Empowering the Workforce in the Context of a Skills-First Approach

1. Skills-first in OECD countries: Concepts, trends and implications for the labour market

Abstract

The global labour market is undergoing significant transformation driven by digital, green, and demographic shifts. These changes challenge traditional education and hiring models, emphasising the need for a skills-first approach to better align labour market supply and demand. This chapter explores the concept of a skills-first approach, which prioritises individuals’ competencies over traditional credentials. It examines the dimensions of skills signalling – acquisition, communication, and recognition – and how these intersect with skills-first human resource management practices. Emerging trends, such as skills-based hiring and alternative learning pathways, highlight the potential of this approach to address skills shortages, foster workforce diversity, and enhance inclusivity.

1.1. Introduction

The global economy is undergoing profound transformations that are reshaping the world of work, changing skills demands and working practices. Three major transitions stand out as drivers of these changes: the digital transition, the green transition, and the demographic transition. The digital transition continues to drive demand for new technical skills, but also skills that allow individuals to perform tasks that are beyond the existing capabilities of existing technologies, or that allow individuals to improve their productivity by using new technologies. The green transition is pushing economies to shift toward environmentally sustainable production methods, expanding opportunities in emerging industries and new job profiles, requiring an array of new skills. Meanwhile, demographic changes – such as declining fertility rates in OECD countries and rising life expectancy – are altering the age structure of the workforce, heightening pressures on skill supply and influencing who participates in the labour market and the make-up of teams.

Together, these transitions intensify the need to rethink on the one hand how best to equip individuals with the skills that are demanded in labour markets and, on the other, how best to create high quality employment opportunities for communities that traditionally have suffered worse labour market outcomes, fostered greater inclusivity and reduced persistent barriers to employment among vulnerable groups.

Initial education systems must become more agile to better respond to changing labour market needs. Such change can increase the readiness of young people to fill emerging opportunities, but has little impact on the large share of those currently in the labour market and experience structural changes, or on other adults who have only a weak engagement or no engagement with the labour market. Furthermore, whereas changes in skills demands resulting from the green and demographic transition can be largely foreseen and are more gradual, changes due to the digital transition are less predictable and can lead to sharp and unforeseen changes in skills demands. This could lead to potential mismatches between skills demand and supply, even among younger workers, because education systems are not able to predict and adjust to such changes.

The difficulty of predicting the impact of digital technologies on skills demands is highlighted in various estimates. In 2025, the World Economic Forum (WEF) estimates that 59% of the world’s workforce would require training by 2030 to keep pace with growing skills demands driven by artificial intelligence (AI) adoption, underpinned by the high demand for analytical thinking skills, resilience and flexibility, along with technical skills. Of those requiring training, employers foresee that 29% could be upskilled in their current roles, while 19% could be upskilled and redeployed elsewhere within their organisation (World Economic Forum, 2025[1]). Likewise, in 2024, the OECD estimated that 72% of job vacancies in occupations highly exposed to AI already demand at least one management skill, and 67% require business process skills such as clerical work or customer service (Green, 2024[2]).

Technological advancement alone, including pre-generative AI, would require up to 40% of workers to adjust their skill sets significantly to remain competitive in terms of technical skills (OECD, 2020[3]). For example, the demand for digital skills was projected to grow by 70% by 2030, with AI-related competencies becoming foundational across diverse industries (OECD, 2020[4]). These estimates preceded the rapid rise of generative AI technologies like ChatGPT, underscoring the heightened need for adaptive and accessible reskilling mechanisms.

The rapid evolution of skills demands calls for upskilling approaches that are fast, targeted, and accessible to everyone – not just those in formal education. Flexible learning pathways, such as microcredentials, online courses, and workplace training, have scaled to reach workers of all ages and backgrounds (Bahl and Dietzen, 2019[5]), particularly those in vulnerable groups or at-risk industries (OECD, 2024[6]). These initiatives have prioritised affordability and relevance, enabling individuals to quickly acquire the specific skills needed in dynamic labour markets. Public-private partnerships and targeted government incentives have driven the development and delivery of high-quality training options, facilitating equitable access for many (OECD, 2024[6]). Also, by moving beyond traditional education systems and embracing alternative learning models, economies have effectively addressed skills shortages and fostered resilience in the face of digital and green transitions.

However, skills investments by individuals to gain relevant skills to better contribute to emerging labour market needs cannot be realised unless they communicate effectively their skill set and, in turn, if employers prioritise such information. This is where a skills-first approach – or an emphasis on individuals’ skills rather than how they were acquired (i.e. prioritising traditional credentials in hiring and human resource management processes) – could play a crucial role in responding to these challenges. Traditional skills signals, such as formal qualifications and prior job titles, have historically been used by employers to approximate individuals' skills and proficiency levels. However, with the introduction and growing popularity of new, more direct ways of signalling skills, such as digital platforms and tools that provide more granular information about skills (e.g. taxonomies) and that can be used to gauge individuals’ competences more accurately (e.g. skills-based assessments), matches between people and jobs can be improved. The skills-first approach bridges the gap between workers and employers by aligning labour market supply and demand by emphasising practical, job-relevant skills. When implemented effectively, it also broadens opportunities for diverse talent pools, fosters inclusivity, and addresses skills shortages in rapidly evolving industries (OECD, 2024[7]).

The use of skills-first practices is gaining traction. For example, in the United States between 2017 and 2020, significant structural degree resets have been undertaken by employers across occupations such as paralegals and legal assistants, transportation supervisors and e-commerce analysts; degree requirements have decreased by 16.9%, 23.5% and 23.3%, respectively. A structural degree reset is indicative of a persistent trend over time – it differs from a cyclical reset, in which requirements may be temporarily removed or added as a direct result of labour market tightness or looseness – and is more likely to be permanent (Fuller et al., 2022[8]). The uptake of non-formal forms of learning can also be observed, as over 1 million microcredentials have been issued in the United States in 2022 alone (Credential Engine, 2022[9]).

However, there is still little systematic evidence on using skills-first practices in different countries, what the opportunities and challenges are, and how public policies can address implementation gaps and maximise their potential. This report provides a comprehensive analysis of skills-first practices through an international lens, combining granular labour market data and LinkedIn information, policy evaluations, and case studies. LinkedIn is one of the largest professional social networking sites, with more than 1 billion individual user accounts across 200 countries and economies (LinkedIn, 2025[10]); data from the platform on how individuals are signalling their skills, as well as how employers are searching for candidates, was analysed as part of this project.

This report provides a cross-country perspective on the implementation of skills-first practices, the extent to which skills signalling influences hiring practices and labour market outcomes, and what opportunities and challenges are for job seekers and employers. By integrating real-time insights from digital labour platforms with qualitative policy analysis, the report offers actionable policy recommendations to help policymakers, employers, and individuals fully leverage skills-first strategies.

The following sections explore these changes, examining how skill needs are shifting, the evolving landscape of learning, and the critical move toward a skills-first focus to address persistent and emerging skills shortages. Together, these insights highlight the urgency of adapting workforce development systems to meet the challenges of a rapidly changing world.

1.1.1. Skill needs are changing

Even before the public release of ChatGPT in November 2022, the digital, green and demographic transitions were reshaping skills demands and the speed with which skills requirements changed. Such change is due to new job profiles emerging, as well as new requirements for existing jobs. For instance, in 2022 in the United States, 37% of the top 20 skills requested for the average job had changed over the previous five years, and one in five skills demanded was entirely new (Sigelman et al., 2022[11]). Jobs like software developer/engineer, digital marketing associate and solar engineer, which are closely associated with these transitions, have experienced substantial shifts in required skills over time. Changes in skills content have not been limited to specific roles but permeate many sectors. For instance, traditional manufacturing jobs now incorporate elements of automation and AI, demanding a new blend of technical and analytical skills (McKinsey&Company, 2018[12]). Similarly, the finance sector is seeing a rise in demand for fintech and blockchain technologies expertise.

Skills requirements are changing at an accelerating pace. In the United States, nearly three-quarters of jobs experienced more significant shifts in skills demand following the COVID-19 pandemic than in the previous three-year period (Sigelman et al., 2022[11]). This rapid evolution reflects the increased reliance on digital tools and remote work solutions that emerged during the pandemic (Espinoza and Reznikova, 2020[13]). This acceleration spans multiple sectors and is not exclusive to advanced and specialised skills. In the European Union (EU), 40% of managers reported that employees’ skills requirements change fairly and very quickly (see Figure 1.1), not only in financial services, but also in areas categorised as personal and repair services (Eurofound and Cedefop, 2020[14]). Basic digital skills are the second-fastest-growing skill group. Compared to 2016 levels, the hours that workers spend exercising basic digital skills will increase by 69% in the United States, and by 65% in Western Europe (McKinsey&Company, 2018[12]). They are also among the most in-demand in Latin America (Amaral et al., 2019[15]).

Figure 1.1. Speed of change in skills requirements, by country

Percentage of workplaces reporting very or fairly quick changes in skills requirements

Note: Figure only includes categories “fairly quickly and very quickly.”

Source: Eurofound and Cedefop (2020[14]), European Company Survey 2019: Workplace practices unlocking employee potential, European Company Survey 2019 series, www.eurofound.europa.eu/en/publications/2020/european-company-survey-2019-workplace-practices-unlocking-employee-potential.

The introduction of generative AI tools like ChatGPT in late 2022 has accelerated shifts in skills demands, particularly in digital literacy, creativity, and adaptability. Evidence shows how generative AI is reshaping white-collar work, automating tasks like content creation and coding while amplifying the importance of critical thinking and emotional intelligence (Zysman and Nitzberg, 2024[16]). Emerging research highlights surging demand for AI-specific skills, such as prompt engineering, ethical AI governance, and natural language processing. Evidence indicates a sharp increase in AI-related job postings across sectors where tasks are compatible with AI capabilities, such as natural language processing, machine learning, and data analysis (Acemoglu et al., 2022[17]). The evidence also highlights a significant displacement effect, where the adoption of AI reduces hiring in non-AI roles while altering the skill composition of job vacancies. These developments underscore the dual challenge generative AI poses: while it streamlines processes, it necessitates urgent upskilling to ensure workers can adapt to the evolving landscape effectively.

Changes in skills needs are particularly pronounced in sectors more affected by digital and green transformations (Ehlinger, 2023[18]), where new technologies and sustainability practices rapidly alter job roles and expectations.

The digital transition has heightened the need for both technical and transversal skills, such as creativity, decision-making and communication (Eurofond, 2022[19]; Green, 2024[2]). From 2019 to 2030, skills in programming, software development, and human-computer interaction are projected to grow significantly (OECD, 2023[20]). The widespread adoption of AI across different sectors and occupations has amplified these shifts in skills requirements (Green, 2024[2]). Likewise, social and emotional skills, such as creativity, problem-solving, and interpersonal relationships, are becoming more crucial (OECD, 2023[20]). This combination of increased demand for technical, social and emotional skills is illustrative of the diverse, skill-oriented labour market of today, where practical experience and interdisciplinarity are highly valued (Jobs for the Future, 2023[21]).

Similarly, the green transition has affected employment opportunities, especially in renewable energy and sustainability sectors. Traditional fossil-fuel industries are projected to see a decline in employment, while demand for workers in renewables and nuclear sectors is rising sharply (OECD, 2023[20]). This transition requires a revaluation of job functions and skills requirements, enabling workers from declining sectors to transition into careers in “greener” areas (OECD, 2023[20]). Job postings in green sectors are increasing rapidly, yet there is a significant skills gap, and worker shortages are pronounced (Vona et al., 2018[22]; Lara, 2025[23]). In 2023, using LinkedIn data, WEF estimated that only 13% of the global workforce possesses the skills needed for green jobs, indicating a substantial gap between the demand and supply of green talent (see Box 2.2 in Chapter 2) (World Economic Forum, 2023[24]), meanwhile, job postings requiring at least one green skill rose by nearly 22% (World Economic Forum, 2025[1]).

At the same time, demographic shifts are compounding labour shortages. Many OECD countries have an ageing workforce, with older workers leaving the labour market at a faster rate than younger workers are entering it (OECD, 2023[25]). In some sectors, particularly those requiring highly specialised skills, retirements are outpacing the development of new talent (International Labour Organization, 2024[26]), exacerbating shortages in industries critical to the green transition. This scenario highlights the demand for green jobs and underscores the importance of exploring skills-based alternatives to effectively address the skills shortages, along with the need for targeted upskilling and reskilling initiatives.

Regardless of the sector, the rapid change in skills requirements is making it more complex for employers to find candidates with suitable skills, calling for alternatives in recruiting and expanding the pool of options. In selected OECD countries, the proportion of employers struggling to fill jobs due to a lack of available talent has doubled in the last decade (see Figure 1.2). This share has even quadrupled in countries such as Ireland, Spain and the United Kingdom. For the case of Japan, long-standing structural labour market challenges, particularly due to its ageing population, labour market rigidities and shrinking workforce, have contributed to a persistently high talent shortage (Jones and Seitani, 2019[27]). To navigate the complexities of evolving skills requirements, proactive strategies are essential to bridge the skilled gap and harness the workforce's full potential. The demand for expertise in areas such as AI, green energy production, and sustainable practices is challenging traditional signals and educational models (Aboutajedyne et al., 2020[28]), and pushing employers towards a more flexible, skills-first approach (Gallagher, 2018[29]).

Figure 1.2. Share of employers having difficulties filling jobs due to a lack of available talent is increasing

Share of employers having difficulties in filling jobs due to lack of available talent, 2015 and 2023

Source: Manpower (2024[30]), Global talent shortage, MPG_TS_2024_GLOBAL_Infographic.pdf; Manpower (2016[31]), Talent shortage survey, www.manpowergroup.co.uk/wp-content/uploads/2015/06/2015_TalentShortageSurvey_FINAL_lores.pdf.

1.1.2. How, where, and what people learn is changing

The skills development landscape is undergoing a significant transformation as lifelong learning becomes a reality, shifting from traditional, structured formal education to more accessible formats, including non-formal and informal training. However, these changes may not happen swiftly enough to meet evolving labour market demands. Training systems are increasingly adopting a learner-centred approach, incorporating methods and technologies tailored to individuals’ learning styles and needs. Formal education, particularly at the higher education level, is becoming more flexible and modular to better accommodate learners’ needs and labour market requirements. For instance, universities such as Arizona State University and the University of Melbourne now offer stackable microcredentials, enabling learners to build qualifications incrementally while balancing work and education (DofE, 2024[32]). Similarly, in Colombia, higher education institutions are strengthening their continuing education divisions by expanding the availability of short training programmes, microcredentials, and macrocredentials, which can also be validated as credits towards university degree programmes, particularly in fields such as information and communication technologies (OECD, 2023[33]).

As new job profiles and skills requirements emerge, participation in learning remains uneven. On average across OECD countries, only around four in ten adults engage in formal or non-formal learning for job-related reasons, highlighting a significant gap in upskilling efforts (OECD, 2023[20]). However, data from the Adult Education Survey (AES) suggest that while participation in formal education remains low (13% of adults aged 18-64), engagement in non-formal (44%) and informal learning (65%) is more widespread. Even among young adults (aged 18-24), who are primarily enrolled in formal education (64%), participation in non-formal training (48%) and informal learning (77%) is notably high. This trend can be attributed to the growing recognition of the importance of lifelong learning and the increasing availability of flexible learning options, which enable individuals to continuously update their skills in response to the rapidly changing demands of the labour market. (OECD, 2023[34]).

Figure 1.3. Participation in formal, non-formal and informal learning among adults

Average for OECD countries participating in the Adult Education Survey

Note: Different shades of blue in the bars refer to different age groups.

Source: Eurostat (2022[35]), Adult Learning Statistics, https://ec.europa.eu/eurostat/web/microdata/adult-education-survey.

Digital technologies have revolutionised how and where people learn, a trend accelerated by the global shift to online learning during the pandemic (OECD, 2023[36]). This transformation has significantly increased accessibility, with 60% of adults in OECD countries now engaging in some form of online learning, up from 36% before the pandemic (OECD, 2023[37]). The flexibility offered by digital platforms has democratised education, enabling individuals to access learning materials from anywhere, at any time. Additionally, the rise in digital learning has supported personalised education, with 68% of online learners reporting that they can now tailor their learning experiences to better fit their needs and goals. Integrating digital tools has also enhanced engagement, with 60% of educators in OECD countries receiving training to incorporate multimedia and interactive content into their curricula (OECD, 2022[38]).

As more individuals turn to these alternative learning pathways, new mechanisms emerge to make learning visible and formally recognised. Alternative credentials and skills frameworks are becoming increasingly relevant (Kato, Galán-Muros and Weko, 2020[39]). Initiatives like the European Digital Credential system allow individuals to obtain and share verified digital certificates for non-traditional education, boosting the credibility and appeal of these credentials (European Commission, 2022[40]). The rise of Massive Open Online Courses (MOOCs) and micro-credentials underscores this trend; between 2019 and 2020, course enrolments increased by 67%, 52%, and 115% on Coursera, EdX, and FutureLearn, respectively (European Comission, 2020[41]). Employers also contribute by providing their certification pathways. For instance, Google’s Career Certificates offer an accessible route into tech roles without a college degree (USNews, 2021[42]), while Walmart’s in-house training academies develop essential skills from the shop floor up (Pierce, 2023[43]). Simultaneously, a growing focus is on social and emotional skills and market-relevant, employability-focused education. Traditional educational pathways are evolving to incorporate practical experience and the advanced social and emotional skills critical for success in the modern workplace (Sánchez Puerta, Valerio and Gutiérrez Bernal, 2016[44]).

1.1.3. Moving towards a skill-focused approach to address skills shortages

Companies are increasingly removing degree requirements from job advertisements to expand the candidate pool and fill vacancies more efficiently. In 2022, the number of roles in the United States that removed degree requirements increased fivefold compared to 2014 (Sigelman, Fuller and Martin, 2024[45]). Data on searches on LinkedIn’s recruiter platform provide insights on the criteria that those looking for workers are using to find them; it reveals that, on average in OECD countries, 16% of searches use education variables (i.e. level of education or specific qualification) as filtering criteria, with 15% focusing specifically on skills, in conjunction with education variables (see Figure 1.4). These search patterns indicate the evolving needs of the modern workforce, where practical, job-specific competencies are increasingly sought after over traditional educational credentials.

Figure 1.4. Recruiters’ search behaviour in OECD countries in 2023-2024

Note: LinkedIn Recruiter search activity in the last two years is considered, excluding searches where industry information was null. The timeframe for this analysis was July 2023 to June 2024. This figure includes searches using education filters, including skills or degrees. Other searches can also be filtered by other characteristics such as occupation, geographical locations, etc.

Source: LinkedIn, 2024.

Several pioneering examples of skills-first practices reimagine how hiring and workforce development practices could look across industries. For instance, IBM has significantly reduced its reliance on traditional degrees, instead focusing on candidates' skills in areas like cloud computing and AI through its own digital badges programme (IBM, 2022[46]; OECD, 2024[7]). Most early examples of adopting a skills-first approach centre around the tech sector for job profiles in which skills assessments are straightforward to implement (such as evaluating the quality of coding skills) and for which skills proficiency is often acquired through informal learning. The public sector is also moving towards this trend; over 20 states in the United States have adopted skills-based hiring practices, removing degree requirements from public sector job descriptions. In the United States, these efforts have unlocked over 550 000 public sector roles for individuals skilled through alternative routes (STARs), rather than a bachelor’s degree (The Volcker Alliance, 2024[47]). These initiatives underscore a broader move towards recognising and valuing the skills and abilities that individuals bring to their roles, beyond traditional educational qualifications.

1.2. What is a skills-first approach to labour market matching?

At the highest conceptual level, a skills-first approach emphasises individuals’ skills rather than how they were acquired. This approach has implications for how all stakeholders in the labour market operate: employers may need to re-think their recruitment and human resource management (HRM) strategies; education providers may need to re-evaluate their curricula, teaching practices, and means of certifying skills; and individuals may need to consider how best to demonstrate their existing skills, and identify the new skills required to navigate evolving labour market demands driven by megatrends (OECD, 2024[7]).

A central goal of a skills-first approach is to enhance the transparency of skills information, making it easier for employers to identify the competencies they seek and for workers to showcase their skills, thereby improving labour market matching (Stephany and Teutloff, 2024[48]). By broadening the types of signals individuals can use to demonstrate their skills, skills-first practices increase opportunities for job seekers. However, this also introduces greater complexity, as both employees and employers must navigate a more varied and intricate signalling landscape.

Policymakers can support the transition to a skills-first approach by reducing this complexity and helping individuals and employers better interpret and utilise skill-based information. The first step in understanding and potentially implementing a skills-first approach is to examine the principles and mechanisms of skills signalling, skills-based hiring, and skills-first HRM. While this approach offers opportunities for improving labour market matching, its effectiveness depends on key implementation factors, including clear skills frameworks, employer engagement, and the ability of individuals to navigate the evolving skills landscape. Chapter 3 explores these conditions and the policy actions that can support a more skills-driven labour market.

1.2.1. Conceptualising skills-based hiring and skills-first human resource management

Employers and their hiring and HRM practices play a significant role in the uptake of skills-first practices. Not only do they incentivise individuals and other stakeholders to adjust their behaviour in response to labour market incentives, but they also shape individuals’ lifelong learning and professional trajectories. A skills-first HRM approach prioritises individuals’ actual skills throughout their tenure in the workplace, ensuring that employees are hired based on their skills and potential to benefit from workplace skills development opportunities. For emerging skills needs – in which existing workers or job applicants may not yet be proficient in – a candidate’s aptitude for learning new skills can also play a role in hiring and talent management decisions. Novel methods of skills signalling may be more effective at conveying individuals’ aptitude to acquire new skills in addition to demonstrating their existing ones (DeMark and Kozyrev, 2021[49]).

Skills-based hiring is a recruitment approach that focuses on matching vacancies with candidates based on the specific skills required for the position, rather than relying mainly on qualifications or previous job titles as proxies for candidates’ skills (Economist Impact, 2023[50]). Traditional hiring practices often assume that holding a degree or a specific job title equates to possessing the necessary skills for a role (Butrica, 2022[51]). Instead, skills-based hiring practices include more direct signals such as using skills-first résumés, job applications, skills assessments, or novel mediums such as social networking sites (SNS), learning and employment records (LER), or digital learning credentials.

Within a broader skills-first HRM framework, the emphasis extends beyond hiring to encompass the entire employee lifecycle. This includes clearly defining and openly communicating the skills required for various roles, as well as recognising and leveraging the skills that employees already possess. Viewing occupations through a skills-first lens enables roles to be redefined as bundles of tasks, each requiring specific skill sets. Consequently, individuals who have acquired the necessary skills through non-traditional pathways are not excluded from the recruitment process based solely on how and where their skills were acquired (Demaria, 2020[52]). Furthermore, this approach underscores the critical role of on-the-job training, making it essential for companies to invest in the continuous skills development of their workforce.

Employers can adopt a skills-first approach in various ways. Large employers may be able to conduct company-wide skills audits to assess current skills demand versus the skills needed for specific roles. This can involve adjusting job descriptions, reducing degree requirements for certain positions, and integrating continuous learning opportunities to upskill existing employees (OECD, 2024[7]).

Small and medium-sized enterprises (SMEs), on the other hand, can adopt a hybrid approach, leveraging external tools and partnerships to guide their transition towards skills-first hiring and HRM across recruitment, retention, and talent development practices. Trade associations and labour unions can assist in defining the skills content of occupations, while managers and HR professionals can collaborate to systematically reclassify jobs based on skills content, offer additional training, and provide résumé assistance to employees transitioning across roles (Huff-Eibl, Voyles and Brewer, 2011[53]).

Public tools, such as the ESCO (European Skills, Competences, Qualifications and Occupations) skills taxonomy or O*NET occupation taxonomy, can support the understanding of skills needs. Implementing a skills-first HRM approach may involve enhancing traditional hiring processes with tools like SNS (Hosain and Liu, 2020[54]), or developing in-house candidate assessment tools that inform application processes and structures (Butrica, 2022[51]).

Beyond recruitment, ongoing talent management practices are key to sustaining a skills-first ethos within an organisation. This includes continuous professional development, mentoring programmes, and career pathing based on skills acquisition. Chapter 3 provides further insights from stakeholders on key considerations for effectively implementing a skills-first approach.

Dimensions and components

Skills-first hiring and HRM encompasses four key components: preparing, sourcing and screening, selecting and hiring, and onboarding and lifelong learning (see Figure 1.5). These interconnected components influence each other through iterative processes shaped by feedback and experience. Experiences from the skills-focused HRM process impact employers’ perceptions and their likelihood of future implementation (Gallagher, 2018[29]). Ongoing commitment and adaptability to these practices are essential for embedding a sustainable skills-first ethos within the organisation (Veldsman and Merwe, 2024[55]).

Figure 1.5. Dimensions of skills-based hiring and human resource management

Source: This figure was created based on the conceptual frameworks of recruitment practices provided in Jain (2022[56]), 360 Recruitment | Six Stages of Full Life Cycle Recruiting, https://qxglobalgroup.com/rpo/uk/six-stages-of-full-life-cycle-recruiting-360-recruitment/; Veldsman and Merwe (2024[55]), How To Build a Skills-Based Organization: 10 Steps for HR, www.aihr.com/blog/skills-based-organization/; and Verlinden, (2024[57]), Full Cycle Recruiting, www.aihr.com/blog/full-cycle-recruiting/. Additionally, findings from the following were used to clarify terms and concepts: Butrica (2022[51]), Skills-Based Hiring and Older Workers, www.urban.org/research/publication/skills-based-hiring-and-older-workers; Burning Glass Institute, (2022[58]), The Emerging Degree Reset: How the Shift to Skills-Based Hiring Holds the Keys to Growing the U.S. Workforce at a Time of Talent Shortage, www.hbs.edu/managing-the-future-of-work/Documents/research/emerging_degree_reset_020922.pdf; Economist Impact, (2023[50]), Bridging the skills gap: fuelling careers and the economy in Asia-Pacific, https://impact.economist.com/perspectives/sites/default/files/bridging_the_skills_gap_fuelling_careers_and_the_economy_in_asia_pacific.pdf; Huff-Eibl, Voyles & Brewer (2011[53]), Competency-Based Hiring, Job Description, and Performance Goals: The Value of an Integrated System; https://doi.org/10.1080/01930826.2011.601270, LinkedIn (2023[59]), Skills-First: Reimagining the Labor Market and Breaking Down Barriers, https://economicgraph.linkedin.com/research/skills-first-report; Roulin and Levashina (2018[60]), LinkedIn as a new selection method: Psychometric properties and assessment approach, https://doi.org/10.1111/peps.12296; and World Economic Forum (2023[61]), Putting Skills First: A Framework for Action, www.weforum.org/publications/putting-skills-first-a-framework-for-action/.

The preparing dimension involves reconsidering fundamental questions and processes within the organisation, such as building consensus and support for a skills-first approach across all levels. This includes consulting internal stakeholders (e.g. HR representatives, managers, team leaders) to understand their needs and the skills requirements of the tasks entailed in vacancies. Taking into account these changing skills requirements, employers need to craft up-to-date job descriptions that accurately reflect the expectations of the role instead of relying on old descriptions that may not accurately reflect the breadth of skills required to succeed (World Economic Forum, 2023[61]; Verlinden, 2024[57]).This dimension enables employers to rethink and reshape the discourse around skills within their organisations. Understanding occupations in terms of skills allows for skills-first practices to be integrated across the entire employee lifecycle, from recruitment to ongoing development (Butrica, 2022[51]).

The sourcing and screening dimension encompasses the initial stages of recruitment, including identifying and utilising effective methods to find and engage with candidates. It involves ensuring that the language used to communicate skills requirements is accurate and reflective of the organisation’s needs (World Economic Forum, 2023[61]). Additionally, it requires making the application process open and accessible to a diverse pool of candidates (Jain, 2022[56]). Oversights at this stage can result in the exclusion of large groups of people from the hiring process. Factors such as language, platforms, filters, search engines, and algorithms can significantly impact who can see vacancies and who is visible to employers through the various layers of the screening process (LinkedIn, 2023[59]). A skills-focused approach in sourcing and screening ensures that recruitment practices are inclusive and effectively identify candidates with the necessary skills, regardless of their traditional qualifications.

The selecting and hiring dimension involves not only the actual decision-making process of who to hire, but also the methodologies employed in making these decisions (Veldsman and Merwe, 2024[55]). This includes clearly defining selection criteria and determining how different skills signals will be weighted in the process. It also involves determining how and by whom these signals will be interpreted (Roulin and Levashina, 2018[60]), deciding how to measure skills proficiency (Butrica, 2022[51]) and identifying the stakeholders involved in final hiring decisions. Intentionality throughout the entire hiring process is essential to ensure that decisions and processes do not inadvertently exclude individuals who signal their skills through non-traditional means (Burning Glass Institute, 2022[58]). This dimension ensures that selecting and hiring practices are aligned with broader skills-focused HRM objectives, promoting a diverse and skilled workforce.

The onboarding and lifelong learning dimension entails broad guidelines for implementing a skills-first approach throughout an employee’s tenure at the company. This begins with clearly communicating tasks and responsibilities to new employees and those they will interact with. It also involves providing training, learning, and upskilling opportunities that reflect a combination of organisational needs, employee interests, and labour market dynamics (Economist Impact, 2023[50]; Huff-Eibl, Voyles and Brewer, 2011[53]; World Economic Forum, 2023[62]). This dimension showcases the importance of on-the-job training and makes it essential for companies to invest in the continuous skills development of their workforce. By prioritising such investments, organisations can foster employee growth, enhance adaptability, and maintain a competitive edge in an ever-evolving market landscape.

1.2.2. Conceptualising skills signalling on the part of individuals

Skills signalling refers to the ways through which individuals demonstrate their skills to employers when applying for jobs (Waldman, 2016[63]). Skills signalling is predominantly concerned with how skills are communicated and recognised; how skills are acquired underpins both elements, though signals associated with places or modes of learning alone become less relevant. At the same time, new and different ways of communicating and recognising skills may influence the skills development opportunities that individuals choose to engage in, highlighting the interconnected nature of skills signalling and acquisition.

While individuals predominantly use skills signals to market themselves to employers during job searches and applications, the adoption of skills-first practices by employers, alongside the impact of megatrends and emerging technologies, has created new opportunities and imperatives for individuals to signal their skills. For example, the growth of passive recruitment – where individuals with highly sought-after technical skills are actively approached by employers – or job insecurity brought about by the decline of certain industries has made ongoing skills development and proactive skills signalling essential for many workers. However, there is a large degree of variation in the types of signals used due to differences in individuals’ preferences, the nature of occupations and employers, and the types of skills being signalled (Blair et al., 2020[64]).

Dimensions and components

The skill signalling process involves two key dimensions: communication and recognition. At the same time, skills acquisition is a closely related process; individuals make decisions about the skills development opportunities to engage in based on communication about and recognition of skills. Likewise, how they signal their skills will be influenced by the means through which they were acquired (see Figure 1.6).

Figure 1.6. Dimensions of skills signalling

Source: This figure was created based on findings from: Baird, Gahlawat, & Ko (2023[65]), Skill Signals in a Digital Job Search Market and Duration in Employment Gaps, https://economicgraph.linkedin.com/content/dam/me/economicgraph/en-us/PDF/skills-signals-unemp-wp.pdf; Blair et al. (2020[64]), Searching for STARs: Work Experience as a Job Market Signal for Workers without Bachelor's Degrees, https://doi.org/10.3386/w26844; LinkedIn (2023[66]), Global Green Skills Report 2023, https://economicgraph.linkedin.com/content/dam/me/economicgraph/en-us/global-green-skills-report/green-skills-report-2023.pdf; Offer (2019[67]), Herbert Spencer, Sociological Theory, and the Professions, https://doi.org/10.3389/fsoc.2019.00077 and World Economic Forum (2023[61]), Putting Skills-first: A Framework for Action, www.weforum.org/publications/putting-skills-first-a-framework-for-action/.

The acquisition dimension concerns the methods through which an individual gains their skills. This aspect considers, for example, the venue of learning – be it accredited universities, technical training institutions, or self-guided online platforms – and the nature of the learning experience, whether through formal education, practical on-the-job training (i.e. non-formal education), or autonomous exploration and study (i.e. informal learning) (See Table 1.1). Choosing the right provider is critical, as the expansion of learning avenues has increased variability in quality. Ensuring robust quality assurance mechanisms and selecting reputable providers are essential for the credibility of skills signals (OECD, 2024[68]).

The communication dimension pertains to the process through which individuals articulate and disseminate the skills they possess to potential employers or other audiences. It encompasses the platforms, tools, or types of documents that are used to communicate information involving, for example, résumés, digital LERs, and SNS. Each of these tools and platforms offers distinct advantages and drawbacks for showcasing skills. The effectiveness of the communication depends on the clarity and precision of the language being used and the appropriateness of the medium of communication for the skills one possesses and the labour market opportunities he or she seeks. One way in which communication can gain in effectiveness is through the use of standardised frameworks or tools, such as skills taxonomies used in specific industries or countries, that strengthen the clarity with which skills are signalled to employers in a language that they can easily understand (World Economic Forum, 2023[61]). This dimension underscores the importance for individuals of not only possessing valuable skills, but also of being able to convey these skills effectively and in a manner that is easily interpretable and is valued by prospective employers.

The recognition dimension concerns validating and verifying the skills communicated by individuals. This dimension involves the validation of skills by authoritative bodies or through professional networks, bridging the gap between skill acquisition and market acceptance. Formal recognition often comes in the form of certifications, licenses, or higher education qualifications, which serve as tangible proof of an individual’s skills, backed by the credibility of the issuing institution. Informal recognition, on the other hand, leverages endorsements from peers, managers, or industry experts, providing a personal testament to the individual’s skills and capabilities, as supported by the recommender’s credibility (Baird, Gahlawat and Ko, 2023[65]).

1.2.3. From signalling based on qualifications to direct skills signalling

Historically, skill signalling in the labour market has focused on the acquisition phase by relying heavily on formal credentials and qualifications to signal skills. This had the effect of using the reputation of an institution or a degree as a stand-in for actual skill mastery. Often, this approach prioritised one type of skill acquisition – formal education – over other valuable learning experiences. Traditional signals, such as educational qualifications, years of experience, career progression, and the prestige of associated institutions, have long served as proxies for skills. While these signals offer general information about an individual’s background, they do not always accurately reflect actual skills (Blair et al., 2020[64]; Butrica, 2022[51]; Liu, 2021[69]). The effectiveness of these signals can, in fact, vary based on individuals’ age, gender, educational attainment, as well as firm characteristics and recruiter profiles (Piopiunik et al., 2020[70]). This can result in missed opportunities and perpetuate biases, favouring those who have had access to certain educational paths or professional networks (Hardy et al., 2021[71]). In turn, employers are left to infer skills indirectly, increasing the risk of mismatches that affect both organisational efficiency and individual career prospects (Green and McIntosh, 2007[72]; Kulkarni, Lengnick-Hall and Martinez, 2015[73]).

Adopting a skills-first approach involves broadening the focus to other ways in which skills are acquired and making the most of new communication and recognition opportunities. New methods of direct skills signalling broaden the scope of how individuals can convey information on their skills. By clearly communicating how skills, acquired through various educational and work experiences, align with evolving market demands, direct skills signalling seeks to reduce biases and enhance the efficiency of matching (Barbarasa, 2017[74]; Gallagher, 2018[29]). Digital tools, standardised taxonomies, and skill-focused résumés empower individuals to showcase detailed information about their skills, improving clarity and accessibility for employers. Though adoption rates vary across countries and demographics, the broader movement towards direct skills signalling reshapes how skills are communicated and recognised in the labour market (see Chapter 2). At the same time, increased opportunities come with new challenges related to how well different actors can navigate the added complexity of the labour market matching mechanisms and systems (see Chapter 3).

Table 1.1. Comparison between traditional and direct skills signalling

Elements and definitions of traditional and direct skills signalling means and tools

Dimension	Traditional skills signalling	Direct skills signalling
Acquisition	Formal learning or formal education is a structured learning process occurring in schools, colleges, and universities, leading to recognised qualifications like diplomas and degrees. It follows a set curriculum and is delivered by trained educators. This education system is age-specific, designed to provide foundational knowledge, critical thinking skills, and prepare individuals for professional careers.
	Non-formal education consists of organised learning outside traditional institutions, without leading to formal qualification. It's flexible and intentional, including workshops, online courses, and community education. This type targets skills development and personal growth, accommodating various interests and vocational training needs for learners of all ages.
	Informal learning is the natural acquisition of knowledge through everyday experiences and interactions, occurring without formal instruction or structured programmes. It emerges from activities like work, hobbies, and socialising, often without the learning being an explicit goal. This continuous, lifelong process significantly influences personal growth, adaptability, and problem-solving skills, integrating seamlessly into daily life.
Communication mediums	Résumés, job applications	Digital learning and employment records, social networking sites, skills-first résumés.
Signals	Educational qualifications Years of experience Job titles	Skills and skills levels linked to definitions in taxonomies, such as ESCO or O*NET, particularly for skills acquired through informal learning. Microcredentials Tasks entailed in previous positions. Course content and syllabi
Recognition	Professional references Institutional reputation Company name recognition Skills assessments	Skills assessments Professional and peer references (SNS) Government validation (LERs) Institutional (ESCO, O*NET, etc.)

Source: Source: Eurostat (2016[75]), Classification of learning activities (CLA) Manual: 2016 edition, https://doi.org/10.2785/874604; OECD (2019[76]), Getting Skills Right: Future-Ready Adult Learning Systems, https://doi.org/10.1787/9789264311756-en; OECD (2021[77]), OECD Skills Outlook 2021: Learning for Life, https://doi.org/10.1787/0ae365b4-en.

1.2.4. Complementary nature of skills-first practices

Skills signalling of individuals and skills-first hiring and HRM are interconnected and reciprocal; individuals need to know what skills they have and how to communicate them, while employers need to see, recognise, and validate them. Moreover, employers need to be able to communicate about their skills needs so that individuals can gauge which skills are in demand in the labour market, and the signals that employers are receptive to.

Employers’ ability to understand and articulate their skills needs influences the types of skills that individuals choose to acquire; at the same time, individuals’ ability to understand employers’ requirements and preferences guides their choices in the upskilling and learning opportunities they engage in. Conversely, the skills available within the labour force shape employers’ expectations and the realistic demands they set for potential candidates. The methods and language individuals use to communicate their skill sets depend on how employers advertise vacancies and the available methods to search for and apply for positions. In turn, being open to the different ways in which candidates demonstrate their skills enables employers to access the broadest candidate pools and access talent that has been overseen by traditional hiring practices The circularity of these processes ensures that the best matches are made and that the most capable candidates are not overlooked due to differences in how they communicate their skills.

The decision to hire an individual serves as recognition of their skills and signalling methods, reflecting the trust that employers must have in the stages and tools in the hiring process. This trust is underpinned by the costs incurred by employers during the hiring and onboarding processes, as they often represent the costliest period of the employee lifecycle. Moreover, the hiring decision embodies employers’ trust in the authoritative bodies and professional networks that have validated the individual’s skills throughout the recruitment process. Individuals must have the information on how they may get their skills recognised and validated to invoke this trust. Skills-first practices not only inform each other in the context of employers and individuals – education providers, trade unions, and other social partners are all affected by changes in these processes (see Chapter 3).

1.3. Emerging trends in the use of a skills-first approach

1.3.1. Trends in recruitment and hiring

Digital platforms like LinkedIn collect and analyse information on recruitment behaviour. Across OECD countries in 2023, searches filtered by skills have become one of the prominent avenues to recruiting personnel – this trend is even more pronounced at the global level. 15% of candidate searches in OECD countries were filtered by skills, 13 percentage points higher than searches filtered by degrees alone (1.7%) (see Figure 1.7). This difference can partly be explained by sample self-selection: recruiters using this service specifically seek to explore the advantages of evaluating candidates beyond traditional skills-signalling mechanisms, such as educational level. This may suggest that employers are still navigating the balance between academic credentials and skills, with many opting to focus exclusively on one or the other, rather than integrating both. As the recruitment landscape continues to evolve, it will be interesting to observe whether the emphasis on skills will eventually harmonise with traditional qualifications, or if skills alone will become the predominant measure of employability.

Figure 1.7. Recruitment searches by type of filter (July 2023 – June 2024)

Note: LinkedIn Recruiter search activity in the last two years is considered excluding searches where industry information was null. The timeframe for this analysis only includes July 2023-June 2024. This figure includes searches using education filters, including skills or degrees. Other searches can also be filtered by other characteristics such as occupation, geographical locations, etc.

Source: LinkedIn, 2024.

The prevalence of skills-focused candidate searches differs across OECD countries (see Figure 1.4). Countries such as Costa Rica (23%), Colombia (19%), and Lithuania (19%) have the highest percentage of recruitment searches that filter solely by skills. In contrast, countries like the Netherlands (7%), the United Kingdom (8%), and Italy (8%) show a lower proportion of searches that filter exclusively by skills. One key factor underlying this variation is the differing role that formal educational qualifications play in labour markets. In countries like Italy, the Netherlands, or the United Kingdom, where regulatory frameworks, licensing requirements, and long-standing professional norms strongly reinforce the value of traditional degrees – especially in sectors such as health, finance, or law – skills-based hiring remains less common (Netherlands Enterprise Agency, 2021[78]). Meanwhile, other countries may place relatively greater emphasis on job-specific skills, driven in part by labour market flexibility, institutional frameworks that facilitate alternative credentials, or fewer barriers related to formal qualification requirements (UNESCO-UNEVOC, 2019[79]; Miller and Guo, 2013[80]). Cultural perceptions of education and the extent to which employers trust or require alternative forms of credentials also play a significant role in shaping these hiring behaviours.

Cross-country variation in the prevalence of skills-based candidate searches may partly reflect structural differences in how digital recruitment platforms are used across labour markets. In some countries, most digital labour market platforms such as LinkedIn are primarily used to fill white collar, credential-intensive roles in sectors such as finance, law or health, while recruitment for trade occupations or blue-collar roles often takes place through other channels (Black, Hasan and Koning, 2020[81]; Matos Serodio et al., 2024[82]). As a result, countries with more limited platform coverage may appear to rely less on skills-based hiring, even if such practices are common in other parts of the labour market. In contrast, in countries where LinkedIn is used across a broader range of sectors, including technical roles, the platform may more accurately capture the extent of skills-based recruitment.

1.3.2. Trends in skills signalling and development

Digital labour platforms are rapidly expanding, transforming how individuals and organisations interact within the labour market (see Box 1.1). A central aspect of this shift is the growing importance of skill visibility, which reflects a broader move towards a skills-first approach in the global job market. Increasingly, individuals are showcasing their skills, and the total number of skills displayed has surged significantly (see Figure 1.8). In OECD countries, while the likelihood of signalling skills remains low, the trend is changing. The traditional preference for degrees over skills continues to create hesitation among individuals to prioritise skill signalling, despite its proven positive effects on labour market outcomes, as seen with digital skills (Bokek-Cohen, 2018[83]). Nevertheless, the chances of skill signalling have steadily increased over the past five years, doubling since 2018, with a notable rise following the COVID-19 pandemic.

This expansion in skills signalling is not only extensive but also intensive. Individuals are listing more skills and doing so with greater frequency, particularly between 2020 and early 2023 (see Figure 1.8). By the first half of 2024, individuals listed an average of 14 skills, a significant increase of four compared to 2018. This shift has led individuals to enhance their digital profiles, ensuring that their skills are visible to meet the growing demand from employers. The changing nature of jobs, particularly in sectors like technology and digital services, has driven the demand for a diverse and specialised skill set. Job roles now often require a blend of technical, analytical, and creative skills, compelling individuals to signal a broader range of skills to remain competitive in the evolving job market (OECD, 2023[20]; Green, 2024[2]). Furthermore, specialised industry skills remain the most frequently signalled. At the same time, there is a growing emphasis on transversal skills – such as communication, teamwork, and adaptability – complementing technical expertise. As companies seek well-rounded employees, individuals are motivated to list a wider array of both hard and soft skills to align with these expectations (Ooi and Ting, 2018[84]; Shillie and Nchang, 2023[85]).

Figure 1.8. Trends in skills signalling in digital platforms

On average, OECD countries

Note: This figure includes the trend of average number of skills that LinkedIn members have added to their profiles at a given time point, conditional on having at least one added skill, and the probability of adding a skill in each month, conditional on having at least one skill they have added in the past.

Source: LinkedIn, 2024.

The surge in upskilling and reskilling opportunities has significantly expanded individuals’ public-facing profiles. The availability of online learning platforms and professional certifications enables individuals to acquire new skills at an accelerated pace, resulting in more comprehensive and frequently updated SNS profiles. In 2021, 46% of adults in OECD countries participated in non-formal education programmes, a (OECD, 2023[86]). Platforms like Coursera, LinkedIn Learning, and Udemy have capitalised on this demand, with Coursera alone registering 189 million course enrolments in 2021 (Coursera, 2021[87]) and LinkedIn Learning facilitating the completion of 7 million courses in the same year (LinkedIn, 2021[88]). Certifications in high-demand fields such as AI, data analytics, and project management provide structured and credible evidence of skills gained outside traditional education systems, catering to the growing need for lifelong learning. Furthermore, informal learning, often in the form of self-directed learning initiatives such as online tutorials and peer learning, plays a critical role in skill development, with 40% of adults reporting informal learning activities annually (OECD, 2023[86]; Fialho, Quintini and Vandeweyer, 2019[89]). In fact, 76% of professionals recognise continuous learning as crucial for maintaining relevance in the job market (LinkedIn, 2021[88]). In fast-evolving sectors like technology, where the demand for AI and cyber security skills is projected to grow by 71% and 96%, respectively, by 2025 (World Economic Forum, 2023[62]), these credentials are particularly valuable.

Box 1.1. The rise and impact of social networking sites on job market dynamics

Social networking sites have seen significant growth in recent years, fundamentally changing the way individuals and organisations interact within the labour market. Platforms such as LinkedIn, Xing, Meetup, and AngelList have become essential tools for hiring, networking, professional development, and exploring new job opportunities. They have also served to signal the skills, knowledge and experience that individuals have and employers require. Their expansion reflects a broader trend in the digital transformation of the job market, driven by advancements in technologies like AI, automation, and remote work tools (OECD, 2023[90]).

The evolution of digital labour platforms has varied across different regions and market segments, with each platform adapting to unique user needs and regional demands. With over 1 billion global users, LinkedIn is leading the space in terms of AI-driven job matching and skills development features. Xing serves over 21 million users, particularly in European markets, by providing localised networking opportunities. Meanwhile, Meetup and AngelList cater to niche audiences: Meetup’s 60 million users focus on event-based networking, while AngelList connects startups with talent and investors globally. These platforms collectively enable flexible work (Rani and Furrer, 2020[91]), continuous learning (Stephany, 2021[92]), global professional connections (Horton, Kerr and Staton, 2017[93]) and more effective alignment between job opportunities and candidates, illustrating the diverse ways they reshape labour market participation.

Source: OECD (2023[90]), Informality and Globalisation: In Search of a New Social Contract, https://doi.org/10.1787/c945c24f-en; Rani and Furrer (2020[91]), Digital labour platforms and new forms of flexible work in developing countries: Algorithmic management of work and workers, https://doi.org/10.1177/1024529420905187; Stephany (2021[92]), One size does not fit all: Constructing complementary digital reskilling strategies using online labour market data, https://doi.org/10.1177/20539517211003120; Horton, Kerr and Staton (2017[93]), Digital Labor Markets and Global Talent Flows, www.hbs.edu/ris/Publication%20Files/17-096_813abb74-09c5-4ea6-989f-5ef03b2d7f31.pdf.

1.3.3. Trend in skills-first approach implementation

OECD countries are at different stages in adopting a skills-first approach, with varying levels of success in aligning the skills-based nature of job postings and jobseeker engagement in direct skills signalling. Figure 1.9 presents how job postings and jobseeker interest in skills-first practices differ across countries, categorising them into three primary levels based on the percentage of job postings that include specific information about the skills sought by the employer: high (70% or more), medium (50% to 69%), and low (49% or less). It also examines jobseeker interest in skills-first postings, ranging from low (5% or less) to high (21% or more). Countries like the United States and Lithuania fall into the “skills-first pioneers” category, where both job postings and jobseekers’ interest in skill-based postings are high. This indicates a strong alignment between employer demand for specific skills and jobseeker awareness, leading to a robust skills-based hiring ecosystem. For instance, in 2022, 45% of employers in the United States explicitly used skills data to fill roles, marking a 12% increase from the previous year (World Economic Forum, 2023[94]). States like Maryland, Colorado, and Pennsylvania are among the rising number of states which have embraced skills-based hiring and eliminated degree requirements for many positions within the public sector (Deloitte, 2023[95]). Similarly, Lithuania’s adoption of skills-based hiring practices is backed by national strategies aimed at enhancing adult learning and vocational education and training (VET) (OECD, 2021[96]). The “Work in Lithuania” initiative includes a platform which helps to facilitate access to job opportunities and create a stronger alignment between jobseeker skills and employer needs, particularly in industries such as information technology, healthcare, and engineering (CEDEFOP, 2023[97]).

Figure 1.9. OECD country comparison of jobseeker engagement and employer demand in a skills-first context

Note: The level of jobseeker interest in job postings that list required skills is measured using the “view-to-apply rate impact (average).” This metric captures the difference in the average rate at which jobseekers view and apply to job postings that include specific skills requirements, compared to those that do not mention any skills. A positive value indicates that jobs with listed skills attract more interest and applications than those without. The level of job posting with skills is based on the metric “percentage of jobs with skills listed.”

Source: LinkedIn, 2024.

Two-thirds of OECD countries have made notable progress in adopting skills-first ecosystems. A big group of countries, including Estonia and France, are identified as “Skills Opportunity Builders” due to their high level of skill-based job postings and jobseeker interest in these roles. In Estonia, employers are increasingly embracing skills-based hiring practices, particularly in the Information and Communication Technology (ICT) sector. In Estonia, the current number of VET and higher education graduates is insufficient to meet the growing demand for ICT professionals (OSKA, 2024[98]). Digital skills certificates have been integrated into formal education and professional training, including short courses, enabling employers to prioritise candidates based on their digital competencies that align with industry needs (Education Estonia, 2022[99]). In France, companies, especially SMEs, have received guidance on implementing skills-based hiring practices (France Travail, 2022[100]). Starting in 2020, as part of the national diversity and equality policy, public sector recruitment guidelines emphasise skills-based hiring practices (Premier Ministre, 2020[101]). In 2024, 67% of employers in France were utilising a form of skills-based hiring, including by conducting skills assessments either before or after the resume screening stage (TestGorilla, 2024[102]). Similarly, countries like Finland and Germany, categorised as “talent-focused growth”, are experiencing high jobseeker interest in skills-based roles, though they show moderate levels of skills-focused postings. The increasing supply of and enrolment in digital and green sector units of qualifications1 in Finland is steering individuals toward applying for skills-based job postings (CEDEFOP, 2024[103]).

In contrast, countries like Chile, Italy and Spain, categorised under “Skills Transition Stage”, show both low levels of skill-based job postings and minimal jobseeker engagement with skills-first roles. This indicates they are in the early phases of adopting a skills-based hiring model with room to develop policies that both encourage employers to adopt skills-first practices and raise individuals’ awareness of skills signalling and engagement with skills-first roles. In Spain, while efforts to enhance alternative training routes are underway, employers continue to prioritise formal degrees, slowing the shift to skills-based hiring. Similarly, Italy's labour market remains anchored in traditional qualifications, particularly in sectors like law, finance and healthcare (OECD, 2019[104]). Chile faces similar hurdles, with job postings largely focusing on educational credentials due to a lagging system for recognising non-formal learning (ILO, 2024[105]). However, as these countries strengthen skills certification systems and upskilling efforts, a gradual transition towards skills-based hiring is expected.

Differences in the uptake of skills signalling practices can also be seen across sectors (see Figure 1.10). For example, industries like Tech, Information, Media, and Professional Services see moderate levels of recruiters searching by skills, with over 15% of searches requiring specific skills and 4.5% of individuals listing skills in their profiles. ICT roles, in particular, rely heavily on platforms, certifications and tools that emphasise skills and experience (Morris, 2022[106]; Van Iddekinge et al., 2019[107]). Individuals working in professional services are also increasingly using AI and automation, further pushing the need for workers to demonstrate digital proficiency (Thomson Reuters Institute, 2024[108]). In contrast, industries like Farming, Ranching, and Forestry and Construction show lower reliance on formalised skills-first practices – not necessarily because formal qualifications are emphasised, but because hiring in these industries often relies on informal networks, prior experience, or on-the-job learning, rather than structured assessments or digital skill signals. These industries prioritise practical experience and on-the-job training over certifications or formal qualifications (Klocker et al., 2019[109]). Additionally, these sectors tend to favour traditional hiring practices, relying on personal networks and recommendations, which reduce the emphasis on formalised skills assessments (Delgoulet, Gaudart and Chassaing, 2012[110]).

In some industries, such as Education and Government Administration, skills-based hiring practices have emerged as a key response to labour shortages and policy shifts aimed at broadening the talent pool. With increasing teacher shortages, particularly in rural areas and small cities and specialised fields, education systems are moving away from rigid qualification requirements and adopting flexible hiring strategies (Goldhaber et al., 2020[111]; Oxford, 2022[112]). In the EU, this shift is especially crucial in high-need areas such as STEM (science, technology, engineering, and mathematics), special education, vocational training, and digital learning, where gaps are most severe (EURES, 2023[113]). Similarly, in Government Administration, skills-based hiring is becoming critical. In the United States, federal initiatives focus on expanding the talent pipeline through targeted recruitment and retention strategies, such as outreach to recent graduates, skills-based hiring for certain roles (Mass, 2023[114]) and skill-focused evaluations (Dougherty and Van Gelder, 2013[115]). As labour market tightness intensifies, European governments are adopting active labour policies centred on skills training and workforce development to enhance competitiveness and meet future demands (OECD, 2023[116]). These approaches not only tackle immediate workforce gaps but also aim to build a resilient public sector capable of adapting to evolving challenges.

Figure 1.10. Industry variations in recruiter skills-filtering and jobseeker skills-signalling across sectors

Average, OECD countries

Source: LinkedIn, 2024.

These sectoral differences underscore the importance of considering the industry composition of digital labour market platforms' job postings when comparing the uptake of skills-first recruitment practices across countries. In countries where digitally intensive industries – such as information and communication technologies or professional services – represent a larger share of postings, skills-based recruitment is more visible due to the nature of hiring practices in these sectors. By contrast, in countries where postings are more concentrated in industries such as agriculture or construction, which typically rely on informal recruitment channels and practical experience, skills-first practices may appear less prominent. As such, cross-country comparisons that do not account for underlying differences in sectoral representation risk overstating or understating the extent to which skills-first practices have been adopted. Adjusting for these structural differences is essential to ensure meaningful international benchmarking.

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Note

← 1.  A “unit of qualification” in the context of Finland refers to a specific module or part of a larger qualification program, allowing learners to complete and gain certification for distinct skill sets or competencies, often within the framework of vocational or professional education.