluseit.Oneithersideofthat,peopleareeitherenthusedorworried:

?JobseekerswhoareusingAIforapplicationsaremuchmorelikelyto