When Massachusetts governor Maura Healey in January signed an executive order enacting the “Lead by Example” employer talent initiative, it marked the latest step in a growing movement, one that is gaining acceptance as the new standard in talent acquisition: skills-based hiring.

The order will prioritize job candidates’ skills, knowledge and abilities over

higher-learning degrees and similar credentials. Often associated with the private sector, skills-based hiring is also reshaping how public organizations seek out, screen and hire new talent.

Because few employers match the size of the U.S. government – which accounted for

2.95 million workers, as of last September – perhaps no entity is more likely to benefit more from a wholesale shift to skills-based hiring. What might the federal government be able to learn from smaller-scale initiatives such as “Lead by Example”? How might it need to adapt its approach? Let’s consider how skills-based hiring at the federal level could be a boon for both the American worker and Uncle Sam.

Better, more equitable worker opportunities

 For employees, the most significant benefit of skills-based hiring is a pretty straightforward one: reduced bias in the hiring process. Particularly at a time when the prevailing winds may be shifting in the opposite direction – last year the U.S. Supreme Court struck down affirmative action admission practices at colleges and universities – a huge swath of overlooked and excluded American workers should welcome any development that promotes an equitable, merit-based hiring market.

To be clear, skills-based hiring is more than a diversity, equity and inclusion imperative. Its focus is to connect the right candidate with the right job and employer, regardless of the nature of any potential biases. As Massachusetts Lieutenant Governor Kim Driscoll says of her office’s “Lead by Example” initiative, “Our administration recognizes that job applicants have a wide range of skills and that nobody can be reduced to a line on a resume.”

When those applicants are ultimately hired – based on skill or experience, rather than education – they tend to thrive. According to the Harvard Business School: “When workers without a [bachelor’s degree] step into a role that previously required a degree, they experience on average an approximately 25% increase in salary, amounting to over $12,400 in incremental earnings per year.”

Skills-based training can help qualified workers tear through the so-called “paper ceiling,” overcome racial, gender and similar biases, and even surmount more personal challenges (such as interview anxiety). It offers the promise of higher salaries, not to mention the pension and security that attract many job candidates to government work. If any employer has an obligation to mobilize, without bias and with purposeful inclusivity, a workforce representative of its full pool of hiring candidates, isn’t it the United States government?

Improved hiring for the federal government

 Most Americans are keen to know how their hard-earned tax dollars are earmarked, and whether they’re being used appropriately. This, in many ways, pushes the stakes even higher for the U.S. government and its policymakers than for typical employers. So when the prospect of the federal government adopting a skills-based-hiring approach is raised, the question that follows can’t be ignored: Does it work?

The simple answer is a resounding yes – with one caveat. For a variety of reasons, employers are struggling to keep up with their growing and changing workforce needs. Boston Consulting Group points to, as an example, technological advances such as artificial intelligence, which demands increased levels of skill-building and task-specific training from workers. Yet even candidates who theoretically have received the most up-to-date preparation in the job market are leaving employers wanting.

Citing research from the Pearson Business School, BCG notes that “only 13% of college graduates have the skills needed to start a job right away. Further, 54% of college graduates don’t work in their original field of study, and the jobs that will be available in 5 to 10 years might not even exist today. For all of these reasons, the value of a traditional degree has come into question.”

With more people turning to alternative training methods, demonstrable skills are now more valued than a degree by many employers. And skills-based hiring helps companies connect with and identify the best employees for a given role based on what a prospect can do – not on who they know, a legacy-school degree or a hunch from a hiring manager. That smooth hum you’ll hear is the sound of your tax dollars being efficiently put to work.

Applying skills-based training at the federal level 

We’ve established that skills-based hiring can help ensure equitable, unbiased hiring, leading to a more diverse workforce that enriches a company’s culture, brings more perspectives to bear and ramps up productivity and innovation. It can help bridge the current talent gap, helping employers find more and better qualified candidates. It has even been shown to improve employee retention. Set aside, for a moment, any moral imperative. Skills-based talent acquisition should be a slam dunk for any hiring entity seeking productivity, efficiency and cost savings.

So what’s that caveat? Well, put simply, most employers aren’t very good at it.

“One of the biggest barriers that we see for companies moving to skills-based practices is that they don’t recognize the barriers that they have in place,” said McKinsey & Company partner Bryan Hancock on a recent podcast. “They don’t know how to assess on the other end and they have trouble thinking through this and saying, ‘We do need these soft skills.’”

It’s currently the most popular argument against a skills-based hiring approach: “It’s too hard.” The truth is, an effective hiring program targeting skills over credentials can be relatively straightforward and affordable – particularly when you consider the alternative. The key, according to Harvard Business School, is follow-through: “Despite lackluster progress to date, we find real returns to the firms that demonstrate meaningful commitment to skills-based hiring practice. Our analysis indicates that increasing access can be a win-win for both employers and workers.”

Healey and Massachusetts policymakers seem to understand the task at hand, noting that as part of the state’s new skills-based hiring order, “for the first time, hiring managers will receive training and tools to implement this new hiring strategy effectively.” And with the right methodology and tools in place, scaling up a skills-based hiring program is plenty manageable – which would translate to enormous operational benefits and cost savings for a major employer such as the U.S. government.

In fact, steps are already being taken at this level in support of skills-based hiring. In March, President Joe Biden issued an executive order of investment in registered apprenticeships, described as “an industry-driven career pathway through which employers can develop and prepare their future workforces and individuals can obtain paid training, work experience, progressive wage increases, classroom instruction and a portable, nationally recognized credential.” The president envisions the federal government as a model for skills-based hiring.

This could represent an inflection point. By opening new channels to employment in government programs, more candidates who are passionate about and best understand the work will receive fair consideration. With the right people in the right jobs, government simply works better, meaning that taxpayers will get more bang for their

buck and, as American citizens, we all benefit from smarter hiring and what some might call “a more perfect union.”

Josh Millet is the founder and CEO of Criteria Corp, a talent success company that uses science-backed assessments to help companies mitigate bias and make better hiring decisions.

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