Skills-Based Hiring in 2026: What Employers Can Learn From Competency-Based Hiring
What makes someone qualified for a job: their degree, their previous job title, or their ability to actually do the work?
In 2026, the U.S. Office of Personnel Management (OPM) is continuing a federal shift toward skills- and competency-based hiring. The approach focuses more directly on the competencies needed to perform a job and on assessments that can evaluate those capabilities.
The guidance applies to federal hiring, but it offers a useful example for employers interested in understanding what skills-based hiring looks like in practice.
What is skills-based hiring?
Skills-based hiring focuses on the skills and competencies required to perform a job rather than relying primarily on traditional signals such as educational credentials.
In an April 2026 memorandum, OPM described one objective of its federal workforce modernization effort as expanding competency-based assessments while reducing unnecessary reliance on educational credentials (U.S. Office of Personnel Management, 2026a).
The important word is unnecessary.
The approach does not mean education is irrelevant. Instead, it asks whether a particular credential is actually needed for the work being performed.
What does competency-based hiring look like?
One of the clearest 2026 examples comes from federal IT hiring.
In April, OPM issued new competency-based qualification standards for the federal Information Technology Management Series. OPM also released implementation guidance explaining how agencies can design assessments around competencies identified through job analysis (U.S. Office of Personnel Management, 2026b).
In simple terms, the process starts with the job: What does this person need to know, and what must they be able to do?
Those requirements can then inform how candidates are evaluated.
Why does job analysis matter?
OPM describes job analysis as the foundation of effective merit-based hiring.
Job analysis identifies the tasks involved in a position and the competencies needed to perform those tasks successfully. Those findings can then be used to develop job requirements and assessments that measure relevant candidate qualifications (U.S. Office of Personnel Management, 2026c).
For employers exploring skills-based hiring, this is an important distinction.
Skills-based hiring is not simply about removing degree requirements from job descriptions. It starts with understanding the work itself.
How can skills actually be assessed?
OPM's current federal hiring resources include several ways to evaluate job-related capabilities beyond traditional application materials.
These include:
Structured interviews
Work simulations
Situational judgment assessments
Reasoning assessments
Technical assessments
For example, OPM describes work simulations as exercises in which candidates perform tasks similar to situations they may encounter on the job. This allows candidates to demonstrate relevant skills rather than only describe them on a résumé (U.S. Office of Personnel Management, 2026c).
The appropriate assessment will depend on the job and the competencies being evaluated.
Does skills-based hiring mean degrees no longer matter?
No.
OPM's 2026 guidance specifically refers to reducing unnecessary reliance on educational credentials. It does not say that every degree or educational requirement should be eliminated (U.S. Office of Personnel Management, 2026a).
The more useful question is whether the qualification is genuinely connected to the work.
For some positions, specific education or credentials may be necessary. For others, employers may be able to evaluate whether a candidate possesses the required competencies more directly.
What can employers take from the federal approach?
OPM's guidance is designed for the federal workforce, so private employers should not treat it as a set of requirements for their own hiring processes.
But the approach illustrates a straightforward way to think about skills-based hiring:
Start with the work. Identify the competencies required. Then determine how candidates can demonstrate those competencies.
For employers reconsidering traditional hiring requirements, that may be a more useful starting point than simply asking whether degrees should stay or go.
The bigger question is whether the hiring process is measuring what actually matters for the job.
Putting Skills-Based Hiring Into Practice
Skills-based hiring starts with reaching qualified people and evaluating them based on what the job actually requires.
For employers looking to broaden where they find talent, and for job seekers looking for opportunities where their skills can be recognized, Diversity.com provides a place for both sides to connect.
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Frequently Asked Questions
What is skills-based hiring?
Skills-based hiring emphasizes the skills and competencies needed to perform a job and uses job-related methods to evaluate whether candidates possess those capabilities.
Is skills-based hiring the same as removing degree requirements?
No. OPM's 2026 guidance focuses on reducing unnecessary reliance on educational credentials. Some positions may still appropriately require specific education or credentials (U.S. Office of Personnel Management, 2026a).
What is competency-based hiring?
Competency-based hiring evaluates candidates against competencies connected to successful job performance. OPM's current approach uses job analysis to identify relevant tasks and competencies and inform appropriate assessments (U.S. Office of Personnel Management, 2026b).
What are examples of skills-based assessments?
OPM's current hiring resources include structured interviews, technical assessments, work simulations, situational judgment assessments, and reasoning assessments, among other approaches (U.S. Office of Personnel Management, 2026c).
Does OPM's guidance apply to private employers?
The OPM materials discussed in this article concern federal hiring. They should not be presented as requirements for private-sector employers. They are included here as a current example of how skills- and competency-based hiring is being implemented within the federal government.
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Sources & References
U.S. Office of Personnel Management. (2026a, April 24). Modernization and consolidation of occupational series. https://www.opm.gov/chcoc/latest-memos/modernization-and-consolidation-of-occupational-series.pdf
U.S. Office of Personnel Management. (2026b, April 13). Job aids for the competency based position classification and qualification standard for the Information Technology Management Series, 2210. https://www.opm.gov/chcoc/latest-memos/job-aids-for-the-competency-based-position-classification-and-qualification-standard-for-the-information-technology-management-series-2210.pdf
U.S. Office of Personnel Management. (2026c). Hiring assessments. https://www.opm.gov/agency-services/talent-management-services/assessment-and-evaluation/hiring-assessments/
