Skills-first talent recognition reflects a broader shift in employer practices and typically unfolds in four steps, which this chapter examines through concrete examples. Organisations first identify priority roles and engage relevant internal and external stakeholders to support implementation. They then update job descriptions to specify the skills required to perform each role. Hiring processes are subsequently adapted to assess and select candidates based on demonstrated skills, with explicit attention to fairness. Finally, skills-first principles are embedded beyond recruitment within wider talent management practices, including performance assessment, career progression and the design of personalised skills development pathways.
A Skills‑First Labour Market
Abstract
Skills-first talent recognition is expanding, but requires the right tools
Employers can initiate their skills-first journey through targeted pilots in a small number of roles, while engaging stakeholders early to support shared learning and sustained commitment. Suitable pilot roles can be identified through a broad review of job descriptions, or by focusing on specific priorities such as shortage occupations and entry-level positions.
Employers should translate selected roles into skill requirements, drawing on skills language infrastructure, such as skills-focused occupational standards. While skills are increasingly referenced in job advertisements, a skills-first approach makes them the main criterion for recruitment decisions, with qualifications and experience playing a complementary role.
Selection processes should prioritise demonstrated skills through structured assessments and competency-based interviews, delivered internally or via specialist providers. Across OECD countries, the use of pre‑employment tests is expected to grow, supported by digital tools and emerging technologies that allow more systematic and scalable assessment of skills.
Removing degree requirements alone does not automatically expand opportunities for underrepresented groups. Employers need to take deliberate measures to mitigate bias and expand access, including blind recruitment practices and alternative entry routes such as apprenticeships or short training programmes.
Skills-first approaches should extend beyond hiring and be embedded across talent management, including goal setting, performance reviews, career development and training. Skills frameworks and proficiency levels can support clearer career pathways and performance assessment, while digital platforms and AI help identify skill gaps and target training.
Public authorities can support wider adoption of skills-first hiring and talent management, with particular attention to SMEs. Options include developing skills-focused occupational standards and progression pathways (e.g. Austria and Japan), supporting skills assessment (e.g. France), providing practical implementation toolkits (e.g. the United States), and leading by example through public-sector practice (e.g. the United Kingdom).
Work experience and university degrees continue to serve as the primary proxies for assessing individuals’ skills in recruitment. According to the World Economic Forum’s data from 2024, based on responses from over 1 000 companies across 55 economies, around 80% of surveyed employers expect to prioritise work experience when hiring between 2025 and 2030, while over 40% anticipate relying on university degrees (Figure 4.1). At the same time, recruitment practices are gradually diversifying: around half of employers plan to use pre‑employment tests, and one‑third intend to apply psychometric profiling, reflecting a growing interest in demonstrated skills and personal attributes. Other methods, including the completion of apprenticeships, short courses and online certificates, are also emerging.
Share of employers surveyed which will prioritise the following ways to assess skills when hiring, 2025-2030
Note: Data are based on responses from over 1 000 employers across 55 economies.
Source: World Economic Forum (2025[1]), The Future of Jobs Report 2025: Data Explorer, https://www.weforum.org/publications/the-future-of-jobs-report-2025/data-explorer-foj25/.
This continued reliance on work experience and university degrees reflects two underlying challenges. First, assessing skills in a reliable and scalable way remains difficult. Second, cultural resistance and unconscious biases reinforce established hiring practices.
Skill assessment remains a major obstacle for employers considering adopting skills-first approaches. A 2021 McKinsey survey of around 300 small and medium-sized firms in the United States found that validating skills, competencies and references represented the most significant hiring challenge, with nearly half of respondents identifying it as a key concern (McKinsey & Company, 2022[2]). Similarly, a 2023 survey of 1 500 employers reported that most respondents considered the validation of hard and soft skills to be the most difficult aspect of their hiring process (66% and 57% respectively) (TestGorilla, 2023[3]).
Cultural resistance and unconscious biases further complicate progress. A study by the SUSS-IAL identifies cultural resistance as one of five structural inefficiencies that uphold the prominence of credentials and hinder transitions towards skills-first practices. Degrees often serve not only as indicators of technical competence but also as symbols of identity, aspiration and legitimacy in professional contexts (Gog, Sung and Sigelman, 2025[4]). Unconscious biases also shape hiring decisions, as employers tend to favour candidates who resemble themselves in terms of gender, race, experiences, leisure interests and self-presentation styles (Rivera, 2012[5]). In mature organisations with established norms about what a typical employee looks like, such tendencies can amplify the signalling value of prior experience and academic qualifications.
Despite their widespread use, prior work experience and years of education are increasingly recognised as weak predictors of job performance. Drawing on a meta‑analysis, Schmidt and Hunter (1998[6]) reported that general cognitive ability tests and work sample tests had the highest mean validity for predicting job performance across 19 recruitment methods, whereas years of experience in a similar role and years of education showed substantially lower predictive power. A more recent meta‑analysis of 81 study samples also concluded that pre‑hire work experience is generally a poor predictor of future performance (Van Iddekinge et al., 2019[7]).
One reason may be that work experience and education serve only as indirect proxies for the skills acquired through those experiences. More detailed information on individuals’ skills could help fill this knowledge gap. For example, Dokko, Wilk and Rothbard (2009[8]) found that task-relevant knowledge and skills – as opposed to organisation-specific knowledge – can mediate the relationship between prior experience and job performance. This suggests that much work experience is highly organisation-specific and does not necessarily translate into improved performance unless it fosters knowledge and skills linked to job tasks. The same applies to formal qualifications. As discussed in Chapter 1, information on specific skills offers a more granular understanding of what degree holders actually know and can do.
An overreliance on prior experience and formal qualifications can also shrink the available talent pool. It disadvantages young adults with limited work experience, people returning after career breaks for family or health reasons, international talent whose qualifications may not be formally recognised, and candidates without degrees. According to Generation, a global non-profit network, more than 90% of employers in 2023 required prior work experience for entry-level roles involving technology-related tasks, which can exclude candidates with the right skills but no formal employment history and further constrain hiring in occupations that already face skills shortages (Generation, 2023[9]).
Skills-first talent recognition reflects a broader shift in employers’ mindsets and practices and typically unfolds in four steps (Figure 4.2). First, organisations identify priority roles and engage relevant internal and external stakeholders. Second, they update job descriptions to specify the skills required to perform each role. Third, they adapt hiring processes to assess and select candidates based on demonstrated skills, while promoting fairness and inclusion. Finally, skills-first principles extend beyond recruitment into wider talent management, including performance assessment and the design of personalised skills development pathways.
Source: Authors’ elaboration.
Evidence on how to implement skills-first hiring effectively remains limited and is largely anecdotal. However, early experiences suggest that organisations can start small while maintaining a clear strategic direction (OECD, 2024[10]). For example, employers may pilot skills-first approaches for a limited set of roles, while engaging a wide range of stakeholders from the outset. This supports experimentation, enables shared learning, builds a common understanding of the approach, and strengthens commitment across the organisation.
Target roles for pilot initiatives can be determined in different ways. One approach is to conduct a comprehensive review of all job descriptions to identify positions where core skills can be developed through non-formal and informal learning, including roles for which skill requirements are evolving faster than formal curricula can adapt. IBM, for example, gradually introduced skills-first practices for its “new-collar” jobs. These roles demand specialised technical skills but do not necessarily require a four‑year degree, and they include positions such as cybersecurity analysts, application developers and cloud computing specialists (IBM, 2026[11]).
Organisations with more limited resources may prefer a more targeted strategy. One option is to focus initially on occupations facing the most severe labour shortage. According to the OECD Skills for Jobs Database, shortage occupation groups in countries with available data include health professionals, teaching professionals, legal, social and cultural professionals, sales workers, and information and communications technology professionals (OECD, n.d.[12]). In Europe, high-skilled shortage occupations encompass a range of technical roles, such as engineers, engineering technicians, software developers, applications programmers, and systems administrators (Table 4.1).
Occupations at the ISCO 4‑digit level identified as being in shortage in at least 13 European countries, 2024
Note: The data include occupations in major groups 1 (managers), 2 (professionals), and 3 (associate professionals) of the International Standard Classification of Occupations (ISCO), which typically refer to jobs requiring a high level of education (Cedefop, 2026[13]). The dataset covers 29 countries, namely the 27 EU Member States, Norway, and Switzerland.
Source: European Employment Services (2025[14]), Labour shortages and surpluses in Europe, https://eures.europa.eu/living-and-working/labour-shortages-and-surpluses-europe_en.
It is important to recognise that skills-first approaches are not a one‑size‑fits-all solution (European Commission, 2024[15]). Their suitability varies between roles and industries. For instance, although shortage occupations include roles in regulated sectors, such as health and education, most occupations in these fields legally require specific qualifications or licences, typically linked to formal education pathways. In such cases, the scope for applying skills-first approaches is more limited.
Nonetheless, the broader principle of treating skills as a core currency remains relevant even in regulated or highly specialised occupations. A stronger focus on skills can support their transferability between countries with different regulatory requirements and between jobs. This is increasingly becoming a political priority, as reflected in initiatives such as the EU’s Skills Portability Initiative (see Box 2.2).
Another method for identifying suitable roles for skills-first hiring, proposed by the Burning Glass Institute and Harvard Business School, is to prioritise occupations where there is a substantial mismatch between the qualifications employers request and those held by the current workforce. The authors argue that, in such cases, the degree requirement is likely to be a matter of preference rather than necessity. Examples based on their analysis, which primarily focuses on the United States, include construction managers, web developers, distribution managers, production and planning clerks, computer programmers, and event planners (Sigelman, Fuller and Martin, 2024[16]).
A practical starting point is also to focus on entry-level roles or positions within human resources departments, where there may be greater openness to experimenting with new recruitment practices. These roles can help build internal momentum and demonstrate early results. It may also be easier to redesign job descriptions for roles where specific technical skills – rather than broader non-tangible skills – are the primary requirements. Another possible approach is to begin with teams and managers who are particularly receptive to piloting new methods.
Engaging a wide range of internal stakeholders from the outset is another critical component of successful implementation, with senior and executive leaders playing a pivotal role. The World Economic Forum identifies organisational culture and resistance to change as among the most frequently cited barriers to organisational transformation. On average across OECD countries with available data, two in five employers expect these factors to hinder transformation, rising to over half in some countries, including Slovenia and Austria (Figure 4.3). Senior and executive leaders can help make the skills-first agenda mainstream by setting strategic direction, allocating resources, driving shifts in organisational culture and scaling up effective practices.
Human resource professionals are equally important, as they ensure consistent use of skills taxonomies at the organisational level, explore different options for skills assessments and embed skills-first approaches in hiring, performance management and skills development. Hiring and line managers are at the centre of the process. They review and redesign job descriptions to focus on required skills, select appropriate assessment methods and apply skills-based perspectives in performance evaluations. Technology teams may contribute by developing the digital infrastructure that supports skills-first practices. Other relevant internal stakeholders include communications teams, which help employees understand new processes, and diversity, equity and inclusion teams, which identify underrepresented groups and promote fair outreach.
In addition to internal actors, several external stakeholders could support the adoption of skills-first practices. Employer associations can encourage the use of consistent skills taxonomies within and across industries and help disseminate good practices. Trade unions can ensure that skills-first approaches contribute to improving working conditions and job satisfaction and can explore how these approaches may be incorporated into collective agreements. Career guidance professionals and recruiters also play a key role, as they often serve as intermediaries between employers and jobseekers. Where firms collaborate with training providers, these partners can help align their programmes with organisational needs. For roles that require mandatory qualifications or licences, employers may also consult credentialling bodies to clarify the skills underlying these requirements.
Share of employers surveyed expecting organisational culture and resistance to change will hinder their organisational transformation, 2025-2030
Note: OECD countries with available data and Singapore are shown.
Source: World Economic Forum (2025[1]), The Future of Jobs Report 2025: Data Explorer, https://www.weforum.org/publications/the-future-of-jobs-report-2025/data-explorer-foj25/.
Once priority roles have been identified and relevant stakeholders engaged, the next step is to translate these roles into clearly defined skill requirements. Skills-first hiring is often narrowly interpreted as removing degree requirements. In fact, it reflects a broader shift whereby candidates are assessed on the basis of the skills they can demonstrate, regardless of whether these were acquired through formal, non-formal or informal learning. Clear and explicit definitions of required skills are therefore essential and should appear directly in job postings.
In defining skill requirements, employers can draw on existing resources such as skills taxonomies, occupational standards, and skills assessment and anticipation data developed by public authorities or social partners (see Chapter 2). Flanders’s Competent, for example, provides detailed descriptions of essential and optional skills for different professions, including relevant soft and digital skills. Each skill is further specified through behavioural indicators and associated knowledge requirements. The database is kept up to date through inputs from social partners and users, complemented by AI-enabled information processing (VDAB, 2025[17]). Employers can use such resources as a starting point and adapt them to the specific requirements of individual vacancies. In Austria, the Public Employment Service supports employers in tailoring skills-oriented occupational standards to job postings (Austrian Public Employment Service, 2025[18]). In some cases, employers also collaborate to co-create shared skill profiles for specific roles. In the United States, for example, ten large firms have joined forces to develop standardised skill profiles for 30 selected job roles (Box 4.1).
Many employers already reference skills in job postings. An analysis of online job advertisements published between 2012 and 2019 across six English-speaking countries (Australia, Canada, New Zealand, Singapore, the United Kingdom and the United States) found that around 90% include some form of skill-related keyword (OECD, 2022[19]).
In 2024, the Burning Glass Institute and Walmart launched the Skills-First Workforce Initiative, bringing together ten large firms in the United States, including Bank of America, Microsoft and Walmart, to co-create skills-first job profiles. Drawing on labour market intelligence, the working group identified key skills for 30 roles that collectively represent around one‑quarter of the private‑sector workforce, ranging from truck drivers and cashiers to cybersecurity analysts and project managers*. These job skill profiles are published on a publicly available online portal.
For each role, key skills are grouped into four categories. For example, for human resources specialists, around 20 skills are identified across: core role‑specific skills (such as payroll processing), baseline applied skills (such as Microsoft Excel), foundational and leadership skills (such as problem solving), and specialisation skills (such as labour law) (Table 4.2). The portal also provides labour market insights for each skill, including its frequency of demand, role specificity, projected five‑year growth, and associated wage premiums. Each skill is further described using three proficiency levels – basic, intermediate, and advanced – with clear behavioural indicators.
As a next step, the initiative aims to promote the use of these shared skills profiles through the Skills-First Implementation Fellowship. The fellowship provides grants to employer coalitions, education networks and similar organisations to integrate the skills data into key infrastructure, including career navigation and job-posting workflows, learning platforms, and employer or workforce data systems. In parallel, efforts are underway to support regional adaptation through collaboration with local organisations.
Note: *The 30 job roles for which skills are defined are as follows: Assemblers and fabricators; cashiers; customer service managers; customer service representatives; cybersecurity analysts; data scientists; financial analysts; financial managers; human resources specialists; industrial machinery mechanics; inspectors, testers, and samplers; labourers and material movers; maintenance and repair workers; packers and packagers; product managers; production and expediting clerks; project management specialists; purchasing agents; receptionists and information clerks; retail salespersons; retail supervisors; sales managers; sales representatives; security guards; shipping and receiving clerks; software developers; stockers and order fillers; transportation supervisors; truck drivers; warehouse managers.
Source: The Burning Glass Institute (2026[20]), Skills-First Workforce Initiative, https://www.skills-first.org/.
Some companies go further by highlighting skills at the forefront of job postings or placing greater emphasis on skills than on formal qualifications or past experience. For example, a vacancy for a Customer Solutions Engineer posted on Google’s career webpage in November 2025 lists a range of technical skills as minimum requirements, including writing and debugging code in general-purpose programming languages (such as Java, C, C++, Python, Shell, Go or JavaScript), computer networking and web technologies (such as HTTP, HTML and DNS) and virtualisation and orchestration frameworks. While the posting mentions a bachelor’s degree requirement, it also states that equivalent practical experience is acceptable (Google, n.d.[21]). AXA XL, a subsidiary of AXA, provides another example of a job vacancy that clearly articulates required skills (Box 4.2).
AXA XL, the property, casualty and speciality risk division of the French multinational insurance corporation AXA, employs around 7 500 staff and is currently piloting skills-based hiring. The company has reviewed all job roles, identified the skills required for each, and begun incorporating these skills into postings for selected hard-to-fill positions. For example, the job description for an Operations Analyst sets out requirements based on specific skills. It does not mandate a formal degree, and relevant experience is described as desirable but not essential (Table 4.3).
Note: Information extracted on 20 November 2025.
Source: AXA (2025[22]), Careers AXA, https://careers.axa.com/careers-home.
Methods to select candidates on the basis of demonstrated skills can take multiple forms, including structured assessments and competency-based interviews. On average across OECD countries with available data, nearly half of surveyed employers expect to use pre‑employment tests to assess skills in hiring between 2025 and 2030 (Figure 4.4). Around one‑third also report plans to use psychometric profiling, including tools such as the Big Five personality traits test and logical reasoning tests (World Economic Forum, 2025[1]). Employers may develop their own selection methods or collaborate with specialised firms that design and administer skill assessments.
While ideally all candidates should have opportunities to demonstrate their skills, many recruitment processes begin with screening. This stage is increasingly supported by algorithmic tools, which can help reduce certain forms of human bias but can also reproduce or amplify bias depending on how they are designed, trained and used (Milanez, Lemmens and Ruggiu, 2025[23]). Whether screening is conducted by humans or algorithms, one practical step is to define, before reviewing CVs, the types of experience and learning pathways that can build the skills sought but may be missed in rapid screening. For example, a manager hiring an event co‑ordinator could look beyond conventional job titles and recognise experience in hospitality or managing large groups, such as waiting tables, military service or student teaching, as evidence of organisational and interpersonal skills (United States Department of Labor, 2024[24]).
Share of employers surveyed which will prioritise the use of pre‑employment tests to assess skills when hiring, 2025-2030
Note: OECD countries with available data and Singapore are shown.
Source: World Economic Forum (2025[1]), The Future of Jobs Report 2025: Data Explorer, https://www.weforum.org/publications/the-future-of-jobs-report-2025/data-explorer-foj25/.
Among the different types of skills assessments, online assessments are among the most widely used, in part because they can be administered at scale and enable employers to assess large numbers of candidates efficiently. For example, the United Kingdom-based company SHL offers a range of assessments to support employers seeking talent. Its cognitive assessments measure candidates’ numerical skills, problem-solving and critical reasoning capabilities. Its behavioural assessments evaluate alignment with workplace expectations through scenario-based exercises that simulate job contexts. Its personality assessments aim to measure candidates’ preferences, motivations and capacity to work effectively in remote settings (SHL, 2026[25]). Similarly, HackerRank, a technology firm based in the United States, offers coding assessments that measure more than 250 technology-related skills using real-world tasks such as debugging. The platform also includes AI-enabled features that help employers evaluate how effectively candidates can use AI (HackerRank, 2026[26]). In addition, some public institutions, such as France’s public employment service, support employers in implementing skill assessments (Box 4.3).
Skill assessments are increasingly leveraging leading-edge technologies. For instance, Accenture has replaced traditional written case studies in its early talent recruitment process with virtual reality simulations that recreate challenges employees may encounter in their roles. One such assessment, known as “the Project Room”, places candidates in a virtual environment where project-related information is presented across Gantt charts, pie charts, tables, and data. Candidates are required to identify and extract relevant information, manage project tasks, and communicate their plans to others (Accenture, 2023[27]).
In 1995, France’s public employment service introduced the simulation-based recruitment method (Méthode de Recrutement par Simulation, MRS), often described as “recruitment without a CV”. France Travail recommends MRS for large‑scale hiring and for vacancies that are difficult to fill. The method has been applied across a wide range of occupations, including aircraft assemblers, ambulance attendants, caregivers, garden machinery technicians and production operators.
Once France Travail and an employer agree to use MRS, they jointly identify the technical and soft skills required for the position and develop practical assessment tests tailored to job-specific tasks. A specialised team supports employers throughout the implementation process. For example, for a position as a professional delivery driver, candidates may be asked to sort cubes and other coloured objects into boxes. This task is designed to assess their ability to organise a delivery van and retrieve the correct parcels efficiently and without error. Candidates who demonstrate the required skills through these tests are then invited to interviews.
Source: France Travail (2026[28]), La méthode de recrutement par simulation (MRS), https://www.francetravail.fr/employeur/vos-recrutements/selectionnez-des-candidats/la-methode-de-recrutement-par-si.html.
Competency-based interviews are another commonly used method for assessing candidates’ skills. These interviews typically combine technical questions (for example, asking candidates to develop an online campaign plan for a digital-marketing role) with behavioural and situational questions (such as inviting candidates to describe a time when they worked closely with a colleague whose working style differed significantly from their own) (Adecco, 2024[29]).
Skills-first hiring is often presented as a new concept, but many of its core assessment methods, such as cognitive skills tests and competency-based interviews, have long been used in recruitment. In this sense, it is not so much an entirely new practice as a reframing that places skills at the centre of selection decisions, relative to other criteria. At the same time, advances in technology are enabling new ways to assess candidates’ skills, broadening the scope and scalability of skills-focused evaluation and increasing the potential of skills-first talent management.
Available evidence suggests that removing formal qualification requirements alone does not necessarily broaden access to jobs for groups that are under-represented in certain occupations and in the workforce more broadly, including women, younger and older workers, and ethnic minorities. As mentioned above, a study by the Burning Glass Institute and Harvard Business School shows that, between 2014 and 2023, the annual number of roles in which employers dropped degree requirements rose fourfold. While this marks progress towards a more skills-first labour market, fewer than 4% of these newly degree‑free job postings resulted in the hiring of non-degree candidates. Among the firms analysed, just over one‑third made a substantive change by increasing their recruitment of non-degree holders, while the remaining two‑thirds continued to hire the same (or an even greater) share of university graduates, despite removing degree requirements (Sigelman, Fuller and Martin, 2024[16]). A more recent study similarly finds that companies that removed degree requirements from job postings saw only a two p.p. increase in the share of hires with non-degree credentials (Rao, Weathers and Martin, 2026[30]).
If employers want to broaden opportunities for underrepresented groups, they will need to make additional, intentional efforts. Skills-first approaches are not intended to devalue formal education, and selecting candidates with degrees based on their demonstrated skills remains both reasonable and fair. However, if employers are seeking to diversify their talent pipelines, they may need to take deliberate action, such as addressing unconscious bias in selection processes and creating alternative pathways that support candidates from underrepresented groups.
To foster more inclusive skills-first hiring, reducing unconscious bias in recruitment processes is crucial. Blind recruitment – which involves removing identifying information such as names, photographs, gender, age or educational institution during screening and interviews – is one example. Several studies report that blind recruitment can increase the likelihood that non-traditional candidates progress through selection stages and are ultimately hired, although some evidence also points to potential limitations in its effectiveness for workforce diversification (Fath, 2023[31]). Other research shows that anonymised processes can encourage applications from counter-stereotypical candidates, such as women and individuals aged over 45 applying for technical roles (Boring et al., 2025[32]). The City of Helsinki, the largest employer in Finland, piloted anonymous screening for 13 selected job roles in 2020 and found that applicants with an immigrant background were more likely to be invited to interview and subsequently hired. The pilot also showed no significant differences in wages or turnover between anonymised and traditionally recruited hires, while anonymisation increased the overall number of applicants, particularly among women (Kanninen, Kiviholma and Virkola, 2023[33]).
Another strategy for widening talent pools is to establish alternative entry routes for specific groups. For example, some companies offer apprenticeships and short training programmes to candidates from underrepresented backgrounds so they can demonstrate their skills. According to 2024 data from the World Economic Forum, about 15% of surveyed employers plan to use the completion of apprenticeships, short courses or online certificates as indicators of skills when hiring between 2025 and 2030 (Figure 4.1).
Indeed, apprenticeships are increasingly recognised as an effective tool for promoting inclusive hiring. For example, Eli Lilly, an American multinational pharmaceutical company, offers several apprenticeship pathways that combine formal training with paid, on-the‑job learning and are tailored to different target groups. Its Professional Apprenticeship Programme is a 13‑month scheme spanning multiple functions, including human resources, marketing, and research and development. Lilly also offers a Technical Pathway Programme, lasting up to 24 months, which focuses on IT roles such as data operations, service management, analytics, and automation. Both programmes target adults without a four‑year degree and provide a structured pathway for career transition and progression, including consideration for full-time positions at Lilly upon successful completion. In addition, a Craft Apprenticeship Programme is available for recent high school graduates (Lilly, 2026[34]).
Short courses can also provide alternative pathways into specific occupations. Micro-credentials, for instance, help individuals develop in-demand skills and signal them effectively to employers (see Chapter 3). While such programmes tend to disproportionately benefit learners from more advantaged backgrounds, there are examples where, when carefully designed with specific target groups in mind, they have enabled underrepresented learners to demonstrate their capabilities more quickly than formal education pathways allow (OECD, 2023[35]). Merit America, a non-profit organisation, provides an illustrative example. It supports learners from underserved communities to enrol in and complete industry-recognised certificates in high-demand skills, such as Google Career Certificates. Training is available in fields including cybersecurity, data analytics, IT support, project management, semiconductor technologies, supply chain management and user experience design. Programmes are offered on a part-time basis, either online or in a hybrid format, and typically last four to five months. Learners enrol at no upfront cost and repay a zero‑interest loan only if they secure employment with annual earnings of at least USD 40 000. Participants also receive wraparound support, including coaching, AI-enabled job search assistance and financial support for living costs during training. Merit America reports that, on average, alumni increase their annual earnings from around USD 28 000 to USD 49 000 upon completion of the programme (Merit America, 2026[36]). In England, government-run Skills Bootcamps provide another example of short, targeted training that can support entry into new occupations. These are free, flexible courses of up to 16 weeks for adults aged 19 and over, focused on high-demand skills such as digital, green, and health and social care. Learners who complete the training are guaranteed a job interview (United Kingdom Department for Education, n.d.[37]).
Skills-first approaches extend beyond hiring to encompass goal setting, performance management and continuous training. Skills-focused job descriptions help individuals plan their skill development and enable employers to assess performance based on demonstrated skills, rather than years of service. Identified skill needs can also inform the design and targeting of relevant training opportunities.
Available evidence suggests that many countries are still progressing towards rewarding skills through remuneration. Analysis of PIAAC data indicates that stronger information-processing skills are positively associated with higher wages: median earners with higher skill levels earn around USD 30 per hour on average, compared with around USD 20 per hour among those with lower skill levels (OECD, 2024[38]). However, across OECD countries with available data, the wage premium associated with skills is generally more modest than that associated with educational attainment, with the exception of France and Japan (Figure 4.5). On average, a one standard deviation increase in years of education is associated with a 16% increase in wages, while a one standard deviation increase in numeracy proficiency is associated with a 9% increase in wages.
Note: Estimates are based on individual-level PIAAC data. For each country, a regression model is estimated in which log hourly wages are regressed on two core variables: numeracy proficiency (measured through PIAAC’s direct skills assessment) and years of education. The model also controls for gender, migrant background, partnership status, having children and years of work experience. The indicator shown in the figure is the ratio of these two marginal effects (i.e. the estimated return to skills relative to the estimated return to education). Higher values indicate that skills are rewarded more strongly (through higher wages) relative to years of formal education.
OECD countries with available data and Singapore are shown.
Source: OECD/SUSS-IAL (2025[39]), Skills-First Readiness and Adoption Index, https://www.oecd.org/en/data/dashboards/skills-first-readiness-and-adoption-index.html.
Existing skills frameworks can support the design of skill-based career development plans. In Japan, for example, career development frameworks have been established for selected occupations, defining proficiency levels for the key skills required in these roles (Box 4.4). These frameworks can be used to support career planning and to assess performance in a more structured and transparent way.
Japan has introduced initiatives to standardise career progression pathways in selected professions. One example is the Skill Standards for IT Professionals (IT Skill Hyojun, ITSS), first developed in 2002, by the Ministry of Economy, Trade and Industry in consultation with industry representatives. The framework defines proficiency levels for the skills required across 11 occupation groups and 35 specialisations, including marketing, sales, IT specialists, software development and customer service.
In marketing, for instance, the occupation is divided into three specialisation areas: marketing channel strategy, marketing management and market communication. For a marketing role specialising in marketing channel strategy, around ten core skills are identified as particularly relevant, including opportunity assessment and selection, marketing strategy, sales channel strategy, compliance, project management and communication leadership. For each of these skills, proficiency is specified across multiple levels, thereby outlining a structured pathway for skills development and career progression (Table 4.4).
Beyond skill-level specifications, ITSS also provides an overarching career development framework. Careers for IT professionals are defined across seven levels, ranging from entry level (Level 1), through intermediate level (Levels 2 to 3) and high level (Levels 4 to 5), to mastery level (Levels 6 to 7). A range of national qualifications obtained through the Japan Information Technology Engineers Examination are mapped to Levels 1 to 4*. Individuals can take examinations up to Level 3 without prior work experience, while examinations aligned with Level 4 require relevant professional experience. In this way, ITSS, in combination with national qualifications, supports individuals seeking to enter the IT sector by helping them assess their skills and identify potential career pathways. There is no standardised national examination for Level 5 and above, and local assessments for those levels are based on professional experience.
Another example is the Career Level Classification System for Care Professionals (Kaigo Professional Career Dan-i Seido), developed by the Cabinet Office in 2012 and currently managed by the Ministry of Health, Labour and Welfare. This framework also classifies careers across seven levels, providing a structured reference for progression in the care sector.
Note: *There is no standardised national examination for Level 5 and above; assessment at these levels is typically conducted locally and is based primarily on professional experience.
Source: Elderly Service Providers Association (n.d.[40]) and Information-technology Promotion Agency (2026[41]).
Many firms are also leveraging digital technologies to manage their workforce through a skills-first lens. Deutsche Telekom, for instance, has developed more than 500 role profiles by combining internal expertise with external AI-based skill forecasts. Its skills and career management platform, the Growth Hub, personalises training plans to address skill gaps identified through annual self-assessments and manager validation (Ulbrich, 2025[42]). Coca-Cola Europacific Partners, the largest independent Coca-Cola bottling company, provides another example. The company have partnered with Eightfold, an AI-powered talent intelligence system, to launch their Career Hub, often described as an “internal LinkedIn”. The platform enables employees to document their career journeys, plan skills development, expand professional networks and explore internal mobility opportunities. Managers can use it to identify potential internal candidates for recruitment, with both employees and managers supported by AI-driven recommendations. Combined with the company’s skills framework, which maps three to five key skills to each role, this system enables skills-based talent management. As a result, more than half of permanent roles within the company are currently filled through internal mobility (Coca-Cola Europacific Partners, 2023[43]). Similarly, Unilever’s U-Work internal talent marketplace enables employees to move flexibly between projects and tasks (Chapter 1).
Overall, skills-first approaches to talent management offer benefits to both employees and employers. Employees gain clearer visibility over career pathways and a more targeted understanding of their skills development needs, while employers are better equipped to identify firm-level skill gaps and opportunities for skill transfer across roles.
Public authorities can play a pivotal role in accelerating the adoption of skills-first hiring and talent management at the national level, particularly among small and medium enterprises (Figure 4.6). Governments can spearhead the development of skills-focused occupational standards (Chapter 2) and clearer progression pathways (Box 4.4), helping to anchor employer practices in a shared skills framework. Public employment services contribute by supporting firms to identify candidates with the relevant expertise through skills assessment tools (Box 4.3) and targeted career guidance (Chapter 5). The development of practical implementation toolkits can further lower entry barriers for businesses seeking to adopt skills-first approaches. Governments can also lead by example, embedding skills-first recruitment and talent management within the public sector and creating platforms for peer learning that enable employers to exchange resources and effective practices. Finally, public funding can provide strong incentives for firms to pilot and scale skills-first approaches.
Providing a clear roadmap for implementing skills-first approaches helps firms understand the operational steps and the resource implications involved. For example, in 2024, the United States Department of Labor, in collaboration with the Department of Commerce and social partners, published the Skills-First Starter Kit. The guide sets out practical steps, from identifying the skills required for a role to assessment, recruitment and onboarding. It includes sample evaluation rubrics, references to existing tools and illustrative case studies of employer practice (United States Department of Labor, 2024[24]).
Governments can also demonstrate what works by adopting skills-first recruitment and talent management in the public sector, although feasibility varies between countries. In the United States, a growing number of states have reformed degree requirements in public employment (Chapter 1). The United Kingdom’s Department for Work and Pensions offers multiple entry routes, including apprenticeships that combine permanent civil service contracts with structured training. Recruitment materials explicitly encourage applications from underrepresented groups, including people from ethnic minority backgrounds (DWP Digital, n.d.[44]). However, in some countries, statutory qualification requirements constrain experimentation in public employment.
Source: Authors’ elaboration.
Governments can further promote skills-first approaches by facilitating dialogue and peer exchange among stakeholders. Mechanisms include tripartite agreements, councils and committees, and the establishment of dedicated organisations (Chapter 5). The EU-US Talent for Growth Task Force is an example of international dialogue. Established between 2023 and 2024, it was led by public officials and brought together employer and worker representatives, as well as training providers. It provided a forum to discuss skills-first hiring and micro-credentials (European Commission, n.d.[45]).
Finally, public funding can provide strong incentives for firms to pilot and scale skills-first approaches. Singapore, for example, offers the SkillsFuture Workforce Development Grant to support job redesign and workforce transformation. The grant covers 50% of eligible costs for businesses to receive expert guidance from pre‑approved consultants, build internal capability, and adopt technology tools, up to SGD 150 000 (around USD 120 000). Support increases to 70% for SMEs (Government of Singapore, 2026[46]).
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