A skills-first approach prioritises skills over credentials, offering both opportunities and challenges for stakeholders. This chapter examines the benefits of broadening talent pools and improving job matching while addressing risks such as bias, weakened worker protections, and skills obsolescence. Public policy plays a crucial role in ensuring these practices remain fair, transparent, and effective. Key areas discussed include fostering a culture of skills-based hiring, strengthening human resource management (HRM) capabilities, expanding skills intelligence, and ensuring quality training systems. Governments, as major employers, can lead by example in refining hiring and workforce development. The chapter draws on international policy examples and employer-led initiatives to provide insights for policymakers and businesses navigating this transition.
Empowering the Workforce in the Context of a Skills-First Approach
Abstract
Traditional hiring practices that rely on formal qualifications or prior job titles as proxies for skills may overlook individuals’ full skills and potential for growth. This can create barriers to employment, limiting opportunities for job seekers while also constraining workforce adaptability and exacerbating skills shortages for employers (see Chapter 1). A skills-first approach offers a more dynamic alternative by emphasising validated skills over credentials, expanding access to job opportunities, fostering a more agile workforce, and strengthening economic resilience.
While the shift to skills-first hiring is gaining traction across various industries, its adoption has been uneven, with employers, individuals, and other stakeholders facing challenges in implementation. See Chapter 2 for an in-depth look at the uptake of skills signalling practices by individuals, driven by individuals’ changing learning preferences, skills demand in the labour market, and employers’ needs.
A skills-first approach presents both opportunities and risks. On the one hand, it can help mitigate labour shortages, promote workforce diversity, and support lifelong learning. For instance, equivalency-based criteria in job vacancies allow employers to identify candidates skilled through alternative routes who may possess the necessary competencies but lack formal credentials to signal their skills. On the other hand, the transition to skills-first hiring may introduce new forms of bias, create risks of skills obsolescence, and weaken worker protections. The systems and tools used to assess skills and determine their value in the labour market could replicate existing biases or introduce new ones, while also disrupting established frameworks for job classification and employment standards.
Given the opportunities and challenges presented by skills-first practices, policymakers have a critical role in shaping this transition (see Chapter 1). Regulations, guidelines, and targeted policy initiatives may be needed to ensure that these practices enhance labour market outcomes while safeguarding workers’ rights. At the same time, understanding the approaches adopted by employers and other stakeholders can help policymakers design initiatives that promote skills-first practices among those who could benefit from them. Given that hiring and human resource management (HRM) processes often function as a “black box” within companies, this chapter provides insights into how skills-first strategies are being implemented across a range of industries.
The chapter begins by examining the potential benefits of a skills-first approach, including its ability to broaden talent pools and improve labour market access. It then explores the risks associated with this shift, such as the introduction of new biases, increased skills obsolescence, weakened worker protections, and the potential erosion of professional standards. Following this, the chapter discusses the role of public policies in realising the benefits of skills-first hiring while addressing associated risks. This includes creating regulatory conditions that facilitate its adoption, supporting employers, promoting effective skills signalling, and ensuring the quality of skills development and validation mechanisms. The chapter draws on high-level strategies implemented by governments and private-sector organisations across OECD countries, offering insights into specific policy actions and employer-led practices that can inform the promotion and implementation of skills-first practices on a broader scale. The findings presented in this chapter are based on surveys, interviews, and consultations conducted with a diverse range of stakeholders throughout this project.
Box 3.1 provides an overview of the stakeholders who contributed their expertise and experiences.
This chapter presents high-level insights as well as organisation-level practices relevant to the design and implementation of a skills-first approach. This information was gathered through surveys, interviews, and consultations with a range of relevant stakeholders throughout the duration of this project (September 2023 – March 2025). Insights from stakeholders, complemented by findings from a thorough review of the literature and the analysis of novel data, provide a comprehensive understanding of the challenges and opportunities associated with a skills-first approach. The stakeholders consulted included:
Local leaders: A workshop was held in Berlin, Germany, in October 2024 to gather insights from local policymakers, public servants, HR leaders, labour market experts, training providers, and non-governmental organisation (NGO) representatives. Participants shared their experiences with and views on skills-first practices. Forty stakeholders participated in various thematic sessions throughout the day.
Employers: During January and March of 2025, interviews were conducted with employers and social partners based in the United States and Europe, many of whom also operate internationally. Senior leadership figures, recruiters, and HRM specialists contributed insights about their experience with skills-first practices within their organisations. Nine employers and industry associations participated in in-depth interviews, operating in sectors such as manufacturing, data and analytics, healthcare, food production, software, and entertainment. All employers consulted have either instituted a skills-first approach at an organisation-level, implemented select practices or are interested in making their hiring and HRM practices more skills-first.
Trade union representatives: Representatives from the Trade Union Advisory Committee to the OECD (TUAC) provided valuable input on issues concerning the accessibility, effectiveness and potential risks related to some skills-first practices during the TUAC Working Group on Education and Skills in October 2024. This group includes leaders and members of prominent trade unions from across the OECD.
Government representatives: Government representatives were identified and consulted through their participation in the OECD Education Policy Committee (EDPC), Skills Advisory Group (SAG) and Employment, Labour and Social Affairs Committee (ELSAC); these groups provided valuable comments and information regarding the prevalence and experiences of skills-first practices within OECD member countries across the public and private sectors.
A skills-first approach can broaden the talent pool for employers experiencing skills shortages and improve access to jobs for individuals who have historically experienced barriers to achieving positive labour market outcomes. Improved job-candidate matching in the labour market is in the interest of and benefits all stakeholders, including policymakers, education providers and social partners who work directly with individuals and employers in many different capacities. At the same time, there are risks associated with the adoption of a skills-first approach, including the introduction of new biases, diminishing future-readiness of the workforce, weakening workforce protections and lowering professional standards. These risks pose challenges to stakeholders but are particularly pronounced for individuals in the labour force.
Skills-first practices in hiring and HRM are already being implemented across many industries and OECD countries, with varying levels of uptake amongst employers and individuals. Moreover, many stakeholders felt strongly that a skills-first approach is relevant within their areas of work, even if they may not have had as much prior knowledge and experience with it.
As a result of the uptake of skills-first practices as described in Chapter 2, as well as the interest in the approach expressed by stakeholders, policymakers should have a view of the opportunities and risks when regulating skills-first practices or designing support structures for their uptake. Policies and interventions should strive to maximise the opportunities conferred to all stakeholders while minimising the potential risks that may arise from poorly executed skills-first practices.
3.2.1. Broadening the talent pool and improving access to jobs
Skills-first practices can help employers broaden their talent pools and enable individuals to access opportunities which they were previously not able to (OECD, 2024[1]). By placing skills, as well as clear and open communication about them, at its core, a skills-first approach can lower the longstanding and systemic barriers to positive labour market outcomes experienced by many. Many employers believe that a skills-first approach can confer a range of benefits to their organisations, including making workplaces more agile, fostering a more diverse workforce, enhancing retention and engagement, making organisations future-ready, and strengthening business outcomes.
One of the skills-based hiring practices that has gained the most notoriety has been to remove degree requirements from job postings. Higher education qualifications are a prevalent screening tool across many occupations and industries (Boden and Nedeva, 2010[2]). In many hiring processes, degree requirements serve not only as a signal of the skills associated with the course or field of study, but also as a proxy for transversal skills associated with higher education (Economist Impact, 2023[3]), often having the effect of filtering out individuals who do not conform to traditional signalling methods (Demaria, 2020[4]). As a result, degree requirements can reduce the size of the candidate pool by excluding individuals who may not have formal qualifications but possess the necessary skills for the job (Blair et al., 2020[5]). By reducing reliance on degree requirements, employers can focus on individuals who have gained the necessary skills through alternative routes, regardless of their educational qualifications or prior work experience (DeMark, 2022[6]).
Stringent degree requirements can perpetuate biases that prevent certain groups of individuals from attending higher education institutions in the first place, namely, the cost. Across OECD countries, higher education represents the most expensive phase of an individual’s educational journey, with costs rising significantly in recent years (OECD, 2021[7]). For instance, in the United States, the average cost of tuition and fees at public four-year universities increased by over 30% between 2010 and 2020 (College Board, 2021[8]). Similarly, in the United Kingdom, average tuition fees rose by nearly 20% over the same period (OECD, 2021[7]). These rising costs make higher education unattainable for many, particularly individuals with low socio-economic status (SES) without access to public financing or financial aid. Individuals with low SES are also likely to face other costs or barriers to attendance, such as those of foregoing employment and delaying entry into the labour market. The skills-first approach enables individuals who have developed strong skills through non-traditional means – such as work experiences, self-learning or through acquiring microcredentials – to be considered for roles where they would be typically overlooked through degree-centric hiring practices (Blair et al., 2020[5]).
In most OECD countries, individuals with upper secondary education or less are more likely to highlight their skills compared to those with higher education degrees. See Chapter 2 for an in-depth discussion on the relationship between skills signalling and educational attainment. Both alternative and traditional routes are and will continue to be valued across labour markets; however, given the persistence of skills shortages, it is paramount to recognise that for some jobs which have traditionally required higher education qualifications, individuals skilled through alternative routes may in fact be equal or better candidates. A survey of 600 employers in the United States between 2016 and 2017 found that, for roles like supervisors, support specialists, and sales, requiring a degree not only extended the time it took to fill vacancies but also led to equal or worse performance and retention rates among degree-holders compared to non-degree holders. Respondents represented a wide range of industries, with healthcare and social assistance, manufacturing, and finance and insurance being the largest; mid-size (1 000‑10 000 employees) companies were the most represented, to the distribution of employers by size was fairly balanced (Fuller, 2017[9]). Removing degree requirements for such jobs could help employers reach and effectively exchange information about skills with groups which are underrepresented and may struggle to access opportunities.(Lara, 2025[10]).
Other traditional skills signals can pose similar challenges. Using skills-first criteria (i.e. identifying candidates who work in jobs with relevant and overlapping skills) displayed over nine times more eligible candidates than relying on job title alone (LinkedIn, 2023[11]). Just like degrees, job titles can fail to capture the full scope of an individual’s skills or experiences, as they can vary widely between industries and companies. Moreover, sociodemographic characteristics remain a key factor in securing highly sought-after job titles and transitioning between industries, even for individuals who possess higher and formal qualifications. For instance, many so-called “entry-level” jobs in software and IT services require over three years of experience (Anders, 2021[12]), limiting opportunities for those with low SES backgrounds who have fewer chances to participate in internships or gain work experience due to time and resource constraints (Sutton Trust, 2022[13]).
By shifting the focus to skills, recruiters can identify candidates who may not have held the exact job title but possess the transferable skills necessary to succeed in the role, many of whom face systematic exclusion from hiring processes (Acquisti and Fong, 2012[14]; Correa et al., 2019[15]). The inefficiencies in recruitment systems that filter out individuals without traditional career paths at early stages also discourage many individuals with low SES backgrounds from pursuing internal mobility opportunities and career transitions (World Economic Forum, 2023[16]). Such movements are inbuilt into many skills-first practices, alleviating the reliance on professional networks and the effort and resources that individuals need to expend to progress in their professional trajectories (Stephany and Teutloff, 2024[17]; Peña-Casas, 2004[18]; Liu, 2021[19]). SES is not the only determinant of individuals’ ability to access higher education and positive labour market outcomes (Zschirnt and Ruedin, 2016[20]; Mai, 2022[21]). Other systemic barriers limit the opportunities available to individuals as a result of their gender, age, migration status, or racial and ethnic background. Box 3.2 provides further details of the role of hiring bias in limiting opportunities for different groups.
Different forms of hiring bias are prevalent across OECD labour markets and workplaces. Prejudiced decision making and disregarding non-traditional skills signals are two forms of bias which limit opportunities available to different groups, and the skills-first approach may be well-suited to address this (see below):
Prejudiced decision making
One form of hiring bias concerns prejudiced decision making (i.e. making hiring and HRM decisions based on beliefs about individuals’ skills or ability to perform the job based on their sociodemographic characteristics), whether unconscious or deliberate, can stem from perceptions that certain group characteristics lead to suboptimal job performance or that they contribute to other issues in the workplace. This bias can be present in various stages of the recruitment process, including during the creation of job postings or using screening algorithms that inadvertently replicate existing human biases. In fact, bias can affect hiring decisions before anyone has a chance to apply; the choices of where and how to advertise a posting can influence who sees it and who has the opportunity to apply. Likewise, the underrepresentation of minority employees in management positions may curb their internal mobility opportunities in workplaces where relationships between managers and employees play a big part in performance evaluation and promotion pathways.
The potential for prejudiced decision-making extends to algorithmic or otherwise data-driven tools and processes; poor design can mean that they are inherently biased, while the ways through which human agents use and interpret their outputs can further inequities. Prejudiced decision-making on the part of managers, HRM, and senior management in the design of the process and in individual hiring or HRM decisions can be detrimental for everyone involved across measures of business efficiency and individuals’ labour market outcomes.
Disregarding non-traditional skills signals
Another form of hiring bias stems from employers disregarding non-traditional skills signals, either deliberately or because of the manner in which hiring and HRM processes are structured. Many individuals who are adequately skilled may miss out on opportunities because of mismatches in how they are communicating about their skills and employers’ expectations and recognition of different signals. For example, migrants or workers who reside in rural areas may have limited opportunities to access traditional educational pathways recognised within the labour market. This means that the ways through which they acquire and signal skills will differ from those of individuals who gained experience through more established channels. This means that employers will have to look beyond formal qualifications to gauge their suitability for the job.
Equally, even though individuals may hold qualifications which are highly sought after by employers, they may not signal them in the ways that employers expect. For example, even though more women hold higher education degrees, they are less likely to signal the full range of skills and experiences associated with the qualification. At the same time, women, particularly those from low SES and migrant backgrounds, may face more barriers in acquiring formal qualifications and experience a higher degree of skill-discounting.1 Research on the outcomes of skills-based hiring practices via LinkedIn suggests that relying on skills when hiring for AI roles could increase the share of women by up to 24% in certain tech and AI roles.
1. Skill-discounting is the term often used to describe when the knowledge, qualifications and experience of certain groups are assessed by employers as being less valuable than those of other groups, particularly if the former are a minority or are underrepresented in society or the specific sector of the labour market (Treuren, Manoharan and Vishnu, 2020[22]).
Source: Bonoli and Hinrichs (2010[23]), Statistical Discrimination and Employers’ Recruitment Practices for Low-Skilled Workers, www.oecd.org/els/47089328.pdf; Bogen (2019[24]), All the Ways Hiring Algorithms Can Introduce Bias, https://hbr.org/2019/05/all-the-ways-hiring-algorithms-can-introduce-bias; Boselli et al., (2023[25]), Midlife in a Changing and Post-Pandemic World. Implications for Career Education and Older Adult Learning Using On-Line and in Person Solutions, https://sciendo.com/article/10.2478/eras-2023-0005; Treuren, Manoharan and Vishnu (2020[22]), The gendered consequences of skill-discounting for migrants, https://journals.sagepub.com/doi/10.1177/0022185620951830; Heilman (2012[26]), Gender stereotypes and workplace bias, https://doi.org/10.1016/j.riob.2012.11.003; Lara (2025[10]), Skills-Based Hiring: Increasing Access to Opportunity, https://economicgraph.linkedin.com/content/dam/me/economicgraph/en-us/PDF/skills-based-hiring-march-2025.pdf; Milanez, Lemmens and Ruggiu (2025[27]), Algorithmic management in the workplace: New evidence from an OECD employer survey, https://doi.org/10.1787/287c13c4-en.
3.2.2. Potential risks inherent to a skills-first approach
A skills-first approach requires employers to ascribe value to individual skills, focus on employable skills, and implement rigorous skills assessments and evaluations, all of which could have negative effects if done without diligence. The design and implementation of these processes carry risks of introducing new forms of bias, diminishing future readiness, and weakening worker protections and occupational standards (see Figure 3.1).
While many stakeholders believe that applicants and workers, particularly those from underrepresented groups, stand to gain the most from skills-first practices, they are nearly unanimous in their opinion that individuals are also the group that is most exposed to the potential risks. Employers and education providers, while not without or immune from risks, are institutions with some level of collective resources and knowledge that will help them to shoulder the burdens of adapting to a new approach. On the other hand, individuals – and particularly those already disadvantaged – may experience additional barriers to using new skills signalling tools. Therefore, focusing policy on mitigating the risks pertinent to individuals and their outcomes should be at the forefront of policymakers’ considerations.
Introducing new forms of bias
The introduction of skills-first practices could create new forms of bias in the accessibility of skills development opportunities and outcomes of hiring processes. New skills learning, ways of signalling them, and tools used to validate them may not be widely accessible and may favour certain groups over others. Signals of skills gained and validated through alternative routes or skills assessments, including validation from more “objective” non-human agents, are not devoid of value judgements and may entail some of the same types of biases that are inherent to existing hiring and HRM systems.
Rather than opening up access to opportunities for individuals who are already struggling to secure positive labour market outcomes, a skills-first approach could further disadvantage them by not evaluating their potential contribution. The increasing prevalence of AI-driven or algorithmic tools in hiring or HRM may exacerbate this issue (Milanez, Lemmens and Ruggiu, 2025[27]). The design of AI models and the data on which they are trained determine their decision-making processes; algorithmic, non-human agents used across some skills-first practices can reproduce human biases, hinging on the quality of the data on which they are trained, as well as their design (Langenkamp, Costa and Cheung, 2020[28]).
Additionally, research has shown that the sociodemographic composition of the workforce in an industry impacts the language and cues in job ads (Hu et al., 2024[29]). For example, an analysis of 28.6 million job ads in the United Kingdom in combination with labour force statistics between 2018 and 2023 in Hu et al. (2024[29]) reveal that the language used in job ads can disrupt patterns of segregation. However, at the same time, attempts to use more inclusive language to encourage underrepresented individuals had the opposite effect than intended by positively reinforcing existing workforce make-up. Job ads which align with goals related to equity, diversity and inclusion could unintentionally serve as a vehicle of workforce polarisation that entrenches segregation in the labour market, a problem that could become ever more pronounced if job ads, skills assessment and ways of validating skills are left up to non-human agents which reproduce language that is causing polarisation (Hu et al., 2024[29]). Similarly to their human counterparts, algorithmic biases can go unsuspected. The heightened danger with automated hiring, however, is the widespread perception that machines are fairer than humans in the ways that they assess skills; a claim on which there is mixed evidence.
Within organisations, the existence of parallel modes of hiring and HRM could introduce biases to accessing upskilling and occupational mobility opportunities. If workers without formal credentials are perceived as less qualified or are not given equal access to upskilling and career development opportunities, this could reinforce inequities in pay, job security, and promotion prospects (Stainback, Tomaskovic-Devey and Skaggs, 2010[30]).
Diminishing future-readiness
Skills-first practices may inadvertently limit the future workforce readiness by prioritising immediate skills shortages over fostering future-readiness. Ensuring that workers continue to develop foundational and transversal skills remains essential, otherwise, individuals may struggle to transition between roles, adapt to emerging labour market needs, or engage in lifelong learning. This, in turn, could weaken workforce resilience and reduce the labour market’s capacity to respond effectively to future skills demands (CEDEFOP, 2013[31]).
In a decentralised and market-driven approach to upskilling and non-formal and informal learning, skills training risks becoming increasingly siloed and specialised. While this may effectively address immediate workforce needs, it may fail to equip individuals with skills that remain relevant over time. Training aligned with current high-demand skills may be tailored to specific organisation, industries, or short-term trends, potentially limiting workers’ long-term employability and career mobility. As a result, individuals may find their skill sets overly narrow, restricting their ability to transition across sectors or adapt to evolving labour market demands.
It is hard, and in some cases impossible, to predict the skills that will be in demand and what the careers of the future will look like; the industries and jobs currently in existence are changing, and so are the skills required to perform them. At the same time, employers stressed that the skills training offered at their organisations must be aligned with broader labour market needs, so as to support innovation and internal job mobility. However, there is a risk of short-termism in skills-based hiring if it focuses excessively on immediate job needs and overlooks transversal skills, which are equally essential for long-term job performance, continuous learning, and further skills development (Fu et al., 2022[32]). This could lead to over-specialisation, limiting career mobility and adaptability (Othman et al., 2022[33]).
A skills-first approach must have mechanisms that promote job mobility and continuous skills development in-built (van Loo, de Grip and de Steur, 2001[34]). Employers, education providers, and other stakeholders may draw inspiration from formal education pathways, which have historically been successful at fostering positive labour market outcomes for those who had access to them (Sutton Trust, 2022[13]). Apprenticeship and vocational education and training (VET) systems may be particularly vulnerable to over-specification, as a growing focus on meeting short-term market demands could lead to skills shortages in smaller occupational fields and a diminished emphasis on innovation and problem-solving, both critical for long-term workforce resilience. Heightened anxiety over the state of VET stems from the fact that VET institutions are perceived to have been more responsive to a skills-first approach, unlike more general or academic schools (OECD, 2025[35]). Existing concerns of student segregation into parallel learning pathways and quality of education across different institutions are exacerbated by the idea that integration of skills-first practices into some systems and not others could further polarise parallel pathways, creating new or reinforcing existing biases in the labour market.
Weakening collective bargaining and worker protections
By individualising skills and the value ascribed to them, a skills-first approach may undermine existing collective bargaining agreements, affecting job quality and workers’ protections in the workplace. Some degree of individualisation is central to a skills-first approach; each skill is well delineated and well defined, and in turn, every applicant or worker can be described by a unique bundle of skills. It is unlikely that a group of applicants or workers will have the exact same skill set. Given the diversity of the role and scope of collective bargaining agreements across OECD countries (Cheuvreux and Darmaillacq, 2014[36]), the weakening of agreements could affect a range of worker protections and contract conditions, such as wage-setting or job classification, or have other far-reaching consequences for job quality and labour market equity.
For example, a skills-first approach could extend to wage-setting processes, which, in turn, affect how much workers are paid. Central to skill-first practices is how employers ascribe value to specific skills and skill bundles; rather than relying on a traditional, hierarchal scale determined by an individual’s level of formal education or prior job titles, employers are encouraged to be more intentional in determining the skills that are needed within their organisations, and how much they are worth to them. Decisions about remuneration could become similarly individualised, as employers determine how much a worker should be paid based on the skills that they have. Structural changes to the nature of work, such as the increasing popularity of subcontracting and outsourcing functions and tasks deemed too expensive or non-essential, have had the effect of driving wages and job quality down in the occupations affected, such as janitorial staff and some HR functions across many companies (Weil, 2014[37]; Weil, 2017[38]). Structural changes to jobs that accompany the skills-first approach could have a similar effect.
In many workplaces and in collective bargaining agreements, workers are grouped according to specific job classifications or titles; it is unlikely that any significant group of individuals would have the exact same bundle of skills, meaning that each worker would be subject to a unique set of pay conditions and job classification. This could have a large and immediate impact on the conditions and protections conferred to workers through collective bargaining agreements, and in the long term, it could negatively impact the ability of workers to form new agreements and organise in the workplace. For example, an assessment of the functioning of collective bargaining and workers’ representation in OECD countries found that structural changes in the labour market have placed a significant number of workers in a “grey zone” in which they do not have the same collective bargaining rights, creating unbalanced power relationships in the workplace (OECD, 2019[39]). Moreover, the interaction between skills-first and traditional HRM systems will pose challenges when employees hired through and under contracts governed by traditional and skills-first approaches exist in the same workplace, creating more room for disenfranchisement (Howell and Kalleberg, 2019[40]).
Changing the nature of professions
The oftentimes opaque nature of new systems of skills validation could lead to the degradation of professional standards across certain professions. Some stakeholders express scepticism towards new skills validation systems, such as digital badges, due to their varying levels of quality and the challenges in ensuring their credibility. Critics argue that digital badges may lack validity and could be awarded without direct observation of performance, leading to questions about their trustworthiness (Perkins and Pryor, 2025[41]).
A skills-first approach envisions skills acquired through non-formal and informal means being assessed, validated, and recognised in the same ways as skills acquired in formal systems. For this reason, some stakeholders believe that certain skills-first practices are less applicable to certain regulated professions, such as many in the healthcare sector or those involving a high degree of risk to safety and well-being, such as architects or electricians.
Well designed and implemented skills-first practices recognise the breadth and depth of skills acquired through formal higher education experiences, and their indispensability to succeeding in certain professions. Just as there are some technical skills that are best taught through practical, on-the-job experience, there are also some skills that are best acquired through formal education. Ensuring the maintenance of high professional standards at a time when informal and non-formal systems are only emerging cautions against the pre-emptive investment in skills-first practices, which hinge on new systems of skill validation.
Many professions in which the importance of maintaining a high and regulated standard for skills is easily identifiable as a function of the legislation governing them. However, not all professions for which formal education remains crucial are regulated, creating the temptation that a skills-first approach could address pressing labour shortages without giving proper recognition to the level and type of skills required to perform certain roles, and the necessity of a formal education qualification that comes with the demands of the job. For example, formal educational qualifications remain important in maintaining a high standard of certain skills in teaching professions; stakeholders expressed concern that skills-first practices in hiring teachers could lead to the erosion of professional standards, resulting in unforeseen negative outcomes on the quality of teachers’ work and students’ educational outcomes. Jobs in the public sector which require a high degree of sensitivity and procedural knowledge were also mentioned by stakeholders.
Public policy can help stakeholders overcome the barriers to adoption while ensuring that employers implement skills-first practices in a way that realises their opportunities and guards against potential risks. Skills-first practices are being implemented, though uptake has been disparate and uneven (see Chapter 1). Even though many stakeholders may have limited experience with skills-first practices, a significant number expressed at least a moderate level of interest in implementing them within their organisation or across their industry (see Chapter 2). Moreover, surveys on employers’ attitudes show that even if they do not mention a skills-first approach, they are planning to rely on skills-first practices, such as tapping into previously overlooked diverse hiring pools, to address skills shortages (see Figure 3.2). Other skills-first practices, such as providing effective reskilling and upskilling opportunities and improving talent progression and promotion processes, were seen as some of the most promising to increase talent availability by employers. Current uptake and level of stakeholders’ interest in these practices illustrate their potential for growth in the near future.
Share of employers surveyed identifying the stated business practices as promising to increase talent availability
Source: World Economic Forum (2024[42]), Future of Jobs Survey, https://reports.weforum.org/docs/WEF_Future_of_Jobs_Report_2025.pdf.
How a skills-first approach looks like varies across organisations, as each employer operates within a unique country and industry context, has a unique organisational structure, and distinct skills needs. However, there are broad principles that underpin a skills-first approach that stakeholders should consider when designing and implementing effective practices; for example, transparency in the recruitment process and intentionality in crafting vacancies. Employers may struggle to interpret and translate these broad principles into actionable steps, particularly when constrained by a lack of resources or expertise. Skills gaps in HRM teams can be a particular obstacle, emphasising the need for strategic approaches to workforce planning (Weaver, 2021[43]). Implementing a comprehensive skills-first HRM approach requires significant organisational resources and can place an administrative burden on businesses – especially for SMEs with limited HR capacities. Developing and maintaining reliable skills assessments, tracking employee competencies, and ensuring continuous skills development require substantial investments in technology, training, and HR processes.
To support employers in overcoming these barriers, this report consolidates high-level procedures and policies gathered from stakeholders as part of this project. High-level insights provide stakeholders with actionable steps to the uptake of a skills-first approach, without prescribing the mechanisms of design and implementation. These insights are intended to bridge the gap between principles and action while accounting for the customisation necessary to adapt skills-first practices to fit organisational needs. Figure 3.3 provides a structured overview of the insights included in this report. Grounded in the conceptualisation of a skills-first approach and the principles underlying it (see Chapter 1), the remainder of this report presents high-level procedures and policies gathered from stakeholders in this project.
Note: High-level procedures and policies implemented by policymakers, employers and other stakeholders provide insights on the steps needed to make skills-first a reality, while respecting the high degree of customisation that will be required to implement practices at an organisation-level.
These high-level insights can be used by all stakeholders as they consider the policies, practices and support initiatives that are responsive to the needs of their country or industry context. Beyond high-level insights, the following section will provide examples of organisation-level skills-first practices. Employers, as the ultimate arbitrators of reform within their organisations, have a high level of agency and responsibility throughout the process. At the same time, policymakers and other stakeholders play a crucial role in regulating, guiding, and supporting employers to ensure that practices reflect the needs and preferences of society more broadly (Thorpe, Healy and Olsen, 2024[44]).
The following sections explore the role of policymakers in creating the building block of a skills-first labour market, supporting employers in the uptake of skills-first practices, promoting people’s skills signalling and skills development, and ensuring training quality and advancing skills recognition mechanisms. Employers and other stakeholders can gain valuable insights into the high-level procedures and organisation-level practices that have helped organisations implement and support the uptake of a skills-first approach.
3.3.1. Designing a skills-first labour market
The adoption of a skills-first approach to hiring and workforce development involves a shift in organisational culture, workforce knowledge, and access to reliable skills intelligence. By investing in these building blocks, governments can steer the uptake of skills-first practices, ensuring that they deliver on the opportunities they confer to individuals and adhere to regulation. In many industries, the transition to a skills-first approach is underway, but the practices and tools that employers, individuals and other stakeholders are using vary greatly. Reliance on credential-based hiring, fragmented information systems, and varying levels of awareness of alternative hiring models present challenges to implementation. In the current disparate ecosystem, there are ample barriers to adoption and room for the risks outlined above to manifest.
Skills-first practices are implemented at the organisation level, and there are few reliable sources that provide stakeholders with guidance on their uptake, or structures that would enable them to undertake the complex processes related to it. Developing a broader understanding of skills-first practices, expanding access to skills intelligence, and fostering organisational cultures that recognise diverse pathways to skills acquisition may contribute to the wider adoption of these approaches.
Governments, as major employers, have the potential to shape the direction of skills-first practices by integrating these approaches into public-sector hiring and workforce development. These experiences may inform the development of clearer guidelines, adjustments to regulatory frameworks, and support mechanisms that facilitate broader implementation. Support mechanisms may target the development of a skills-first culture in the workplace, a key enabler of uptake within organisations. Additionally, ensuring access to accurate, real-time skills intelligence could help employers and job seekers navigate shifting labour market demands. Strengthening knowledge, culture, and information systems in this way may contribute to a more adaptive and inclusive labour market, where hiring and workforce planning align more closely with evolving skills needs.
Leading by example
Governments can implement skills-first practices in public-sector hiring and HRM processes, leading by example and gaining valuable insights on the process. However, employers in the public sector highlight resistance to change and deeply ingrained organisational cultures as primary barriers to transformation by 2030 (WEF, 2025[45]). Consultations within the OECD Policy Committees revealed that many public-sector hiring processes remain heavily dependent on formal degree requirements, mirroring practices in the private sector. This reliance has contributed to degree inflation in public-sector roles, restricting access to opportunities for skilled individuals who lack formal qualifications but possess relevant competencies (OECD, 2023[46]). Additionally, skills gaps in the labour market and outdated regulatory frameworks are perceived as significant obstacles that could slow the adoption of skills-based hiring and broader workforce reforms within the sector (WEF, 2025[45]).
Public-sector hiring practices may also shape broader labour market dynamics, given that public employment accounts for approximately 20% of total employment across OECD countries, and nearly a third in Nordic countries such as Norway (32%), Sweden (29%), and Denmark (28%) (see Figure 3.4). By understanding the necessary steps and actively engaging with relevant stakeholders, governments can develop more effective support measures tailored to labour market needs (OECD, 2023[46]). Some governments have explored adjustments to their recruitment strategies, considering potential benefits such as widening talent pools and addressing hiring challenges in key public-sector roles. Public employers express optimism about future talent availability, with 52% anticipating improvements in the next five years. Many report planning to strengthen workforce development efforts, with 80% of employers stating intentions to enhance talent progression and expand reskilling and upskilling programmes (WEF, 2025[45]).
Note: Data for Iceland, Japan, Mexico, Türkiye and the United States are from the International Labour Organization (ILO), ILOSTAT (database).
Public employment by sectors and sub-sectors of national accounts. Total employment refers to domestic employment. Data for Costa Rica, Iceland, Japan and Korea are not included in the OECD average. Data for Japan does not include social security funds.
Source: OECD (2023[47]), Government at a Glance 2023, https://doi.org/10.1787/3d5c5d31-en.
Cognisant of the potential of skills-first practices, as well as the need to showcase what a responsible design and implementation process looks like, some public-sector employers across OECD countries have undertaken the shift to skills-first. This has enabled them to gain insights on the methodologies and outcomes of the process; lessons which can then be shared with and used by private sector employers when making decisions about their own transitions to skills-first. Using their experience as employers, policymakers can then make good choices about the incentives, support structures, and regulations needed to mitigate the risks inherent to the transition to skills-first and lower the barriers to adoption for private employers with limited capacity.
In the United States, several states have taken the lead in implementing skills-first practices within their public sectors, setting a precedent for broader adoption across industries. For example, the State of Maryland in the United States implemented a policy eliminating degree requirements for half of its public-sector jobs through an executive order, which was followed by a 41% increase in hires within the first year (Sullivan and Sudow, 2024[48]). As a part of the Commonwealth of Massachusetts’ “Lead by Example” Employer Talent Initiative, the Executive Office of Labor and Workforce Development will collaborate with private, non-profit, and government employers to develop and publish best practices resources for the broader business community to also adopt skills-based hiring strategies (Commonwealth of Massachusetts, 2024[49]). Other states, including Colorado and Pennsylvania, have also adjusted degree prerequisites for various roles, reporting outcomes such as reduced vacancy rates, increased applicant numbers, and improved job matches (NGA, 2025[50]). As of early 2024, 25 states have pursued skills-based hiring initiatives through executive orders, legislation, or administrative actions, reflecting an increasing interest in approaches that prioritise demonstrated competencies over formal academic credentials in public-sector employment (NGA, 2025[50]).
Governments across the OECD are investing in skills-first initiatives in hiring and the skills development of public sector employees. In terms of hiring, the Republic of Ireland’s Department of Public Expenditure and Reform has enshrined some skills-first principles in the Irish Civil Service Recruitment Policy and the Civil Service Renewal Plan. Namely, “open recruitment” and established internal mobility processes are designed to be competency-based, enabling individuals from a wide range of professional backgrounds and skill sets to succeed within the civil service (Department of Public Expenditure, NDP Delivery and Reform, 2021[51]; Republic of Ireland Sponsoring Group of four Secretaries General, 2014[52]). In human resource management, the Belgian Federal Public Administration developed a “Talent Exchange” programme through which 21 public organisations and agencies can request temporary staff from the other organisations within the network for help on a specific project. The programme has been used as a tool to address skills shortages while giving civil servants the opportunity to develop their skills and learn on the job. Skills are the key application and matching criteria in the exchange process; organisations within the network must have all agreed to a common charter grounded in existing regulations related to hiring and employment law (OECD, 2021[53]). However, similarly to the private sector, efforts at institutionalising a skills-first approach in the public sector remain limited and disparate.
Steering a skills-first culture
A skills-first approach is most effective when it becomes embedded within an organisation’s broader culture, rather than as a standalone reform to one part of the hiring or HRM process. Some employers see the skills-first approach as a way to tackle shortcomings in their current processes, though they face challenges in securing internal alignment and ensuring that skills-first principles are applied consistently across different business units. Factors such as resistance to change, limited understanding of the potential benefits, and fragmented decision-making are barriers to implementation. On the other hand, some employers have been successful at implementing a “zero-distance” mindset to the skills-first approach; the teams responsible for skills-first HRM fall under the same management as business administration or planning, rather than the purview of broader HR. This enables employers to shape and align practices to their needs, ensuring they deliver on their goals and opportunities.
Labour market policies and broader public initiatives have, in some cases, influenced cultural shifts in hiring and workforce development within organisations. Policy interventions, such as regulatory frameworks, financial incentives, and collaborative initiatives between businesses and workforce development bodies, have been used to encourage different hiring models. Research suggests that interventions promoting greater transparency in job postings and hiring criteria can improve access to employment opportunities for non-traditional candidates (Blasco and Pertold-Gebicka, 2013[54]). Additionally, financial mechanisms, such as tax incentives for skills training or subsidies for workforce development programmes, have been implemented in some contexts to encourage investment in upskilling efforts (National Governors Association, 2023[55]). For employers – particularly SMEs – navigating such transitions, access to guidance, resources, and capacity-building support may play a key role in determining whether they reach their goals of implementing skills-first practices or strengthening their hiring and HRM strategies more broadly. Throughout consultations, SME employers remarked that even though the skills development budget at their organisations was significant, it was not being utilised efficiently if there wasn’t a common understanding and agreement on skills needs and areas for improvement in hiring and HRM processes.
Within organisations, leadership engagement and cross-team collaboration can be key factors in embedding skills-first practices into daily operations. Communication between HRM teams, managers, and business units can facilitate smoother implementation, particularly in SMEs where HRM functions are managed alongside other responsibilities. Additionally, the support of senior leadership was seen as crucial to the success of approaches; when leaders participate in discussions around workforce development, skills-first principles become more integrated into decision-making processes. Some employers implemented pilot programmes or proof-of-concept initiatives as a strategy to gather evidence to showcase the potential of a skills-first approach.
While businesses and organisations influence these changes through their own hiring strategies, broader initiatives at the regional, national, or international level can also play a role in shaping employer behaviour and investment in workforce development. For example, multistakeholder fora convened or attended by policymakers and government agencies can foster a collaborative environment while informing policy directions. Policymakers can also create and strengthen partnerships by legislation or forming agreements with different social partners to institutionalise their role in policymaking and advising employers (Reznikova, Labanino and McKee Mathews, 2024[56]).
Various governments and international organisations have introduced initiatives aimed at reinforcing the importance of skills in hiring and career progression. In the European Union (EU), for example, initiatives have been undertaken to encourage a stronger focus on skills across member states One such effort was the European Year of Skills, a concerted to promote skills development, improve the alignment between workforce supply and labour market demand, and support broader workforce participation. Following on from the Year of Skills, the European Commission (EC) announced the Union of Skills strategy. Similarly, the Association of Southeast Asian Nations (ASEAN) proposed for 2025 to be the ASEAN Year of Skills; in collaboration with the ILO, the Malaysian government is spearheading events, initiatives and reforms aimed at addressing key labour market challenges, including informal sector formalisation, youth unemployment, gender disparities, social protection, and workforce skill development (SEA-VET, 2024[57]). Box 3.3. provides an overview of the EU’s work on promoting a skills-first approach.
The European Year of Skills 2023
In 2023, the EC launched the European Year of Skills, an initiative aimed at promoting a skills-first culture across the EU. By emphasising skills as a key driver of economic growth and social inclusion, the initiative contributed to shifting hiring and workforce development practices towards a skills-first approach.
The European Year of Skills focused on four key objectives:
Encouraging greater investment in training and workforce development to maximise labour market potential and address evolving skills needs.
Improving the alignment between skills supply and labour market demand through strengthened collaboration between EU member states, social partners, education and training providers, and businesses.
Enhancing job matching and career transitions, particularly in digital and green sectors, while increasing workforce participation among underrepresented groups, including women and young people not in education, employment, or training (NEETs).
Facilitating mobility and the recognition of skills and qualifications to attract and retain skilled workers from outside the EU.
To achieve these goals, the initiative leveraged existing EU tools, such as the ESCO skills taxonomy and Europass, to create a common language around skills and qualifications. It also played a role in advancing the EU’s 2030 social and employment targets, which include ensuring that at least 60% of adults engage in training annually and increasing the overall employment rate to 78%.
Throughout 2023, the EC implemented the European Year of Skills through a combination of new and existing initiatives, including the Pact for Skills, direct funding for upskilling and reskilling programmes, and coordinated awareness campaigns and events across EU member states. These efforts contributed to fostering a lasting shift in hiring practices and workforce development strategies, reinforcing the importance of skills-first practices in European labour markets.
The Union of Skills Strategy 2025
In 2025, the EC launched the Union of Skills, a strategy aimed at strengthening the EU’s competitiveness and resilience by prioritising skills development. Falling foundational skill levels across the population, as well as persistent skills gaps and shortages, signal that individuals and businesses need additional tools to navigate economic transitions, drive innovation, and foster social inclusion.
The Union of Skills aims to empower individuals across the EU to build strong foundational skills and engage in lifelong learning. Another core goal is to support businesses, especially SMEs, in finding and developing the skills they need for sustainable growth. To achieve these aims, the initiative is structured around four strategic pillars:
The EU will improve foundational education to help people acquire the basic, digital and STEM skills needed for quality jobs and resilient lives.
It will support the upskilling and reskilling of workers, especially in response to digital and green transitions, through targeted measures such as the promotion of Individual Learning Accounts and micro-credentials.
The strategy will improve the circulation of skills by enhancing the recognition of qualifications across borders, piloting a European VET diploma, and increasing access to mobility programmes such as Erasmus+.
It will attract and retain talent from outside the EU by launching initiatives such as the EU Talent Pool and promoting Europe as a destination for students and researchers through visa reforms and scholarship opportunities.
To support these efforts, the EC will mobilise significant investment through the European Social Fund Plus, Erasmus Plus, the Recovery and Resilience Facility, and other EU financial instruments. In parallel, it will establish a European Skills Intelligence Observatory and a High-Level Skills Board to guide policy with robust data, ensuring coordinated action across sectors and member states. The Union of Skills marks a decisive step towards creating a more competitive, inclusive, and future-ready Europe.
Source: EU (2023[58]) European Year of Skills: Real people, real skills, https://year-of-skills.europa.eu/index_en; EC (2025[59]), Communication from the Commission to the European Parliament, The European Council, the Council, The European Economic and Social Committee of the Region: The Union of Skills, https://employment-social-affairs.ec.europa.eu/document/915b147d-c5af-44bb-9820-c252d872fd31_en.
Uneven adoption of skills-first practices is prevalent within organisations as well as across industries, with some being better positioned than others to make the shift. The issue of unequal uptake across the labour market is a key concern, as many stakeholders did not feel like they had the tools, means or knowledge to implement skills-first practices within their organisations. Unequal uptake of skills-first practices hinders their effectiveness; by creating parallel systems within organisations and across industries, thereby limiting the professional mobility opportunities available to individuals and making recruitment processes more complex. If skills-first practices are limited to a specific subset of occupations or industries, then it will be harder for individuals to make transitions between opportunities governed by the different systems; this is particularly true if skills-first practices are only prevalent in vocational and technical occupations, from which it is already difficult to transition out of and into higher-paying professions which typically require higher education qualifications. On the other hand, if skills-first practices see a rapid and overpowering uptake in “white-collar” professions, then those who are already underrepresented will only be marginalised further if they are unable to access the means of signalling their skills or using skills-first recruitment systems.
Polarisation in recruitment practices across industries and organisations could limit individuals’ ability to navigate systems which they were not exposed to during learning or through training. Additionally, unequal adoption of skills-first practices could also lead to the depletion of certain educational pathways as a result of their inability to keep up with the pace of change in the education ecosystem, which could have negative consequences on the labour market outcomes of individuals who would have enrolled in such courses, as well as employers who rely on graduates from those pathways to fill technical and specialised roles.
Notably, many stakeholders came across skills-based hiring practices being implemented as partnerships between educational institutions and local employers within their jurisdictions. For example, the State of Maryland partnered with community colleges and non-profits to design and enhance existing training programmes around the essential skills needed for specific occupations, creating a pipeline of skilled and career-ready job candidates for open roles (Robbins, 2024[60]). While these partnerships have delivered positive labour market outcomes for participants, some stakeholders are concerned that such partnerships codify the need to “network,” or gain access to employers through exclusive means, even within a skills-first framework. The ad-hoc and closed nature of these partnerships means that providers of non-formal learning may not be able to deliver the same type and level of access to learners enrolled in these pathways, putting them at a disadvantage. Often, such partnerships are developed under the auspices of the skills-first approach, highlighting the need for stakeholder engagement and careful consideration of the design elements of interventions aimed at promoting a skills-first culture.
Expanding access to skills and labour market intelligence
Access to skills intelligence is critical for all to facilitate good candidate-job matching and make well-informed decisions about skills development. Skills intelligence is broadly defined as aggregated data and information on skills and the labour market; accessible skills intelligence includes tools that enable stakeholders to explore recent or real-time labour market data, skills taxonomies and ontologies, and skills signalling platforms. Unlike raw survey data, skills intelligence integrates multiple sources to provide interpretable and accessible insights (CEDEFOP, 2019[61]). Limited access to skills intelligence hinders effective job matching and workforce planning, creating challenges in navigating evolving labour market needs. Some stakeholders observed that despite the efforts to adopt skills-based hiring, traditional qualifications remain a dominant factor in hiring decisions in the absence of accessible, reliable labour market insights.
In certain industries, skills and intelligence are particularly scarce. Highly specialised sectors, such as astronautics, have limited workforce data due to the niche labour demands, while fields like seasonal agriculture rely on informal hiring networks, making structured skills intelligence less available. In such cases, employers often depend on professional networks and word-of-mouth recruitment, reinforcing traditional entry pathways and associated inequities (Rivera, 2012[62]). The lack of accessible skills intelligence not only affects hiring decisions but also limits individuals’ ability to identify in-demand skills and make informed career or training choices (OECD, 2016[63]).
In a rapidly evolving labour market, gathering and interpreting skills intelligence can be complex. While some large employers develop in-house data systems to track the supply and demand for skills, these are often expensive and impractical for smaller firms. A fragmented ecosystem – where private solutions dominate, and publicly available data are limited in coverage or usability – makes it hard for individuals and education providers to navigate the tools available.
Governments and organisations across the OECD have invested in developing and maintaining skills intelligence infrastructures, including ESCO and O*NET, as well as tools that facilitate job-matching, career exploration, and workforce mobility (Rentzsch and Staneva, 2020[64]). In some industries, such as steel manufacturing, which is heavily affected by the digital and green transitions, skills intelligence has proven essential in addressing skills shortages and guiding education providers on shifting skills demands (Maldonado-Mariscal et al., 2023[65]).
Despite these efforts, the accessibility of skills intelligence is uneven. The current ecosystem includes a mix of private and public tools, each with distinct strengths and limitations. Private-sector platforms, such as skills intelligence solutions offered by social networking sites (SNS) and specialised workforce analytics platforms, are widely perceived as more advanced in terms of data timeliness and usability. However, many of these platforms operate on subscription-based models, limiting access for smaller businesses, job seekers, and education providers who may not have the resources to afford premium features. While SNS and other private tools have contributed to positive labour market outcomes, their reliance on user-generated data raises concerns about data completeness, consistency, and potential biases (Caers and Castelyns, 2010[66]; Elias et al., 2016[67]).
On the other hand, publicly funded skills intelligence tools are often designed to serve a broader audience, providing open-access data on labour market trends, skills taxonomies, and occupational demands. These tools aim to support mainly informed decision-making for policymakers, job seekers, and training providers. For instance, the European Centre for the Development of Vocational Training (Cedefop) provides comprehensive information on future labour market trends in Europe through its Skills Forecast, which includes data on employment by sector, occupation, and qualification. Similarly, the United States Department of Labor maintains the O*NET system, a regularly updated database detailing occupational characteristics and worker requirements across the U.S. economy (see Box 3.4). However, stakeholders note that public platforms frequently lag behind private solutions in terms of updates, user-friendliness, and real-time insights, which limits their practical application in fast-changing industries. Strengthening public-sector tools and improving their integration with employer-driven and individual skills signalling platforms can help bridge existing gaps in skills intelligence.
Skills intelligence ecosystems include tools such as skills taxonomies and ontologies, interactive platforms providing real-time workforce analytics, and skills-matching platforms that facilitate matching between workers and employers.
The most advanced skills intelligence tools in the public domain are taxonomies and ontologies, while analytics and skills-matching platforms are predominantly developed and maintained by the private sector. There are, however, some public projects that aim to bridge the gaps between the different types of tools and develop functionalities for free and public use:
Skills taxonomies and ontologies
Skills taxonomies and ontologies are tools that enable actors in the labour market to access information on industries, occupations and skills. They rely on systems that classify occupations and occupational groups for statistical purposes and in the context of standardisation efforts, such as the Standard Classification of Occupations (ISCO) of the International Labour Organization (ILO) but focus on a particular country or industry context; they provide stakeholders with standardised language about skills, which they can then use to ensure consistency and effective communication in skills signalling.
The most advanced and widely used taxonomies and ontologies include the Occupational Information Network (O*NET) in the context of the United States and the European Skills, Competences, Qualifications and Occupations (ESCO) in the context of the European Union. However, governments across the OECD are investing in solutions that build on them or provide more detailed information relevant in the context of their labour markets, building on the information provided by ISCO and the successful models of O*NET and ESCO. For example, in 2022, the Australian Government set up the Jobs and Skills Australia (JSA) statutory body to provide advice on current, emerging and future workforce, skills and training needs. JSA is working to develop a National Skills Taxonomy with the explicit aims of supporting skills-based hiring, enhancing career planning and development, and simplifying and streamlining skills recognition. The taxonomy is intended for all stakeholders in the labour market, with accessibility for non-technical users at the forefront of design considerations.
While taxonomies and ontologies provide valuable building blocks for an accessible skills intelligence ecosystem, there is a need for public solutions that build on the common understanding of skills and that can be used by all stakeholders to get insights on the labour market and to signal their skills and needs.
Interactive labour market information systems
Labour market information systems (LMIS) are interactive platforms that aggregate information about the skills in demand and in supply in a particular labour market, enabling stakeholders to access real-time or recent insights to make decisions about their hiring and HRM strategies, training and development provision or uptake, and career choices. Like taxonomies and ontologies, LMIS rely on international classifications like ISCO to group and define skills, but they go beyond providing labour-market specific information on jobs and skills, including real-time or recently updated data on the demand and supply of skills in the given country and industry context.
The most advanced and up-to-date LMIS are developed and maintained by the private sector; they can be expensive and inaccessible to many SMEs, individuals and training providers. Governments and organisations across the OECD are increasingly investing in LMIS to democratise access to labour market intelligence, though the timeliness and comprehensiveness of information vary. For example, CEDEFOP’s skills intelligence tool brings together various strands of the Agency’s analytical and research work, including indicators of future employment growth, unemployment rate, or skills anticipation, to provide comprehensive insights on the skills available in the labour market across the European Union and partner countries and economies. Country-level efforts at creating and providing free and publicly available LMIS are occurring in England (United Kingdom), Australia, Canada, France, Finland, Germany, Scotland (United Kingdom) and Sweden.
Matching platforms
Job or skills matching platforms are tools that provide employers and applicants with a way to “find” each other, exchange information about skill needs and supply, and ultimately fill vacancies. Matching platforms encompass a diverse range of tools, their functionalities may include individual or aggregated vacancies for individuals to apply, scanning CVs or profiles to make applicant recommendations to employers, applicant tracking systems and labour force analysis dashboards, and matching tools for employers and individuals based on parameters defined by the user. Job matching platforms may rely on standardised job classifications, such as ISCO, or they may develop their own systems of skills classification. Increasingly, job matching platforms are integrating AI to streamline or improve the quality of matches and recommendations for users.
The private sector is far ahead of the public sector in the development, provision, and use of matching platforms. Companies develop matching platforms, such as social networking sites, for employers and applicants to access; some employers develop their own, in-house matching platforms, integrating workforce analytics and organisation-level data. However, governments are increasingly procuring and implementing sophisticated job matching platforms for public sector employment, including those AI-powered; the World Bank has highlighted the tools in use in Austria, Belgium and India for their integration into the public sector hiring system and documented impacts on retention and quality of job-candidate matches.
Australia, Singapore and the United Kingdom are amongst countries which have supported or rolled out public tools for skills matching to the general population. For example, Singapore’s MyCareersFuture is a job matching portal that provides free job search services and matches jobseekers with relevant jobs. The platform enables users to filter jobs that are eligible for government support, and it provides resource articles on career-related tips, human capital development, and industry insights. In 2023, the platform has 200 000 weekly users.
Source: Rentzsch and Staneva (2020[64]), Skills-Matching and Skills Intelligence through curated and data-driven ontologies, https://projekt.bht-berlin.de/fileadmin/projekt/delfi-wsdq/previews/DELFI2020-preprint__Skills-Matching_and_Skills_Intelligence_EN.pdf; Jobs and Skills (2024[68]), National Skills Taxonomy Discussion Paper, www.jobsandskills.gov.au/sites/default/files/2024-06/national_skills_taxonomy_discussion_paper.pdf; CEDEFOP, (2024[69]) Skills Intelligence, www.cedefop.europa.eu/en/tools/skills-intelligence; Barnest et al., (2023[70]), Labour market information and an assessment of its applications: a series of international case studies, https://hdl.handle.net/2381/24198957.v1; WSG (2024[71]), Career Matching and Guidance Services, www.wsg.gov.sg/home/individuals/career-matching-guidance.
Beyond broader labour market intelligence, employers emphasised the importance of gathering internal skills intelligence and evaluating it in the context of external dynamics. Understanding existing skills within an organisation, assessing current skills needs, and anticipating future demand were identified as essential for both hiring and workforce planning. Employers use a range of tools to gather and analyse intra-organisational skills intelligence, including:
In-house data-driven systems: A large multinational employer developed an internal platform that integrates hiring data, sales trends, and labour market insights to track skills gaps and inform hiring decisions. This data-driven approach enables HR teams in the company to anticipate workforce needs and adjust hiring and upskilling strategies accordingly. Hiring data consists of detailed information about people hired in the past, including their inventory of skills, broken down across time and locations. Input from managers regarding present and future skills needs is also included, as well as data from an external assessment platform that enables employees to verify their skills, ensuring that skills gained throughout workers’ skill development while at the organisation are accounted for.
Outsourced skills intelligence platforms: A mid-sized multinational employer used private skills intelligence tools to assess hiring feasibility, map available skills in the labour market, and anticipate industry trends. This was particularly relevant for highly technical fields, where talent scarcity makes proactive skills mapping critical for project planning.
External expertise for skills assessment: A large employer lacking internal capacity for skills-first HRM partnered with an external service provider to assess employees’ proficiency levels and identify skills gaps. This combination of in-house knowledge and external expertise helped refine recruitment strategies and improve internal mobility pathways.
The complexity and need for internal skills intelligence vary across firms, though all stakeholders can benefit from a more open and collaborative skills intelligence ecosystem. Employers reported that intra-industry fora convened by governments provided valuable opportunities to share insights, align workforce development strategies, and engage policymakers. At the same time, efforts to improve intra-organisational skills, intelligence and expand access to broader labour market data could enhance transparency, reduce information asymmetries, and support more effective workforce planning.
3.3.2. Supporting employers in the uptake of skills-first practices
Employers seeking to implement a skills-first approach can benefit from government support to ensure alignment with regulations and responsiveness to the needs of all stakeholders. A skills-first approach spans across all hiring and human resource management functions of an organisation; strengthening these processes impacts how organisations identify, assess, and develop talent. This not only has an immediate impact on individuals in the workforce but also on the organisation’s ability to innovate, respond to external economic factors, and contribute to strengthening the workforce for an uncertain future.
Employers have adopted various strategies to begin the implementation of skills-first practices within the hiring and HRM process. Some organisations have prioritised the implementation of skills-first HRM practices, investing in internal capabilities and tools before applying insights from the process to hiring. Others have focused on skill-based hiring by removing degree requirements and systematically collecting data on employee outcomes to build leadership support for broader HRM reforms. Ultimately, the optimal sequence of implementation depends on an organisation’s existing hiring processes, HRM capacity and skills needs.
In considering changes to hiring and HRM practices, various policy considerations come into play. The interaction between the policy levers available to governments, the needs of different stakeholders, and internal and often proprietary hiring and HRM systems is a challenging landscape to navigate. Policymakers can look towards what employers have done to gauge the type of support that may be necessary and responsive to their needs. Strengthening HRM capacity and equipping HR professionals with the necessary tools and expertise is key to effectively implementing skills-first practices. At the core of this shift is establishing a structured, skills-based hiring framework, which enables organisations to assess and recruit talent based on competencies rather than credentials.
Strengthening HRM capacity and skills of HRM professionals
Strengthening HRM capacity and investing in the skills of HRM professionals is key to the success and sustainability of a skills-first approach. Throughout consultations, employers stressed the importance of defining the role of HRM professionals within organisations, beginning with the recognition that HRM is broader and distinct from hiring alone and that its functions encompass those beyond just administrative. While hiring is a critical HRM function, it is just one component of a broader strategy to build and sustain a skilled and adaptable workforce. Effective HRM ensures that employees have opportunities for growth and career transitions within the organisation.
HRM professionals play a strategic role in workforce planning, identifying skills gaps, and facilitating professional development. In many organisations, HRM professionals collaborate with managers and senior leadership to integrate skills-first practices into business strategies (Coursera, 2023[72]).
However, resource limitations and a lack of awareness often hinder effective HRM. Some companies overburden a single HRM professional with diverse responsibilities, while others distribute HRM tasks across multiple roles, leading to inefficiencies and fragmented processes. This challenge is particularly pronounced in SMEs, where limited resources and informal hiring practices make it difficult to adopt structured workforce development strategies (Bacon and Hoque, 2005[73]). Without the leadership of HRM professionals and a well-functioning HRM ecosystem, barriers to skills-first adoption will be more pronounced, and the potential risks that come along with them are more likely to manifest. For example, HRM leadership is crucial to the implementation of training and career advancement programmes, which are enablers of internal mobility, and key to enhance employee retention and engagement that is in-line with workforce development that addresses business objectives (Mishra, 2024[74]).
The needs of employers to develop HRM capacity will vary greatly. For some employers, internal adjustments – such as expanding HR teams, improving access to workforce data, and adopting more effective stakeholder engagement tools – may be sufficient to support the transition to skills-based hiring. However, other organisations may require broader support, including general HRM training, the upskilling HRM professionals, and improving access to resources for strengthening HR teams. Addressing these challenges through targeted policy interventions will ensure that firms, regardless of size or sector, can effectively implement and sustain skills-first hiring practices (Lenihan, McGuirk and Murphy, 2019[75]).
In addition to the capacity and expertise required to implement skills-first practices, HRM teams must also develop new skills. Training HR professionals is essential to help them assess and recognise skills beyond formal qualifications, with a particular emphasis on transversal and new skills. Additionally, HRM professionals must be equipped with the skills to identify and mitigate biases – both in their individual decision-making and within hiring processes – to ensure that alternative learning pathways and non-traditional career trajectories are valued on par with formal qualifications.
As technology and data-driven insights reshape hiring and workforce planning, HR professionals must also develop analytical skills to interpret skills data and effectively leverage digital tools, particularly those incorporating AI. AI-powered assessments, including psychometric tests, video interview analysis, and chatbot-led pre-screening, are increasingly integrated into recruitment processes, shifting HRM professionals’ roles from direct evaluation to strategic oversight (Tambe, Cappelli and Yakubovich, 2019[76]). The integration of AI in HRM requires professionals to understand its capabilities and limitations, critically assess its recommendations, and balance algorithmic insights with human expertise.
Policymakers can begin by recognising the importance of preparing HRM professionals for encountering and implementing skills-first HRM practices, as well as the development of HRM technologies. For example, the French Ministry of Transformation and Public Function (Ministère de la transformation et de la fonction publiques) developed a national strategy for AI use in HRM within the state civil service, explicitly outlining the training and education required to adapt to these advancements while mitigating potential risks of the new technologies (MTFP, 2023[77]).
Governments can provide models for the types of tools and training that HRM professionals could benefit from, extend training offerings to the private sector, or provide financial incentives and programmes directly aimed at developing the skills of HRM professionals. Governments across the OECD have partnered with training providers or have designed their own training programmes for HRM professionals in the public sector. Additionally, some public sector employers have invested in custom AI-powered tools to help professionals succeed in their roles. Box 3.5 provides examples of public sector initiatives to strengthen internal HRM capacity through the skills of professionals and investment in AI-powered tools.
Training for public sector HRM staff
In the past, the French Government partnered with higher education institutions to deliver HRM training to managers in the public sector. More recently, the French government supported the creation of the National Institute of Public Service (Institut national du service public), a publicly funded higher education institution which delivers long and short-cycle trainings of civil servants, HRM professionals included. Similarly, the Finnish government supports HAUS, a state-owned public-sector training provider which has worked with public administrations all around the world to support the design and implementation of effective HRM in the public sector.
Strengthening HRM capacity through AI tools
In hiring, the Swedish municipality of Upplands-Bro used a robot to conduct interviews for select positions, with the goal of reducing bias in how and what questions are asked and in the feedback that candidates receive.
In HRM, a number of promising initiatives are in development or have been piloted:
In the United Kingdom’s Civil Service, “Succession Select” is an enhanced search assistant powered by a large language model, designed to search through an authorised database containing the career profiles of current senior civil servants and identifying a list of potential candidates whose profiles may match the requirements of other role vacancies. The filtering and matching capability automates the process of HRM personnel who otherwise would have to manually search through a large database of career profile data. The returned list of potential candidates is reviewed by humans for further consideration and evaluation when making the final selection of candidates.
The French Interdepartmental HR Services Centre (Centre interministériel des services RH) and Directorate-General for Administration and the Civil Service (La direction générale de l’administration et de la fonction publique) are developing an AI-powered HRM chatbot, currently rolled out to select managers, who can use the tool to access information about the most up-to-date regulation and information related to the French public sector HRM. The tool is intended to serve as an “HR assistant” to HRM professionals.
The Slovenian “Big Data Analysis for HR efficiency improvement” was a pilot project of a big data tool installed on the Slovenian State Cloud Infrastructure that enabled analysis of HR data of the Ministry of Public Administration, with the goal of improving efficiency. The tool enabled researchers to access anonymised internal data of the Ministry, including on time management, their HR database, finance and Public Procurement and combine it with external sources, such as postal codes of employees and weather data, to identify potential for improvement and possible patterns of behaviour. Findings from the research were used by the relevant ministries to inform their processes; the project is being continued, and the positive experience inspired other public administrative entities to undertake similar projects.
Source: L’École nationale d’administration (2021[78]), Human Resources Management in the Public Sector, www.ena.fr/Europe-et-international/Programmes-de-formation/Programmes-internationaux-courts/Programs-in-English/Human-Resources-Management-in-the-Public-Sector; Institut national du service public (2025[79]), Formation continue, https://insp.gouv.fr/formation-continue?field_thematique_de_la_formation%5B261%5D=261&sort_by=date_asc; Bewicke (2019[80]), This robot interviewer is helping Sweden recruit without bias, www.weforum.org/stories/2019/07/sweden-robot-remove-bias-from-recruitment/; (HAUS, 2025[81]), DSTI (2024[82]), DSIT: Succession Select, www.gov.uk/algorithmic-transparency-records/dsit-succession-select#description; Ubaldi et al., (2019[83]), State of the art in the use of emerging technologies in the public sector, https://doi.org/10.1787/932780bc-en.
Stakeholders are concerned that HRM professionals, managers, and others involved in decision-making processes may not fully appreciate or internalise the shift from valuing traditional academic achievements over actual skills. Lacking an understanding of the value of candidates’ diverse experiences is seen as a key obstacle to enhancing diversity in the workforce; a diverse candidate pool does not necessarily translate to a diverse workforce, as biases within the recruitment process or internal mobility may remain. On the other hand, HRM professionals remarked that, as opposed to bias, the inability to deliver on coherent and consistent skills-first practices was driven by competing priorities and a lack of resources; even if they had the skills, they did not receive adequate resources or manpower to put them to use.
Another key issue is the repercussions of AI-powered tools on the work and skills of HRM professionals. Box 3.6 explores the impact of AI on hiring, highlighting its implications for HR professionals and evolving skill requirements.
Some employers believe that the use of AI tools in the process of interviewing and screening candidates can make the process more evidence-based and systematic, reducing costs while eliminating biases that human agents introduce in their evaluation of candidates. At this stage of the hiring process, tools may include “games” for psychometric assessment and social and emotional skill measurement, visual or verbal analysis of asynchronous video interviews, and chatbots that may ask basic screening questions.
The use of these tools has two major implications on the work of and skills require from HRM professionals; on one hand, they take away a degree of agency from human agents and make the process less reliant on human judgement, while at the same time requiring professionals to have an understanding of the output of these tools, what they’re capable of detecting, and what their limitations are.
These employers see the decrease in reliance on the judgment of individuals involved in the process and an increase in the weight given to the results of AI-powered and other standardising tools as a way to make the hiring process more evidence-based. AI-powered tools to evaluate candidates can produce output that HRM professionals can use in conjunction with other data and information about the candidate to make hiring decisions. Alternatively, output and recommendations from these tools can be compared to the judgment of human agents involved in the process to screen for potential human biases. The use of such tools may not be openly disclosed, and the systems behind them are often proprietary, making measuring outcomes and impact difficult. Studies suggest that while candidates tend to prefer human-led, synchronous interviews, the use of asynchronous interviews and AI-powered analysis can reduce the effect that human bias plays in the process and evaluation of interviews.
On the other hand, the use of AI tools does not necessarily take responsibility away from human agents, but channels it into the complex task of evaluating and interpreting the output of AI tools in the context of what they are capable of measuring. AI was seen as a “co-pilot” in the interviewing process; it may prompt the interviewer with questions or conduct analysis on the candidate’s answers altogether, but the ultimate decision-making power rests with the people involved in the process.
Giving human recruiters more capacity to focus on social and emotional skills could further help employers capture the skills that are notoriously hard to gauge through qualifications or other forms of impersonal assessment, even those skills-first. This requires HRM professionals to possess the skills that enable them to make such judgements. Through the use of AI-tools, some employers want to enable to human recruiters to “think more outside of the box” in terms of who may be a good fit for a vacancy; incorporating AI in different points of skills evaluation may enable HRM professionals to pay less mind to the skills that AI can easily capture and expend more effort into making decisions about the candidates’ suitability for the role and organisation in a more holistic manner. However, in order to be able to do this, they must have the skills and receive adequate training on how to complete these tasks.
In this way, the degree of responsibility that rests with human agents may be greater than ever, as opposed to a time when a proxy signal like an academic degree was accepted as justification for the outcome of a hiring process.
Source: Fabris et al., (2025[84]), Fairness and Bias in Algorithmic Hiring: A Multidisciplinary Survey, https://doi.org/10.1145/3696457; Suen, Chen, and Lu (2019[85]), Does the use of synchrony and artificial intelligence in video interviews affect interview ratings and applicant attitudes?, www.sciencedirect.com/science/article/pii/S0747563219301529.
Establishing a skills-based hiring framework
A robust skills-based hiring framework is essential to the implementation of a skills-first approach. A skills-based hiring framework refers to the concrete steps in the hiring process that employers follow throughout the recruitment cycle in order to recognise, value and prioritise the set of skills individuals possess rather than the ways in which skills were acquired. They also reflect the principles and high-level procedures that employers put in place to ensure that hiring practices are applied equitably across all candidates. A robust hiring framework in any recruitment system is crucial not only to adequately address the complex business needs of organisations (World Economic Forum, 2023[16]), but also to minimise the room for bias and discrimination in the recruitment process (Hardy et al., 2021[86]).
Given the high degree of specificity of skills-first practices at the organisation-level, policymakers can provide high-level guidelines on what a skills-based hiring framework may look like, but should primarily focus on providing resources and connecting employers with initiatives, forums and stakeholders that will enable them to enact change within their organisations. Insights on the procedures to shift to a skills-first approach are key for employers who don’t have the capacity to build or adapt complex in-house systems or out-source assistance.
Employers stressed the importance of intentionality, structure, and systematic application of methods to find and assess skills within a skills-first hiring framework. Applying these principles throughout the recruitment process contributes to gathering the highest quality of data about applicants’ skills and being able to evaluate them against the criteria set out in earlier stages of the process. The quality of insights and their systemic evaluation is essential to make good candidate-job matches, mitigate potential biases, and deliver on the goals of a skills-first approach more broadly. The following skills-first principles and procedures were deemed as particularly important by employers throughout the hiring process:
Intentionality in the process of crafting vacancies based on the insights and intelligence gathered from internal stakeholders on the skills requirements of the position. Down the line, skills requirements determine the choice of platforms and channels to find and reach candidates based on perceptions of where relevant talent could be found. A well-crafted vacancy enables employers to tap into previously overlooked hiring pools, as they are able to ask for the exact skills required for the job rather than relying on proxy signals.
A well-defined structure of occupations and vacancies enabled consistency across the organisation in terms of the scope of skills demanded in each posting (i.e. role-specific and/or technical) and the core skills needed to thrive at the organisation (i.e. transversal and/or social and emotional). Job postings must be responsive to the actual demands of the position, but differences in skills requirements must be used as justification to maintain barriers to individuals from non-traditional applicant pools.
Systematic application of skills-based hiring practices across the relevant roles. While there will always be some variation in candidates’ experiences and outcomes of hiring processes – irrespective of how carefully crafted and structured they are – it is important to make sure that processes are applied uniformly across candidates to mitigate the risk of perpetuating or introducing biases in the process. For example, following the order of different steps in the recruitment cycle, such as the sequence in which candidates are exposed to online screening tools and interviews with hiring managers. Different types of interactions with the organisation influence candidates’ engagement with the process and ability to learn about the role; the order in which they occur and the attitude with which candidates are met impact candidate performance and outcomes.
Box 3.7 provides examples of skills-based hiring processes that exemplify the principles and procedures outlined above:
Employers who have implemented skills-based hiring practices shared what a typical hiring process looks like within their organisation. Employers stressed that just like with traditional hiring cycles, the process will vary depending on the position, taking into account the level of skills required or seniority.
Example 1
1. A questionnaire assessing the candidate’s skills and eligibility for the role.
2. Initial candidate screen with a recruiter.
3. Review or additional screen by the manager responsible for managing the recruit.
4. Skills-oriented behavioural interviews with a dedicated assessment team, focused on specific functional areas of job-candidate alignment, as well as competency-based (i.e. focusing on social and emotional skills) assignment for organisation and role fit.
5. For technical roles, the process included the following additional steps:
a. A short online assessment to gain a baseline understanding of the applicant’s skill set, enabling recruiters to better tailor questions to skills areas in which candidates didn’t meet the standard. While the results were used to determine candidates’ progression in the process, they were weighted along with the entire application. There was no strong correlation between scores in the online assessment and candidates’ performance during other stages of the recruitment process.
b. A practical on-site assessment for candidates applying for roles which require them to work with specific equipment. This may require them to solve a problem on the specific equipment in a defined period of time, giving them an opportunity to demonstrate their technical skills.
Other features of the process:
In order to ensure that candidates stay engaged in the process, facilitate a short turnaround time from the candidate’s first interaction with the company to informing them about selection decisions.
Company-wide equivalency-based approach in job postings; apart from regulated professions, degree requirements and years of experience were removed for most positions.
Following selection, ask applicants and managers for feedback about the entirety of the process.
Example 2
Preparing & sourcing candidates
1. Hiring call between talent acquisition team and relevant mangers to discuss the exact skills needs discussing different options to addressing the demand for skills or personnel (e.g. recruiting proactive and developing skills in-house, reaching out to specific individuals or hiring pools, making a general job posting, etc.).
2. Talent acquisition team produce a report about regional skills supply assessing the feasibility of hiring in specific labour markets and locations to inform managers and leaders about the options going forward, based on information gathered throughout conversations on skill needs.
3. If significant barriers are identified, determine alternative routes to filling skills demands in conversation with managers. These may include sourcing talent internationally, relaxing some of the skills demands, or consulting external resources such as recruitment specialists.
Screening
1. Initial candidate screen with a recruiter.
2. Additional screen with a manager, usually in the form of a technical challenge or assessment; directly following up on technical skills identified in the previous round to ensure skill level and that they are aligned with the needs of the project.
3. Panel interview assessing candidate’s technical skills, fit within the team, as well as alignment with the organisation’s mission. External tools may be used to evaluate and validate technical skills.
Source: Stakeholder interviews.
3.3.3. Promoting people’s skills signalling and skills development
Governments can promote people’s agency and role in the uptake of skills-first practices through initiatives that promote direct skills signalling and skills development in the workplace. Direct skills signalling refers to the use of clear and straightforward language about skills by all stakeholders, conveying what skills they need or offer without relying on proxies such as qualifications or previous job titles as signals. Direct skills signalling by individuals and employers’ responsiveness to them is an essential component of the skills-first approach. All stakeholders in the labour market must have a common language and means of exchanging information about skills so that they can make good hiring and upskilling decisions. Therefore, promoting direct skills signalling by individuals and enhancing the visibility of skills signals must go together with investments in skills-first practices among employers.
Stakeholders encountered direct skills signalling among individuals in a range of contexts; through non-formal training qualifications (such as online courses, short-cycle training, or MOOCs) during recruitment processes and in formal education institutions (such as universities or VET). This suggests that skills-first practices are not siloed to a particular institution or process, but all the contexts within which they appear are either structured or institutionalised, meaning that the parameters of signalling skills are pre-defined for individuals by the training provider or employer. Moreover, uptake of skills-first practices remains unequal and disparate across different entities and types of institutions.
In designing interventions to help individuals navigate skills-first practices in the labour market, policymakers and employers should consider how they may reach individuals without institutional support. Individuals who are NEET, seniors and those re-entering labour markets are some of the groups that could benefit the most from a skills-first approach, yet these practices may be the most inaccessible to them. Skills-first career guidance and skills development as a way to promote mobility within organisations can strengthen workforce readiness of all individuals, regardless of preexisting skills-sets or labour market participation.
Providing adequate support structures to navigate skills-first
Stakeholders emphasised the importance of providing adequate support structures to enable individuals to navigate skills-first practices, including skills development opportunities and access to the tools that will enable them to participate in skills-first labour markets. Increasingly, policies and public initiatives aimed at supporting individuals’ skills development have individual autonomy and responsibility as an underlying principle. Consequently, elements of their design assume that adults are in a position to take responsibility for their own learning pathways, see the courses available and make well-informed decisions about them (OECD, 2024[87]). However, adults may struggle to navigate the rapidly changing landscape of skills development opportunities and the skills that are demanded in labour markets - they may require additional support to take advantage of existing opportunities.
Individuals are already responding to changing skills demands by altering their skills signalling behaviour – emphasising the importance of democratising access to these practices. Chapter 2 shows some of the changes in the top digital skills signalled across OECD countries in recent years; skills like data analysis and Python are increasingly being signalled by individuals across industries within many OECD countries. At the same time, skills related to social media, such as Microsoft Word and PowerPoint, are being signalled less and less. Decreases in signalling across some digital skills could indicate decreases in demand, at the same time, it could denote that some skills are increasingly being expected of candidates as a “given”. This means that individuals are not only expected to have a more diverse and rich skill set, but that they must understand which skills employers are demanding of them, both explicitly and implicitly (see Chapter 2).
Individuals front the burden of upskilling, as they must invest time and resources into acquiring new skills. Prior to upskilling, they must also invest effort in understanding the skills that they have and identifying in-demand skills in the labour market, as well as the routes for upskilling that are available to them. Following upskilling, individuals must learn how to signal their new skills and may also expend considerable effort into exploring the opportunities available to them thanks to their new training.
Among stakeholders, career guidance was seen as a particularly valuable mechanism to make skills-first practices more accessible and alleviate some of the burden for individuals. Career guidance can be a particularly effective intervention in the context of the skills-first approach because of the high degree of personalisation entailed in the process, corresponding to the high degree of individualisation that comes along with many skills-first practices. While across countries and industries, there is room for improvement in the provision of adult skills development programmes, many governments and employers already provide meaningful learning opportunities. Improving the visibility of and access to learning pathways, as well as providing information and services that could help individuals plan their learning trajectories, could empower them to participate in the increasingly complex learning and training landscape.
The OECD Survey of Career Guidance for Adults found that, on average across the six participating countries, 43% of adults spoke with a career guidance advisor over the past five years, with significant variation across different sociodemographic groups (OECD, 2021[88]). Types of career guidance services will vary greatly depending on the target group, taking into account their ability to access the service, their existing skill sets, opportunities for skills development, and their needs in terms of information and labour market outcomes. Career guidance in the context of a skills-first approach may entail providing information and training on proactive skills signalling, as well as helping individuals navigate the processes and systems that they are likely to encounter in the labour market.
While everyone can benefit from career guidance, some groups may experience heightened difficulties in achieving positive labour market outcomes, for whom skills-first practices could be particularly beneficial. Stakeholders believe that a skills-first approach can broaden access to opportunities to these groups, moreover, results of data analysis on the prevalence of skills signalling among these groups support the imperative for targeted interventions (see Chapter 2):
Young workers entering labour markets for the first time & youth NEET: A study across Brazil, India, Indonesia, and South Africa found that even though transversal skills represent 25% of the top 20 skills demanded in Online Job Postings (OJPs), young people tend to overlook signalling these, focusing instead on industry-specific technical skills aligned with their formal qualifications (Barbarasa, 2017[89]). Frequently, young people don’t recognise their non-formal and informal learning remains due to reliance on formal educational qualifications and professional records in résumés and job applications (Ehlinger, 2023[90]). There may not be any space to reflect the breadth of their skills, or they may lack the knowledge or language to describe them. This may be particularly concerning in the context of sectors linked to the green and digital transition (Demaria, 2020[4]; Blair et al., 2020[5]), such as the digital sector, where young professionals primarily rely on informal learning methods. In cyber security, for example, 86% of professionals engage in self-study to update their skills in this rapidly evolving field (OECD, 2024[91]). Direct signalling of skills acquired through non-formal and informal routes is crucial to enable young people to achieve positive labour market outcomes within those industries, as well as address the growing skills shortages in related industries.
Individuals skilled through alternative routes (STARs): STARs are individuals who may have few or no formal qualifications, but who have gained skills through pathways such as work experience, informal or non-formal learning. STARs exist across all sociodemographic groups in society, though stakeholders remarked about the importance of paying mind to the needs of senior workers who have acquired a wealth of experience throughout their working lives but may struggle to signal the skills associated with it. Many job titles, tasks, and composition of skills have changed over time; proxy signals like job titles of roles that may not exist anymore or that have significantly changed the skills required to perform them will make it difficult for STARs to achieve positive labour market outcomes. Job or task displacement may be a particularly harsh experience for individuals who have spent their working lives in a single industry, organisation, or occupation without experiences of external mobility, making them less prepared to navigate modern hiring and skill signalling systems. STARs could gain considerably from policies that prioritise skills over traditional qualifications, enabling them to showcase the breadth of their skill-sets beyond their job-title or area of expertise (Boselli et al., 2023[25]; Blair et al., 2020[5]). To enable this, however, they must first be able to navigate the relevant tools.
Stakeholders believe that skills signalling tools (such as social networking sites, skills assessments, or micro-credentials) can address the lack of engagement with labour opportunities among individuals underrepresented in the labour market, particularly amongst underrepresented groups. Providing individuals with tools for skills signalling, skills development programmes and spreading awareness about skills signalling were also seen as beneficial. Box 3.8 provides examples of public initiatives which enable individuals to take advantage of skills-first tools, or that provide them directly:
Ensuring that individuals have the necessary tools and support to take ownership of their skills development is key to fostering a resilient and adaptable workforce. Across OECD countries, various initiatives have been introduced to provide jobseekers and workers with clear guidance, financial incentives, and structured learning pathways that enable them to make informed decisions about their upskilling and career progression:
The Republic of Türkiye
The Turkish Employment Agency (İŞKUR) has implemented targeted training programmes aimed at upskilling jobseekers with lower educational backgrounds. Their programmes focus on enhancing employability in non-agricultural sectors, equipping individuals with the skills needed to transition into stable and higher-quality employment opportunities. By providing structured training and skill validation mechanisms, Türkiye is working to bridge the gap between jobseekers and labour market demands, fostering economic inclusion and workforce mobility. As a result, Türkiye has among the highest rates of individuals with lower educational attainment actively engaging in skills development.
Belgium (Flanders)
In Belgium (Flanders), the Flemish Government has introduced a long-term vision to empower individuals in managing their own career development through the Learning and Career Account. This initiative is designed to equip workers with the tools to navigate a rapidly changing labour market by enabling continuous learning, upskilling, and career transitions. The account serves as a digital wallet, providing individuals with a transparent overview of the financial and training incentives available to support their skills development. The Learning and Career Account aims to address key labour market challenges, including the need for new competencies, ageing skill sets, and evolving job roles. By centralising information on available training support, the initiative helps individuals take greater control of their career progression and adapt to labour market shifts. Over time, the Flemish Government plans to further harmonise training incentives and enhance the transferability of training rights across different stages of an individual’s career. Understanding the learner profiles - or the characteristics, motivations and obstacles faced by adult learners - could help to tailor communication about the learning and career account to different learners.
Singapore
Skills Future Singapore is a government agency providing a range of services to students and adults alike, ranging from career guidance and structured upskilling programmes to subsidies and allowances that can be used towards a variety of accredited training institutions and courses. The Agency also oversees the MySkillsFuture portal, which allows individuals to undertake a range of assessments to identify their skills gaps, discover new interests, or explore their skills. Through the portal, individuals can apply for the range of programmes offered by the agency, as well as “storing” their credentials in a Skills Passport that is linked to a government digital identity authentication system. The comprehensive nature of the services that the agency offers enables it to address the needs of individuals at different stages in their educational and professional journeys, recognising the diversity of their experiences. Additionally, the Agency partners with employers and training providers to ensure that services are integrated into workplaces and educational settings and that they are aligned with labour market needs.
Source: DWSE (2022[92]), Vision Memorandum: Towards a learning and career account in Flanders, https://publicaties.vlaanderen.be/view-file/50474; World Bank, (2018[93]), Evaluating the Employment Impact of Skills Training for Jobseekers in Turkey: The Case of İŞKUR's Vocational Training Programs, www.worldbank.org/en/country/turkey/publication/turkey-evaluating-impact-of-iskur-vocational-training-programs; OECD (2024[94]), Challenging Social Inequality Through Career Guidance: Insights from International Data and Practice, https://doi.org/10.1787/619667e2-en; SkillsFuture Singapore (2025[95]), Initiatives, www.skillsfuture.gov.sg/initiatives/early-career; OECD (2022[96]), OECD Skills Strategy Implementation Guidance for Flanders, Belgium: The Faces of Learners in Flanders, https://doi.org/10.1787/7887a565-en.
While the agency to acquire new skills ultimately rests with the individual, the role of providing learning opportunities is distributed across different stakeholders. Policymakers, education providers and employers all bear some degree of legal or societal obligation to provide room for individuals to acquire and signal new skills. Stakeholders are concerned about the effort that individuals may have to exert to understand and navigate skills-first practices, which, without adequate support, will pose a barrier to many. For example, removing degree requirements without providing alternatives and adequate guidance on skill demands to applicants could have the effect of further burdening candidates and reinforcing inequalities in accessing opportunities. Indeed, stakeholders felt that individuals already struggle to find clear guidance on developing or demonstrating the right skills for desired roles.
Ultimately, interventions aimed at these groups will be most effective if they are targeted and responsive to people’s needs. Policymakers and other stakeholders should work together to identify specific groups that could benefit from career guidance and other interventions that enable them to navigate skills-first practices, including those already in place across many organisations. For example, some employers have instituted pathways to promotion and career-mapping tools that workers can use during their time at the specific organisation. However, tools and knowledge can become obsolete when taken out of context, or simply be ineffective if employers don’t provide adequate guidance on their usage. Therefore, any individual, irrespective of their status in the workforce, could benefit from access to information and resources on navigating skills-first practices.
Instituting skills development pathways to facilitate job mobility
Mobility within organisations, accompanied by skills development opportunities, is a way to address skills shortages and expand opportunities for individuals. Mobility within organisations, or internal mobility, is the movement of employees within an organisation through a promotion (i.e. upward or vertical mobility) or transfers (i.e. horizontal mobility), both of which require individuals to acquire new or different skills in order to succeed in their new responsibilities (Ray, 2023[97]).
In recent years, internal mobility opportunities have declined as employers have shifted to rely on the external labour market when faced with skills shortages. This has been accompanied by a rise in external mobility opportunities (i.e. individuals moving between employers) for some, though it has also been associated with the persistence of informal employment and decline of collective bargaining in the workplace (Bidwell, 2011[98]; International Labour Organization, 2023[99]). In the face of unprecedented challenges to addressing skills shortages, many employers are rediscovering the potential of internal mobility for filling skills gaps within organisations and the benefits in terms of job quality and skills development that it confers to individuals.
The need and demand for learning and skills development are key determinants of employers’ and individuals’ decisions about internal mobility, along with labour market conditions. Internal mobility opportunities can encourage individuals to acquire and apply new skills, while their experience of transfers and promotions reinforces their learning and exposes them to new tasks (Ray, 2023[97]). In order to foster an effective and responsive internal mobility ecosystem, employers highlighted the importance of the following processes:
Delineating between task-specific skills and transversal skills and mapping mobility opportunities given variation in strengths in both groups. For example, individuals with strong technical skills related to specific tasks may benefit more from upward mobility opportunities if given the opportunity to develop social and emotional skills related to leadership, while others with strong transversal skills could move across the organisation if given the opportunity to develop task-specific skills relevant to different teams. A renewed emphasis on skills like design thinking and problem solving for all employees was seen as crucial to work alongside emerging AI technologies, as well as to troubleshoot problems caused by their level of integration into workflows and present limitations.
Providing a range of different learning pathways that employees can undertake based on their preferred learning style, as well as opportunities to validate skills acquired in non-formal ways. Some learning pathways may include in-role development, independent learning, intervention from a specialist instructor and project-based learning or collaborative learning with a mentor. Access to different learning pathways should be consistent across the organisation; even informal or mentor-based learning opportunities should be inbuilt into a skills development strategy and could be disseminated across the workforce through mechanisms like mentorship schemes. Employers stressed the importance of not viewing skills development as a “zero-sum” exercise, which would gauge employee engagement with the training on a pass-fail basis, but rather to recognise the variation in individuals’ needs and capacity to learn.
Looking beyond past achievement. Skills-first practices should focus not only on what candidates have done so far in their professional lives, but also on their potential for growth. HRM professionals should assess candidates’ ability to learn new skills and adapt within the organisation. Identifying adjacent skills (i.e. those closely related to the skills that are sought-after) can help bridge skills gaps through tailored upskilling pathways. Employers who integrate skills intelligence tools to track both internal and external workforce trends can make more informed hiring and training decisions.
Even though employers recognised the importance of skills development opportunities, they cited resource constraints, lack of expertise and a lack of information about support structures as common barriers that prevented them from rolling out these practices on an organisation-wide basis. In order to overcome these challenges, employers relied on different stakeholders in the design and implementation process of skills development opportunities:
Social partners. Consultations with trade union representatives were crucial to understanding the limitations and challenges of different practices in the workplace. Equally, for employers with complex, data-driven evaluation systems as well as for those with low capacity to gather information, ensuring that the interests of employees were reflected in the design and implementation of practices was crucial to the uptake of opportunities by employees.
Education providers. Partnering with local institutions to promote the uptake of relevant skills and training programmes. Especially in VET, certain pathways that used to provide a reliable employment stream have been defunded or eliminated, hindering the talent pool that is available to them. Creating partnerships and connecting with local institutions to create or promote programmes is a successful avenue for nurturing talent.
Multistakeholder partnerships. Non-profit organisations, networking organisations, and industry associations have supported many employers in the uptake of skills-first practices. Employers noted the importance of collaboration across industries, particularly within those facing high levels of skill shortages in relation to the green and digital transition. Fora convened or attended by policymakers were spaces where employers could engage in sharing information about practices and having meaningful exchanges with other stakeholders, such as education providers.
Box 3.9 provides an example of a multistakeholder partnership which helped connect employers with government support structures, resulting in the creation of apprenticeship programmes enrolling a diverse group of workers in industries experiencing pronounced skills shortages:
Employers may struggle to navigate regulations or take advantage of the funding and support structures already available to them to implement skills-first practices. Community-based, non-profit, private and other mission-driven organisations can help bridge the gap between policies and those they are intended to serve.
Adaptive Construction Solutions (ACS) is an organisation headquartered in Houston, Texas, and it supports employers across the entire United States. ACS offers technical assistance to employers in the construction and energy industries to design, deliver and manage apprenticeship programmes. A part of their work is funded by the United States Department of Labour through the Apprenticeship Building America grant, which has enabled them to assist - at no cost - more than 75 employers, facilitating apprenticeship employment for over 3 500 individuals across a diverse group of workers. ACS worked with government representatives to identify employers who could benefit from the grant and conducted targeted outreach; additionally, employers who wanted to implement apprenticeship programs but who faced capacity constraints were referred to ACS by federal and state government agencies.
Nationwide, the goal of the Apprenticeship Building America grant is to facilitate four million new apprentices in the workforce by 2030 across the United States. The Department of Labor awarded more than USD 171 million for the first round of the programme to 39 grantees in 2022, with a further USD 195 million committed to 43 grantees in a second round of funding in 2024.
ACS guides employers throughout the design and implementation process to ensure that apprenticeships are properly registered, enabling individuals to have their skills validated through industry-recognised and nationally portable credentials, akin to a diploma. ACS also works with employers to collect data on the outcomes of apprenticeship programmes and the individuals who undergo training as part of them. Outcome monitoring has enabled ACS to work with employers to iterate and improve their programme offerings, with the goal of helping individuals thrive within and beyond their programmes, helping employers fill skill shortages in sectors essential to the green transition at the same time.
ACS also works with employers to establish pre-apprenticeship and other skills development programmes, further enabling individuals without certifications or low levels of basic skills to access opportunities. ACS helps employers determine entry requirements which are reflective of the needs of marginalised communities, such as veterans with psychological and physical disabilities, to enable access and encourage them to enrol. This is crucial, as apprenticeships are one of the few funded routes for these populations to develop their skills, though their rates of apprenticeship enrolment remain well below that of the general population.
Other inclusive practices entail outreach and recruitment efforts in the communities within which employers are located, as well as retention of workers following the completion of the programme by providing continuous skills development opportunities.
Source: ApprenticeshipUSA (2025[100]), Apprentices by State, www.apprenticeship.gov/data-and-statistics/apprentices-by-state-dashboard; ApprenticeshipUSA (2025[101]), Apprenticeship Grants Performance Dashboard, www.apprenticeship.gov/data-and-statistics/apprenticeship-grants-performance-dashboard; United States Environmental Protection Agency (2025[102]), Summary of Inflation Reduction Act provisions related to renewable energy, www.epa.gov/green-power-markets/summary-inflation-reduction-act-provisions-related-renewable-energy#:~:text=Investment%20Tax%20Credit%20and%20Production%20Tax%20Credit,-The%20Investment%20Tax&text=Through%20at%20least%202025%2C%20the,projects%20over%201%20MW%20AC; Consulations with stakeholders.
3.3.4. Ensuring training quality and advancing skills recognition mechanisms
The rise of non-formal training presents new opportunities for targeted skills development. However, the rapid expansion of these alternative training options has made it more complex to assess their quality and comparability. Without clear validation frameworks, individuals may struggle to identify relevant training opportunities, while employers may find it difficult to evaluate the credibility of these qualifications (OECD, 2024[87]). Addressing these challenges requires robust quality assurance mechanisms and standardised recognition systems that ensure training remains relevant, transparent, and aligned with labour market demands (OECD, 2024[87]).
Ensuring that skills acquired through work experience, non-formal training, and short courses are widely recognised requires robust accreditation and validation mechanisms. The accreditation of prior learning and the development of transparent recognition frameworks are critical in helping individuals demonstrate their competencies effectively. Making non-traditional credentials more comparable to formal qualifications can enhance their trust and usability in the labour market (CEDEFOP, 2012[103]). Policymakers and education providers are working to strike a balance between flexibility in training options and maintaining high standards of quality and credibility (European Commission, 2021[104]; OECD, 2021[105]). Many countries, such as Canada and Germany are developing systems that assess the value of prior learning and non-traditional credentials, ensuring that they provide meaningful pathways for career progression and lifelong learning (OECD, 2023[106]) (OECD, 2022[107]). As learning pathways become more flexible and diverse, access to clear information and guidance will be crucial in enabling individuals to make informed decisions about their skills development and professional growth.
Monitoring quality and strengthening the credibility of training and certification systems
The absence of widely accepted quality assurance mechanisms can make it difficult for workers to evaluate the value of different training options and for employers to determine whether a given certification accurately reflects the competencies required for a role (OECD, 2024[87]).
Unlike traditional degree programmes, which are typically subject to national accreditation and quality frameworks, many non-traditional learning pathways lack uniform oversight. This variation can make it difficult to ensure alignment between training programmes and labour market demands, potentially leading to skills mismatches (Arias Ortiz et al., 2020[108]). In some cases, training offerings may not provide the necessary skills for specific job roles, limiting their effectiveness in addressing workforce needs. For example, a degree programme may provide a valuable theoretical or academic background in a vocation, while on-the-job training or a vocational programme is indispensable to develop the skills that individuals will need to work with the technologies and systems in the workplace.
Responsibility for ensuring the quality and credibility of training and certification is shared across multiple actors, including governments, industry groups, education and training providers, and employers. Governments play a key role in setting quality standards for adult education and training. In fact, approximately 50% of quality assurance mechanisms globally are overseen by government agencies, including in Australia, Greece, Iceland, Ireland, Korea, and Mexico (OECD, 2024[87]). Ministerial departments are responsible for 42% of these mechanisms, as seen in Canada (British Columbia), Czechia, Denmark, Estonia, Israel, and Latvia (OECD, 2024[87]). National and regional authorities often establish training standards, accredit institutions, and align qualifications with industry requirements, frequently using national qualifications frameworks (NQFs) to define structured learning outcomes. However, as non-formal and employer-led training expands, traditional oversight mechanisms may not always apply.
Employers, particularly in fast-evolving sectors such as technology, finance, and advanced manufacturing, are increasingly developing in-house training and certification programmes to address skills shortages. While these initiatives offer targeted upskilling, their recognition outside individual firms may be limited, restricting workforce mobility. To address this, industry groups have developed sectoral skills frameworks to promote standardisation across companies (e.g. the cyber security workforce framework from UK cyber security Council, or ESCO green skills framework). Similarly, education and training providers – including universities, technical colleges, and private institutions – are offering short-term, modular training options that respond to shifting labour market demands, such as in the ICT field (OECD, 2024[91]). However, the lack of clear comparability between alternative credentials and traditional qualifications can contribute to a fragmented training landscape, making it difficult for individuals and employers to navigate.
To improve alignment in training and certification systems, several OECD countries have introduced frameworks that provide common reference points for qualifications and training standards. Unlike quality assurance mechanisms, these frameworks do not regulate training providers but establish guidelines to enhance consistency, comparability, and recognition of skills. For example, Australia’s National Microcredentials Framework defines key principles and standards for short-term training programmes, ensuring that microcredentials are structured in a way that aligns with employer needs and broader qualifications frameworks (DofE, 2022[109]). While it does not act as a regulatory body, the framework helps standardise how microcredentials are designed, assessed, and recognised within the Australian education and labour market systems. Similarly, the European Qualifications Framework (EQF) provides a common reference system that allows EU member states to compare qualifications across different education and training systems. Rather than directly assessing training quality, the EQF supports cross-border mobility and recognition by mapping national qualifications to a shared framework, making it easier for individuals and employers to understand how different qualifications relate to one another (European Commission, 2018[110]). In Singapore, the SkillsFuture initiative integrates a quality assurance component within a broader workforce development strategy. It requires training providers to meet strict standards before qualifying for government funding, ensuring that publicly supported training programmes maintain a high level of quality and relevance to labour market needs (SkillsFuture, 2024[111]).
A key reference for quality assurance in vocational and non-formal education is the European Quality Assurance Reference Framework for Vocational Education and Training (EQAVET), which provides guidance for governments and training providers on establishing effective quality assurance mechanisms. Unlike broader qualifications frameworks, EQAVET specifically focuses on monitoring and improving training quality through a structured cycle of planning, implementation, evaluation, and review (see Box 3.10).
Ensuring the quality and recognition of non-formal training is essential for strengthening the credibility of alternative learning pathways and skills validation mechanisms. Across OECD countries, various quality assurance frameworks have been developed to assess and certify training providers, offering individuals and employers greater confidence in the reliability of skills acquired outside traditional education systems.
A key reference for quality assurance in vocational and non-formal education is the European Quality Assurance Reference Framework for Vocational Education and Training (EQAVET). Established in 2009 and updated in 2020, EQAVET provides a structured quality cycle – planning, implementation, evaluation, and review – to guide governments and training providers in ensuring high-quality learning outcomes. While primarily designed for vocational education and training (VET), many countries have adapted EQAVET principles to validate non-formal and continuing education (European Commission, 2023[112]).
In addition to EQAVET, several countries have implemented national quality assurance systems tailored to non-formal adult learning. Examples include:
Belgium’s Skills Validation Consortium facilitates the formal recognition of competencies acquired through work experience, helping individuals gain certifications without traditional academic pathways.
The Netherlands’ Recognition of Prior Learning (VPL) System, which enables workers to have their skills assessed and documented, improving labour market mobility and lifelong learning opportunities.
France’s Qualiopi certification is a mandatory quality label for training providers receiving public funding, ensuring alignment with national competency standards.
Switzerland’s EduQua framework is a widely adopted quality label for adult learning providers, focusing on transparency, continuous improvement, and employer relevance.
These quality assurance frameworks incorporate a mix of self-assessments, external audits, and accreditation processes to maintain training standards. Some systems, such as Portugal’s DGERT certification, rely on periodic reviews and documentary assessments, while others, like Ireland’s QQI framework, require ongoing quality monitoring and engagement with regulators.
The increasing diversity of non-formal training options, including micro-credentials and employer-led upskilling programmes, underscores the need for robust and transparent validation mechanisms. By adopting structured quality assurance frameworks, countries can enhance trust in non-formal learning and ensure that individuals can effectively signal their skills in the labour market.
Source: OECD (2024[87]), Quality Matters: Strengthening the Quality Assurance of Adult Education and Training, https://doi.org/10.1787/f44a185b-en; OECD (2024[113]), Mapping Quality Assurance Indicators for Non-formal Adult Learning, https://doi.org/10.1787/1ce40dfa-en.
Exploring non-traditional mechanisms for skills recognition and validation to enhance skills signalling
The uptake of skills-first practices is changing the ways through which skills are signalled and validated. While traditional credentials such as CVs and job applications remain widely used, digital platforms and alternative validation mechanisms are offering new ways for individuals to present their skills. However, awareness, accessibility, and consistency in these tools vary, affecting how effectively job seekers can demonstrate their competencies and how employers interpret them.
For employers, assessing skills signalled by candidates can be complex, particularly due to the lack of standardised frameworks for alternative validation methods. While industry-recognised certifications, employer-led assessments, and skills endorsements provide additional insights, their interpretation and comparability across different sectors remain challenging. As these validation methods develop, efforts to improve clarity and reliability may influence how employers can use them as an alternative to the current tools or integrate them into hiring decisions.
As digitalisation transforms hiring practices, job seekers are increasingly using non-traditional methods to showcase their skills. In the EU, the proportion of job seekers using alternative job search methods grew from 9% in 2010 to 14% in 2020 (Eurostat, 2023[114]). In Finland, greater access to the internet and online tools has enabled individuals to expand their exposure to job leads and career opportunities, improving labour market outcomes (Laukkarinen, 2023[115]). The information shared online when applying for jobs is not only greater in volume but also differs in nature from that shared through traditional methods (e.g. CVs and cover letters). This shift has implications for HRM, particularly in how employers analyse, assess, and integrate this data into hiring decisions. With the rise of skills-based hiring, organisations are increasingly seeking new tools to enhance talent identification and assessment, ensuring that candidates' skills are accurately recognised and effectively matched to job requirements.
Skills endorsements on professional networking platforms are gaining traction as a widely accepted method for validating and signalling competencies beyond formal credentials. Skill endorsements are public attestations from colleagues, supervisors, or professional connections, verifying an individual’s expertise in a specific skill and adding credibility to self-reported competencies.
The use of endorsements has been expanding across OECD countries, with notable increases in Israel, Estonia, and Lithuania (see Figure 3.5). Research suggests that these endorsements contribute to improving labour market outcomes by enhancing the credibility of other skill signals, particularly for individuals without formal educational qualifications. In the United States, an increase in ten peer-endorsed skills is associated with a reduction in the median employment gap by approximately 0.38 months (Baird, Ko and Gahlawat, 2024[116]). The impact is more pronounced for individuals without a formal degree, where adding ten skills can shorten employment gaps by up to 1.1 months (Baird, Ko and Gahlawat, 2024[116]). This suggests that skills endorsements from professional networks not only help job seekers signal their competencies more effectively but also play a role in reducing hiring barriers and improving employment outcomes.
Source: LinkedIn 2024.
AI is playing an increasingly integral role in skills recognition and validation, particularly as automation becomes more embedded in human resource management across OECD countries (Milanez, Lemmens and Ruggiu, 2025[27]). AI-driven assessment platforms leverage natural language processing (NLP) and machine learning algorithms to evaluate problem-solving abilities, enabling employers to assess practical competencies beyond traditional qualifications. Some platforms incorporate adaptive testing methods, adjusting in real-time to a candidate’s performance for a more personalised and dynamic validation process.
Governments and organisations are increasingly exploring AI-powered skills assessment tools to meet workforce demands. For example, the U.S. Army is leveraging generative AI to develop job-relevant scenarios for evaluating officers’ skills, streamlining content creation and reducing review cycles (ICF, 2024[117]). Similarly, the UK's National Health Service (NHS) has introduced an AI-powered Digital Skills Assessment Tool to assess and enhance digital proficiency among healthcare professionals (NHS, 2024[118]). Additionally, the UK Government has announced plans to implement AI tools like “Humphrey” to optimise public services, including assessments for better human resource management (GOV, 2025[119]), These developments highlight how AI is transforming skills recognition and workforce development. The private sector has been a leader in AI-powered assessments, with companies developing data-driven hiring solutions to evaluate technical, cognitive, and soft skills. See Box 3.11 for an overview of AI-driven skills assessment platforms and their applications in hiring.
As skills-based hiring evolves, organisations are increasingly adopting AI-powered skills assessment tools to enhance candidate evaluation. These tools provide data-driven insights, assessing technical skills, cognitive abilities, and soft skills alongside traditional qualifications.
Key features of AI-driven assessments
AI-powered assessments automate skills evaluation, reducing manual effort and improving relevance. Automated test generation creates job-specific questions, coding tasks, and simulations, ensuring tailored assessments. Adaptive testing adjusts difficulty in real-time, providing a more precise measure of a candidate’s abilities.
Multimodal skill analysis enhances assessment depth by evaluating written responses, video interviews, and problem-solving tasks to measure communication, teamwork, and adaptability. Predictive analytics and skills mapping match candidates to roles by analysing skill sets and career trajectories. Psychometric and behavioural assessments evaluate personality traits and decision-making styles, offering a more comprehensive candidate profile.
Potential benefits of AI-driven assessments
AI-driven assessments improve efficiency and scalability, reducing hiring timelines and allowing organisations to evaluate more candidates without compromising quality. They also enhance decision-making by offering objective, data-driven insights, minimising bias in candidate selection.
Beyond recruitment, AI tools analyse workforce trends to identify emerging skill demands, enabling proactive hiring strategies and aligning talent acquisition with market needs.
Challenges and considerations
Despite their advantages, AI-driven assessments present certain challenges. The lack of standardisation in AI-generated evaluations raises concerns about consistency and comparability across different platforms. Additionally, issues of bias and transparency in AI decision-making remain a key area of discussion, as algorithms may inadvertently reinforce existing inequalities if not properly designed and monitored.
Source: Tountopolou et al (2021[120]) Indirect skill assessment using AI technology, https://doi.org/10.14738/ASSRJ.84.10077; Celik et al (2024[121]), The affordances of artificial intelligence-based tools for supporting 21st-century skills, https://doi.org/10.14742/ajet.9069.
Clear guidance and regulatory frameworks are crucial to ensuring fairness, transparency, and reliability regardless of the mechanism used to assess or validate skills – whether AI-driven assessments or peer endorsements. Without proper oversight, non-traditional validation methods risk inconsistency and limited trust, hindering their adoption and effectiveness in hiring. Establishing guidelines and best practices enables employers, job seekers, and policymakers to navigate the evolving skills recognition landscape, ensuring these mechanisms are applied ethically and equitably. Box 3.12 illustrates how Canada has introduced specific guidance on AI-driven candidate assessments, covering explainability, bias mitigation, and candidate notification. Similar frameworks can support the responsible adoption of alternative validation methods, reinforcing their credibility and alignment with labour market needs.
As AI adoption in recruitment grows, Canada has taken steps to guide the responsible use of AI in candidate assessment, ensuring fairness, transparency, and accountability in hiring processes. These measures aim to prevent bias, improve decision explainability, and maintain human oversight when AI tools are used to evaluate candidates.
AI in candidate assessment: Public sector guidance
The Public Service Commission of Canada has issued guidelines on AI-driven candidate assessments, offering hiring managers a framework for using AI responsibly. These guidelines outline key principles:
Explainability and Transparency – Hiring managers must be able to justify AI-assisted decisions and ensure that candidates understand how AI is used in assessments.
Validation of AI-Generated Results – AI outputs, such as automated scoring of tests, structured interview responses, and skill-based ranking algorithms, must be reviewed to confirm accuracy and fairness.
Bias and Barrier Mitigation – AI assessment tools should be regularly audited to detect and address biases, particularly those that could disadvantage equity-seeking groups.
Candidate Notification – Applicants must be informed when AI tools are used in assessments and provided with a recourse mechanism to challenge AI-driven decisions.
The guidelines also stress that hiring decisions must remain human-led, with AI used to support rather than replace decision-making.
Regulatory developments on AI in hiring
Beyond public sector hiring, Canada is introducing new regulations to enhance transparency in AI-driven candidate assessments. Ontario’s Bill 149, the Working for Workers Act (2023), mandates that, starting in 2026, employers must disclose the use of AI in hiring assessments, including automated resume screening, interview analysis, and candidate ranking systems. This requirement aims to give candidates greater awareness of AI’s role in their evaluation and ensure accountability in AI-driven hiring decisions.
By implementing clear guidelines and legislative measures, Canada is taking steps to ensure that AI enhances, rather than undermines, fairness and trust in candidate assessments, helping to shape responsible AI adoption in recruitment.
Source: Government of Canada (2025[122]), Artificial intelligence in the hiring process, www.canada.ca/en/public-service-commission/services/appointment-framework/guides-tools-appointment-framework/ai-hiring-process.html; Labour & Employment Law (2025[123]) Artificial Intelligence, Real Consequences? Legal Considerations for Canadian Employers Using AI Tools in Hiring, www.labourandemploymentlaw.com/2025/02/artificial-intelligence-real-consequences-legal-considerations-for-canadian-employers-using-ai-tools-in-hiring/.
In terms of facilitating communication and exchanging information about the skills that individuals have validated through non-traditional mechanisms, blockchain-based certification systems have emerged as a secure and efficient solution. These systems utilise decentralised, tamper-proof ledgers to create verifiable and portable digital credentials, reducing reliance on traditional intermediaries for skill verification. By storing digital certificates on a blockchain, each credential is embedded with metadata, including details of the issuer, recipient, and validated competencies, ensuring authenticity and preventing fraud (European Comission, 2025[124]). Job seekers can share these credentials with employers through unique digital keys or QR codes, enabling instant verification and streamlining hiring processes. This enhances employer confidence in alternative qualifications, such as micro-credentials and vocational training certifications, by providing a secure, transparent, and universally recognised means of skills validation. Moreover, blockchain technology helps to safeguard the integrity of certifications, facilitating seamless global recognition of skills acquired through diverse learning pathways.
Several governments and institutions are integrating blockchain technology into skills validation frameworks. In the United States, the Illinois Blockchain Initiative has explored blockchain-based credentialing for academic and vocational training, enabling individuals to store and share verifiable skill records throughout their careers (DIT, 2018[125]). In Europe, the European Blockchain Services Infrastructure (EBSI) is being developed to provide secure and verifiable digital credentials that can be recognised across EU member states. Through EBSI, individuals can store and share their academic and professional qualifications, reducing administrative barriers and improving trust in digital credentials (European Commision, 2025[126]). These initiatives highlight how blockchain strengthens skills signalling, allowing job seekers to present credible, employer-recognised skills gained through work experience, micro-credentials, and alternative training programmes. As skills-based recruitment expands, blockchain-based validation could play a key role in bridging the gap between informal learning and formal workforce recognition.
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