NCSL forecast: Skills-based hiring to dominate 2025 over degree requirements
WASHINGTON, D.C., UNITED STATES — The National Conference of State Legislatures (NCSL) projects a transformation in state-level hiring practices for 2025, with an increasing emphasis on skills-based recruitment over traditional degree requirements.
This trend, driven largely by the need to bolster both public and private sector roles, marks a shift in how employers assess qualifications, reflecting an evolving labor market.
U.S. agencies lead skills-first hiring revolution
The persistent workforce shortage, particularly in the public sector, is pushing states to adopt more flexible hiring approaches.
Lawmakers are pushing for the removal of degree requirements in job listings, with an emphasis on non-degree credentials such as industry certifications, apprenticeships, and micro-credentials, which typically require less time and financial investment than traditional degrees.
U.S. federal IT sector pioneers degree-free recruitment
In fact, by summer 2025, the federal government will transition its Information Technology Management series (2210 series) to skills-based hiring principles and practices.
“Skills-based hiring is a key priority, particularly with the emergence of new technologies like AI and machine learning,” said Rob Shriver, Deputy Director of the Office of Personnel Management (OPM).
The push for skills-based hiring extends beyond federal employees to contractors as well. The Department of Energy (DOE) is working to remove degree requirements for some contractor roles.
“Contractors are a key part of our workforce. And as we move towards that skill-based hiring, we need to ensure that the same standards that are applied to federal are also applied to contracts,” said Shila Cooch, the chief information officer at Energy’s Office of Science.
Retiree reemployment gains momentum amid policy changes
A notable trend expected to strengthen in 2025 is the push to bring retirees back into the workforce.
According to T. Rowe Price’s recent Retirement Saving & Spending study, approximately 20% of retirees are currently employed either full-time or part-time, with an additional 7% actively seeking employment. States are increasingly modifying their post-retirement provisions to accommodate this trend.
Meanwhile, a Pew Research Center survey revealed that one in five Americans over 65 were still employed in 2023, marking a significant increase from 11% in 1987. The “phased retirement” approach is also gaining traction as baby boomers and Gen X workers seek greater control over their departure from full-time employment.
NCSL has tracked over 80 bills related to reemployment after retirement in 2024, with more legislation anticipated. A key development is the growing number of states allowing retirees in critical sectors such as education, public safety, and healthcare to return to work without losing their pension benefits.
Enhanced benefits package attracts skilled workers
The forecast also highlights an expansion of employee benefits programs, particularly in mental health care resources and paid leave options.
Public safety workers, for example, are seeing increased access to mental health services, including trauma counseling and classification of post-traumatic stress as a work-related injury.
On the paid leave front, states continue to expand options. Thirteen states and the District of Columbia have already implemented mandatory paid family and medical leave programs, with eight additional states creating voluntary paid leave options through private insurers. This trend is expected to continue gaining momentum throughout 2025 as states compete with the private sector for talented workers.
