THE STATE OF SKILLS-BASED HIRING 2025

More than half of employers say determining if candidates have the right skills (both soft and technical) is the most difficult part of their hiring process today. Despite the shift to skills-based hiring, teams are still getting to grips with the best way to measure and identify skills.

With the majority of employers still doing a resume screen as a first step in their hiring process, many are missing out on top candidates who don’t have the typecast resume they’re looking for. This is a tangible issue for jobseekers: 59% of them say they have trouble standing out with their resume (and this goes up to 61% for women).

Employers feel like they aren’t getting enough high-quality candidates, with 2 in 10 saying they don’t get enough candidates full stop. But recent research shows that, while employers say a lack of quality applicants is an issue, job seekers say their challenge is a dearth of quality roles to apply to. [2] So which one is it? The problem isn’t a lack of good roles or a shortage of good applicants to fill them; it’s a match-making problem. They’re not finding each other. The real challenge now is connecting the right candidates to the right jobs.

Beyond this, a decline in vacancies is playing a role, especially in the UK. The latest labor market figures show a continued drop in UK job vacancies from January to March  – the 34th consecutive quarterly decline. As a result, more people are looking for work while fewer roles are available. 

This is reflected in the UK’s employment-to-vacancy ratio, which is approximately 2:1 compared to 1:1 in the US. [3,4] This means that there are approximately 2 unemployed individuals per vacancy in the UK (the last time this was the case was in 2017), compared to just 1 unemployed individual per vacancy in the US.

Whilst some sectors are being hit worse than others, almost every UK sector has seen a decline in vacancies. This is contributing to the challenges UK jobseekers are facing and exacerbates the problems outlined above.

The job market is more challenging for Gen Z for a couple of reasons:

1. The “Catch 22” of not having enough experience: Job seekers with limited experience enter a Catch 22 where they’re unable to land jobs because they don’t have the experience required, but are unable to gain that experience without getting a job. This issue disproportionately affects those from poorer socio-economic backgrounds who can’t afford to take unpaid internships. 

2. A competitive entry-level market for graduates: The competition is extreme for entry-level, and particularly graduate, roles. In the UK, it takes graduates an average of 5.6 months to find a job, which is almost 2 months longer than the national average. An entry-level job with minimal qualification and experience requirements takes on average 2.2 months to secure. [5]

These issues don’t exist in a vacuum. With global markets roiling and uncertain times persisting, it’s a nerve-wracking time to be a job seeker at any age or level of experience. Graduate and entry-level roles are primed for skills-based hiring: Experience is scarce in applicant pools for roles of this kind, and employers can break the catch by hiring for skills and potential first and foremost.

Although research into skills-based hiring is raising questions around how companies can prioritize skills most meaningfully, the shift to a skills-first mindset is still very much underway. [1] So, given all the wind beneath the wings of the skills-based hiring movement, why is hiring still so difficult?

UK employers are more satisfied with their hires than their US counterparts

Skills-based hiring continues to bring in good hiring matches for employers. Employers who use skills-based hiring are far more likely to be satisfied with their hires – and 34% of them report being ‘very satisfied’ (vs. only 18% of employers who don’t use skills-based hiring). They’re also more likely to remove degree requirements and more likely to use AI in the hiring process.

When we asked employers if they’re making quality hires thanks to (rather than despite) their current hiring process, 13% said no. This goes up to 20% for employers who aren’t using skills-based hiring.

Finding candidates with the right skills, and validating those skills, is crucial – but lack of motivation is the most prevalent issue for employers. This flags a need for employers to hire beyond skills and experience and look at factors like cultural alignment and behavioral competencies during the hiring process.

Although skills and experience emerge at the top, potential to learn and values alignment aren’t far behind. 

This goes to show that employers are thinking holistically about what makes a great hire. By this logic, they should hire holistically too.

Evaluating learning potential and cultural alignment as well as skills and experience is becoming a critical part of the hiring process. Evaluating learning potential and cultural alignment as well as skills and experience is becoming a critical part of the hiring process. This is especially true in an AI-first era.

With skillsets changing more rapidly than ever before, it’s time for employers to shift to hiring strategies that encompass the whole candidate. The right skills, the right experience, the potential to learn and grow, and alignment with company values and culture – employers know that these 4 things make a great hire. It’s time to build hiring processes that capture all four.

This could be a sign that AI’s hype cycle is peaking. Employers are less likely to be integrating AI for AI’s sake now and are adopting it more thoughtfully and cautiously than before. Employers also have more cause for caution now as legislation and conversations around the ethics of AI develop.

3 in 5 employers are using AI to write job descriptions, with 59% screening resumes and 51% sourcing candidates with AI. Employers are slower to adopt it into the interview process, which is understandable given the greater need for a human touch at this stage.

Despite widespread reports of AI’s impact on hiring speed, accuracy can still be an issue for the tech. Hiring is high-stakes and some human supervision is crucial if employers want to ensure they’re not missing out on great candidates. Without the appropriate level of caution, employers risk exacerbating the exact match-making issue they’re trying to solve with AI. 

With several lawsuits now underway against companies who have integrated AI into their hiring processes unethically, caution is indeed necessary. An increase in AI-related lawsuits may also explain why AI integration has dropped overall this year.

This is reinforced by how long job seekers are spending on their applications in 2025. 55% of job seekers are still spending between 1 and 3 hours preparing their applications, with only 18% spending less than an hour. This number would be higher if more job seekers were using AI to complete their applications. 

AI is saving employers more time than it is jobseekers, it seems. 71% of employers spend less than 15 minutes reviewing a resume. A quarter of them spend less than 5 minutes. Job seekers who send out AI-generated resumes do run the risk of not standing out, so, for those using AI as a starting point, spending extra time sprucing things up does not go amiss.

When we asked job seekers how they feel about employers using AI to screen their resumes (which 59% of them are), we found a mixture of feelings. 29% said they’re worried about it, 27% feel good, and the other 45% are neutral. 

These results reflect sentiments from job seekers online. Neutrality is common and stems from a general acceptance from both sides that AI is part and parcel of the hiring process now, whether they like it or not. It’s a stalemate of sorts: Employers know job seekers will use it, and jobseekers know employers will use it. On either side of that, people are either enthused or worried:

• Job seekers who are using AI for applications are much more likely to feel good about employers using it (52% vs 11%)

• Job seekers who are not using AI for applications are much more likely to feel worried about employers using it (39% vs. 12%)

Just because over half of companies have removed them as a requirement, doesn’t mean that the majority of people think they’re less important. Our data shows the people doing the hiring aren’t necessarily in agreement with company policies that have removed them as a requirement. 

This is a problem because it scuppers the impact of these policies. Most employers are still using resumes and, even if a degree is not listed as a requirement, recruiters can easily discern who does and doesn’t have a degree from their resume. Knowingly or unknowingly this could influence their screening decisions and lead to bias, regardless of company policy on degree requirements.

Employers who use skills-based hiring are more likely to eliminate degree requirements: 55% of skills-based hiring employers have eliminated them, compared to 48% of employers who don’t practice skills-based hiring.

We can see a world where, when they are strictly relevant, degree qualifications sit alongside skills-based data and key experiences as part of a holistic hiring process. One that helps employers understand the whole candidate. Let’s dive into that now. 

Challenges with collaboration and communication are the most common consequence, followed closely by increased turnover and decreased productivity. 

When compounded, the side effects listed represent significant disruptions to both ways of working and productivity. In short, your bottom line could take a hit if you don’t hire holistically.

Why is this the case? Here’s a quick breakdown of the benefits of hiring holistically:

1. Increased engagement and motivation. When you understand the whole candidate, you’re better equipped to set them up for success if and when you hire them. You’ll understand their values, what motivates them, how they like to work, and whether this is the best place for them.

2. Guess what happens next? Higher retention rates. When you hire people who are aligned with your values and culture and understand how to motivate them and let them work, they’re more likely to stay with your organization.

3. Valuable technical skills can be taught. And also, they’re changing fast – the half-life of most skills is decreasing every year. Looking for potential, adaptability, and ability to learn and grow is a good way to broaden your search for talent. Hiring for motivation, intelligence, and adaptability is future-proof. These skills will always be relevant.

We asked about the consequences of ending up in a situation like this. 54% of job seekers who have been in this scenario say they were unhappy in the role. A quarter of them say they left the job entirely.

As the data shows, there are consequences for job seekers and employers alike when you don’t evaluate your candidates holistically.

Here are more stats on how employers feel about skills tests:

Soft skills tests are the most popular test type in 2025. Usage data from our test library shows that soft skills tests are becoming increasingly popular among employers – particularly tests that assess candidates’ personality traits, motivation, and critical thinking skills. For example:

• Our Big 5 (OCEAN) test – which provides insights into a candidate’s behavior, how they relate to others, and their primary strengths according to the five overarching dimensions of personality – was completed over 127,000 times between January-March 2025, a 69% increase on the same time period in 2024

• Our Critical Thinking test was completed over 100,000 times between January-March 2025, a 61% increase on the same time period in 2024

Verifying cognitive ability is also increasingly important to employers, and our data clearly shows the use of cognitive ability tests increasing over time. This year, 1 in 2 employers are using cognitive ability tests to hire.

1. Validate skills before screening resumes: 36% use skills tests before screening resumes (62% use them after, 2% don’t look at resumes at all). Employers who use skills tests before screening resumes are more likely to make quality hires (96% vs. 87%).

2. Make it multi-measure: One-third of employers are using multi-measure testing. 91% of employers who conduct multi-measure testing say they’re making quality hires thanks to this process.

Multi-measure testing gives you the most accurate picture of a candidate’s strengths and weaknesses and predicts their job performance using those measures. It’s research-backed: It’s empirically proven that it offers the most effective and reliable way of assessing a person’s capabilities for a specific job.

Finding the right software and tools is a problem. Hiring budgets are getting tighter. Only 26% reported lack of budget as a problem in 2024, and this has increased twofold. The challenge for employers now is less about knowing which assessments to use, and more to do with finding the tools and budget to implement them.

In addition, 84% of the employers we surveyed say building an inclusive culture is important to their company. This is slightly higher for UK employers (87%), and slightly lower for US (81%). Again, a greater percentage of skills-based hiring employers say building an inclusive culture is important:

• 87% of employers who hire for skills say building an inclusive culture is important to their company, compared to 70% of employers who don’t

Support for diversity and inclusion is strong – especially among employers who recognize, and practice, the need to put skills first.

In his view, ‘equity’ just isn’t a hill worth dying on. [8]

As experts begin to envisage what that might look like, one thing is crystal clear. However DEI evolves, there’s a place for skills-based hiring. It continues to be a way for employers to build fairer hiring practices that promote equality of opportunity and give all candidates a fair shot at landing their dream job.