Skills or Pedigree… Which should you hire?

Evan Rodd, PayScale

According to PayScale’s 2014 Compensation Best Practices Report, hiring and talent retention are hot topics this year for companies of all shapes and sizes. In an effort to balance compensation budgets and navigate the widening skills gap, hiring managers, recruiters and company leaders are starting to reevaluate the criteria many have traditionally relied on.

When budgets are volatile, costly hiring mistakes are probably at the bottom of your list of priorities, and it seems a push towards hiring for skills is starting to become the norm. This is also impacting the way companies evaluate a candidate’s educational background, as college pedigree and major begin to hold less influence on hiring decisions. In PayScale’s 2014 Compensation Best Practices Report 40% of respondents stated that previous work experience is one of the leading factors that impact hiring decisions, and 31% reported skill set as one of the main concerns. Furthermore, 71% of respondents reported school reputation as the least important factor.

Google helped start this trend when they spoke of hiring for “Intellectual Humanity” and a push towards a focus on skills more than credentials. “It could be that higher education is really not preparing people at all and we have a broken system, or just a fundamental misunderstanding. Either way it’s a tragedy, and either way we need a dialogue about how to change,” said Brandon Busteed, the executive director of Gallup Education during an interview with Quartz.


This is important information to consider when the time comes to evaluate your compensation budget. While top companies and industries like professional services and finance still tend to favor top schools, the Gallup survey also notes that some recent graduates report feeling underprepared for job requirements. Larger companies should also take note that many small and medium-sized organizations are looking at an increase in revenue and growth, which can be attractive to highly skilled job seekers, or even some of your highly skilled employees.

Whether you’re evaluating new candidates, or deciding how to spend your increasing budget, make sure you have the proper data to inform your decision-making process. It could make all the different in your bottom line, as well as the tenure of your most valued employees.

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