Skills Over Degrees: A Practical Guide to Skills-Based Hiring for Small Business

Oct 23

The short answer: Skills-based hiring means deciding who to hire based on the hard skills, soft skills and real experience a role requires, not on whether a candidate holds a degree. At On Call COO, Melissa Franks advises owners to define the skills and outcomes first, then look at work, life and academic experience together. Degrees still matter for licensed professions like medicine, law and accounting.

You have a role to fill, a stack of applications, and a job description that says "bachelor's degree required" because that is what it has always said. Meanwhile, some of the most capable people knocking on your door are early in their careers, grew up with technology in their hands, and chose to go straight into the workforce instead of college. Do you pass them over, or do you take the time to talk to them?

I'm Melissa Franks, founder of On Call COO, a former COO at a Fortune 500 company and a high-growth tech startup, and host of The Optin Podcast. I was recently interviewed by a news network about new workers entering the workforce and whether advanced degrees are still necessary, and this episode breaks down what I shared: how to define the skills you actually need, how to evaluate lived experience, how younger workers think about careers and pay, and why a multigenerational team may be exactly what your business needs.

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Are Companies Really Hiring for Skills Over Degrees?

Yes, and they have been quietly doing it for decades. What is new is that businesses are finally saying it out loud. For years, companies have leaned less on the degree and more on experience; they just never updated the job posting to reflect it.

Part of the reason the conversation is getting louder is that many of the hard skills businesses need right now cannot be taught in a classroom yet. AI tools, social media and modern marketing move too fast. By the time an institution builds a course, the tools have changed before students ever get there. So the real question is not "do I need a degree?" It is "how much experience does this person need, does life experience count, and which skills am I actually hiring for?"

What Skills Do You Actually Need Before You Hire?

Start by naming the hard skills and soft skills the role requires, along with the outcomes the person will drive, before you think about credentials. Most owners skip this step and write a job description that is really just a list of tasks they want off their plate.

Here is a scenario I see often. I was recently talking to a client who wanted to add a role to a team that was already fairly large. I asked what that person would do all day, and the answer was, "They're going to take half of this other person's job." When I asked what results or outcomes that new person would drive, I got blank stares. We spend so much time on what we need someone to do that we forget to ask why, how it fits into the bigger ecosystem, and how long we actually need it. Sometimes the capacity crunch you feel is temporary, and a temporary problem should not be solved with a permanent hire.

1. Define the outcomes, not just the tasks

Ask what results this person will be responsible for and how the role connects to the rest of the business. If you cannot describe the outcome in a sentence, you are not ready to post the role.

2. List the hard skills

Hard skills are the technical abilities the job requires. Does this person need to use AI tools, scheduling software or project management platforms? Do they need to write really well?

3. List the soft skills

Soft skills describe how a person shows up. Do they need to be influential or able to negotiate? Calm under pressure? Able to deliver fast results? Should they be risk averse or risk forward? Outgoing, or someone who prefers to sit at their desk and "turn and burn" work without talking to anyone for three days? Think about the nature of the work, then the nature of the human who needs to do it.

4. Then decide how much experience you need

Only after you know the hard and soft skills should you ask how much experience the role requires and whether a degree is truly necessary or a work experience equivalency will do. As you peel back the onion, you will often find the degree carries less weight and the experience carries more.

Does Lived Experience Count as Real Experience?

Often it does, and sometimes it counts for more than a degree. Lived experience is the skill and judgment a person builds by actually doing something over a long period of time, whether or not anyone paid them or gave them a credential for it.

I have a senior in high school, so I have been reading a lot of college application advice lately. One thing experts recommend is that students use their lived experience to communicate their expertise. Here in California, there are many families where the parents may not speak English and the child is bilingual. That child may spend a decade going to the bank, the doctor's office and school meetings with their parents, translating back and forth so everyone has the right information. On their application, they can honestly say they have 10 years of experience as a translator.

If your company needed a translator, wouldn't you want someone with 10 years of experience? Of course you would. That 18-year-old did not need to go to college to become a translator. They spent 10 years earning the equivalent of a PhD in translation. If you need someone to translate your written English into Spanish for a new market, they are the most qualified person for the job.

How to assess candidates with a 360-degree view

When you evaluate candidates, gather information from three places: their life experience, their work experience and their academic experience. Put those together and you get a complete picture of how the person works, what they know how to do, how long they have been doing it and where the gaps are. That is the secret to finding the right fit for your business.

When Does a Degree Still Matter?

A degree still matters in licensed and highly technical professions, and it can also be a useful signal of soft skills for early-career candidates. I want my doctor, my CPA, my lawyer and my scientist to have all of the degrees. Plenty of professions require education beyond high school, and nothing about skills-based hiring changes that.

I also believe many younger workers benefit from some post-high-school education. Many of today's college students and new workforce entrants are children of the pandemic. They lived formative years through screens, and that shaped how they learned to interact with people. College, especially for students who move away, teaches time management, problem solving, budgeting, conflict resolution, negotiation and critical thinking. It is an incubator where they can try, fail and get back up.

When a young person goes straight from living at home to the workforce, those skills can be missing, and that can be overwhelming without structure. They may spend their first paycheck in a day, or quit because they do not know how to work with a colleague they do not get along with. Right now, time spent in higher education is often the only signal we have that someone did that work. It can absolutely be learned elsewhere, including trade schools and early jobs, so instead of writing "degree required," I encourage employers to write the specific skills and lived experience they require.

How Do Younger Workers Approach Their Careers Differently?

Younger workers are less focused on climbing the ladder and more focused on liking their work, liking their team, sharing the company's values and being paid for their outcomes. Understanding that shift is the key to hiring and keeping them.

Prior generations, including mine, focused first on getting the job and then on how long it would take to get promoted. This generation asks a different question. When they stop liking what they do, who they do it with, or the values of the business, they move on. They are not hopping around because they are flighty or entitled. They have a boundary: if they are going to work, they want to enjoy it and be paid what they believe it is worth. It is less "I have been here three years, promote me" and more "I have delivered these outcomes, pay me for them."

What to do when pay expectations do not match

This is where friction shows up. Younger workers often have an idea from the internet about what they should earn, but they have not been in the game long enough to see how their output is valued. They do not see that if you pay them a certain amount, everyone who has been there longer and has a bigger impact also needs to earn more.

Instead of getting frustrated, treat it as an education opportunity. It is not about "earning your stripes" or "doing your time." Explain how their contribution compares to the whole. For example, if someone says, "I have been editing videos for 20 years, so pay me like it," you might respond: "Video editing is absolutely part of your job, but so are these other responsibilities, and you have been doing those for two years, so we have to consider both. Here is the number." Use all the words. If you do not walk them through the logic, they will never learn it, they will feel devalued, and they will quit.

When you show that you care about what they care about, they will be loyal, trust you and buy into what you are asking of them. You will think they should already know this. They often do not, so overcommunicate.

Why Is a Multigenerational Workforce So Valuable?

A multigenerational workforce combines the judgment of experienced people with the fresh eyes of new ones, and that combination is how real improvement happens. Younger workers bring new ideas, new skills, innovation and healthy disruption.

When I worked at a technology company inside a conservative financial services business, I brought in as many interns as I could every summer, sometimes as many as 10. They asked "why?" over and over, like a three-year-old, and it was the best disruption we had all year. One summer, a developer told us in an internal meeting that after explaining our systems to two interns, he went home and questioned whether we were doing anything correctly. Saying it out loud made him see how convoluted the process was and how much risk was built into all the manual touch points.

That is what a younger hire can do in your business. They may drive you a little bananas and frustrate the team, but they can also act as a magnifying glass that reveals when it takes seven people to do something that does not need seven people. They will take more of your bandwidth, but they will also bring new ideas, thought patterns and skills. If you are not evolving, you are dying, and sometimes the best way to evolve is through your people.

Key Takeaways

Skills-based hiring means choosing candidates based on the hard skills, soft skills and experience a role requires rather than on a degree alone.
Before writing a job description, define the outcomes the role will drive, not just the tasks you want off your plate.
A temporary capacity problem should not automatically be solved with a permanent hire.
Lived experience, like a bilingual child translating for their family for a decade, can be more relevant than a formal credential.
Evaluate every candidate with a 360-degree view of their life, work and academic experience.
Degrees remain essential for licensed professions like medicine, law, accounting and science.
Younger workers want to like their work, their team and the company's values, so clear, transparent conversations about pay and impact are essential to keeping them.

Frequently Asked Questions

What is skills-based hiring?

Skills-based hiring is an approach where employers choose candidates based on the specific hard skills, soft skills and experience a role requires instead of relying on a college degree as a filter. It starts with defining the outcomes a role should deliver. Then employers evaluate candidates' work, life and academic experience together to find the best fit.

Do employees need a college degree to succeed in a small business?

For many small business roles, a college degree is not required to succeed, especially when the needed skills involve fast-changing areas like AI, social media or digital marketing. What matters most is whether the person has the right skills and enough relevant experience, which can come from work or life. Degrees remain necessary for licensed professions such as doctors, lawyers and CPAs.

How do I write a job description based on skills instead of degrees?

Begin by writing down the outcomes the role will drive and how it fits into the rest of the business. List the hard skills (such as tools and technical abilities) and the soft skills (such as negotiation, composure under pressure or working independently). Then define how much work or lived experience is needed, and replace "degree required" with those specific requirements.

How should I handle salary expectations from Gen Z employees?

Gen Z employees often base pay expectations on information from the internet without seeing how their output compares to the impact of more experienced team members. Instead of getting frustrated, explain your reasoning clearly: what parts of the role they are experienced in, where they are still growing, and how that shapes the number. Transparent conversations about pay help younger workers feel valued and make them more likely to stay.

When should a small business get outside help with hiring and team structure?

It makes sense to bring in outside operations help when you keep adding roles without clear outcomes, when you are unsure whether a capacity gap is temporary or permanent, or when hiring decisions are eating up your time as the owner. A fractional COO can help define roles, set up a consistent hiring process and build a team structure that supports growth. This is especially useful when the business has outgrown informal, founder-led hiring.

Need Help Hiring for the Skills Your Business Actually Needs?

Most hiring mistakes I see do not start in the interview. They start much earlier, with a job description built around tasks instead of outcomes, or a new role created to solve a problem that was only temporary. At On Call COO, we help small and mid-sized business owners get clear on the roles they need, the skills that matter and the team structure that supports where the business is going.

If you are about to post your next role, or you are not sure whether you need a new hire at all, let's talk it through together. We will help you build a hiring approach that finds the right people, whether they come with a degree, years of lived experience or a fresh perspective that challenges how things have always been done.

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