Despite ongoing economic uncertainty, a quiet revolution is underway in the U.S. labor market. Over the past five years, workers Skilled Through Alternative Routes (STARs) — those without bachelor’s degrees — have reclaimed nearly 10% of the job access they lost over the last two decades.
Opportunity@Work’s State of the Paper Ceiling report shows that STARs are now on track to realize a historic reversal in the long decline of economic mobility for this overlooked talent pool. With more than 70 million STARs making up half of the U.S. workforce — and over 30 million already qualified for higher-wage roles — this momentum signals a significant shift toward skills-first hiring practices, according to Opportunity@Work, a workforce development organization in Washington, D.C.
Skills-first hiring champions believe that skills matter more than where they are attained. And tears in the “paper ceiling” — barriers that prevent career mobility for people without a bachelor’s degree — are showing: More companies are building workforce programs to hire STARs, and 26 states have committed to removing degree barriers and passing skills-first policies.
Toolkit: Transform Your Talent Acquisition Strategy with Skills-Based Hiring
Opportuntiy@Work co-founder and CEO Byron Auguste said he heard a persistent contradiction over the years: employers saying they can’t find talent with the necessary skills, and job seekers saying they can do those jobs, but no one has given them a chance.
“Our research revealed a truth,” he said. “This so-called skills gap is less the cause of employers’ problems and more the consequence of their collective actions. By treating bachelor’s degrees as a prerequisite for skilled employment, employers screen out half the skilled workforce.”
Between 2000 and 2020, a period that coincided with the large-scale adoption of electronic hiring systems, STARs lost 7.5 million good job opportunities, according to Opportunity@Work.
“In the five years since, hundreds of organizations and millions of individuals have taken action to halt that runaway train and begin to get skills-based opportunities back on track, and STARs have regained 783,000 jobs,” Auguste said. “Skills-first hiring is starting to work where and when it is fully embraced.”
Recognizing Progress
Job postings data over the last few years shows a decline in the use of degree requirements for open roles. and 26 states have opened up over half a million jobs to STARs since Maryland announced its initiative to eliminate degree requirements for thousands of public-sector jobs in 2022.
“It’s a tremendous accomplishment,” said Jim Shelton, CEO of Blue Meridian Partners, a nonprofit organization based in New York City that takes an investment-style approach to social and economic mobility.
“The movement has already impacted millions of people,” he said. “Progress has shown where the gateway jobs are. The pathways are clear, and training can be developed in a relatively straightforward way.”
There’s been a remarkable shift in increased awareness from employers over the last few years, said Audrey Mickahail, senior vice president, private sector and membership experience at Opportunity@Work. “We have seen a willingness to consider and hire STARs, the removal of degree screens, and increased mobility for STARs as measured in the proportion of STARs in middle- and high-wage roles, as well as wage gains. The fact that there is now a chorus of organizations in the broader workforce ecosystem talking about the importance of skills and a deeper understanding of skills is part of what will make this movement even more successful.”
According to data from Opportunity@Work, 38% of employers said they are aware of the “paper ceiling” barriers, and among employers who were aware, 83% said they are more likely to hire people without bachelor’s degrees than they were two to three years ago. Among all employers, 92% said they would be interested in hiring people who had acquired skills in ways other than earning a degree.
Continuing that momentum after “picking the low-hanging fruit” is something Mickahail contends with.
“There is some risk of people just anchoring on removing degree screens,” she said. “But we know that any major transformation needs to go way beyond just looking at job postings. Skills-first becoming mainstream is great, but I think we are just maybe clearing the first wave in this movement.”
Awareness to Action
As employers require less convincing to act on a skills-first future, the question is: What to do next? Case studies abound of employers already making positive inroads with skills-first hiring and development.
HII, a defense technology provider as well as the largest shipbuilder in the U.S., based in Newport News, Va., first redesigned a single role — intelligence analyst — to remove nonessential degree requirements.
A cross-functional team reviewed job criteria, prioritized experience over credentials, and piloted new hiring metrics, said Nicole Goldman, vice president of talent acquisition at Mission Technologies, a division of HII. The effort then expanded into broader talent pipelines, including apprenticeships, internships, and internal mobility programs, she said.
Microsoft initiated the Microsoft Sales Academy (later renamed MCAPS Academy), a six-month program to train retail staff in digital sales roles. Instead of relying on degrees or prior tech experience, Microsoft focused on core traits such as service orientation and learning agility, said Todd Minor, general manager and global learning leader at Microsoft.
Candidates were assessed through inclusive practices, trained through a customized curriculum, and supported by dedicated managers whose success was tied to learner outcomes, he said.
Trane debunked the idea that registered apprentices are unrealistically resource-intensive to develop when the heating, ventilation, and air conditioning (HVAC) subsidiary of Trane Technologies created a four-year, paid apprenticeship program that serves as a pathway for on-the-job training and careers as HVAC technicians. The program has scaled from 25 to over 200 apprentices across 30 states.
Opportunity@Work also cited partner organizations such as LinkedIn, SHRM, and Workday for their efforts in advancing skills-first HR.
The SHRM Foundation recently launched the Center for a Skills First Future to equip employers with the tools, resources, and insights to implement and scale skills-first hiring and talent development strategies.
“A skills-first future is not a trend — it’s the direction the workforce is already moving,” said Wendi Safstrom, president of the SHRM Foundation. “Skills-first practices reduce cost-per-hire by up to 30% and cut turnover rates by over 40%. These are compelling data, which reflect real opportunities for employers to build more agile and effective teams.”
Looking toward the future, Opportunity@Work proposed three ways in which the economic mobility of STARs could be significantly improved by 2030:
- Increase hiring rates for STARs across 30 target occupations such as administration, HR, and sales.
- Increase wages in low-wage but highly skilled occupations where STARs are overrepresented, such as in health care and child care.
- Fill roles in emerging fields like AI with STARs.
“There is increasing recognition from employers that they cannot fully lean on traditional colleges and universities to keep up with emerging jobs and pathways,” Mickahail said. “It will require upskilling and reskilling, but with intentional hiring practices, STARs will be well positioned for filling many of these jobs.”
The Intersection of Skills First and AI
Skilling is taking on additional importance as AI introduces massive skills change and potential job displacement.
“AI could exacerbate the problems we already have,” Shelton said. “AI will move the bottom up. Employers will need less people. Technical skills will go first. Employers will be looking for those other durable skills that make people valuable. And we’re not great at measuring the durable skills. How we stay away from creating new proxies for those skills to tie back to the old things we are comfortable with will be something to work on.”
But AI has also been the salvation for implementing skills-based HR at scale. “Ten years ago, no one was talking about skills in this way,” said Chris Ernst, the chief learning officer at Workday.
“Skills is the data currency of work, and skills organizes work in a way that AI can understand. And AI maps skills to things that people want to do, like get a job.”
Ernst said that AI was instrumental in validating job skills for worker profiles—the foundation for conducting skills-based hiring.
“You can still do traditional skills-based hiring with structured interview rubrics and assessments measured against skills without AI, but AI allows you to be analyze every candidate, and match applicants to job descriptions at a scale that was impossible previously,” he said.
Technical skills will continue to matter but human skills like ethical decision-making, relationship building, empathy, and conflict management must be the focus, Ernst said. “Those skills form the basis for not only how we interact with our teammates, but also how we interact with the AI agents that will become part of our team.”