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Companies have been trying to get skills-based hiring right for years. They’ve removed degree requirements. They’ve looked beyond pedigree experience. They’ve tried to quantify and measure skills. Yet the needle has barely budged. A 2024 report by The Burning Glass Institute found that even though many companies have removed degree requirements, this has resulted in a 0.14% increase in hiring of candidates without degrees. 

But what if the key to unlocking skills-based hiring and creating a more equitable labor market is AI? 

“Imagine a world where hiring isn’t bound by pedigree, but fueled by skills and potential,” said Ashley Kennedy, managing staff instructor at LinkedIn Learning, “where talent pools expand to include those historically overlooked, and where equity isn’t just a goal, but a reality.”

Ashley shared this vision in Linkedin Learning’s new course, Embracing AI to Transform Hiring and the Labor Market, which is unlocked and can be taken for free in perpetuity. In the course, she moderated a lively conversation between Aneesh Raman, LinkedIn’s chief economic opportunity officer, and Papia Debroy, chief impact officer at Opportunity@Work. They discussed a range of AI-infused topics, from how this emerging technology can support skills-based hiring to how it can be used for career navigation. 

Let’s look at what they had to say.

The world of work as we know it is broken

As they embarked upon their conversation, Ashley, Aneesh, and Papia agreed on one thing: The current labor market is broken. “In conversations about AI and work,” Aneesh said, “we skip over what’s broken about today and just get worried about what’s going to change.” 

Aneesh explained that from the plow to the steam engine to the internet, work has always been more about technology than humans. As a result, Aneesh said, it became “explicitly exploitative.” After a number of safety measures were enacted — child labor, for example, was abolished in most places — what has emerged is what Aneesh calls the “pedigree labor market,” in which the key signifier for hiring is a four-year college degree. 

“The labor market now,” he said, “is one of the least transparent, least dynamic, least efficient, least equitable markets humans have ever created.”

Papia agreed, saying that out of the 140 million workers in the U.S. labor market, only 60 million have a bachelor’s degree. But another 70 million are skilled through alternative routes, a group that Opportunity@Work calls STARs. “It’s interesting because when we require a degree for a job in the U.S.,” Papia said, “we automatically screen out 80% of our Hispanic workforce and more than 70% of our Black, rural, and veteran workforces.” 

Here’s an even starker number: It can take a STAR 30 years of working to begin earning a salary equal to what an employee with a bachelor’s degree earns on their first day. “That’s a profound level of inequality and it’s actually new to this generation,” Papia said. “And so, if we think about what it looks like to move to the type of world where we actually value skills, workers should be able to translate their learnings — wherever they’re gained — into earnings.” 

We’re in a time of disruption and change 

One way that AI differs from past technological innovations, Aneesh said, is that it’s coming from the bottom up. While leaders are still forming policies for generative AI, employees are already using the tool, giving them access to skills and knowledge like never before. They’re better able to understand the skills they have; how those skills might be transferable to other roles; and how best to navigate their careers. 

Papia sees a real opportunity in this. “We did some work a few years ago to quantify the untapped potential across the U.S. workforce,” Papia said, “and what we found was that there are more than 30 million workers who have the skills already to make a transition to a significantly higher wage job.” 

AI can help identify those skills. It can also help workers upskill where needed. Someone who works as a bank teller, for example, could use AI to determine what they need to learn to become a loan officer, leading to a big jump in their income. Likewise, a delivery truck driver could explore how to move into supply chain logistics. 

Aneesh said he believes that a skills-first labor market is becoming more and more inevitable. But at the moment, we’re in a period of change. According to Aneesh, all great change has four phases: 

• Disruption — ChatGPT bursts onto the scene in late 2022 and companies start scrambling to understand generative AI.
• Jobs begin to change — LinkedIn data shows that 70% of the skills for the average role will have changed between 2015 and 2030.
• New categories of jobs emerge — For example, LinkedIn’s Work Change report notes that head of AI roles in the U.S. have tripled in the past five years, and more new job titles are on their way.
• We’re in a new economy — This will be an economy in which human skills, Aneesh predicted, will be far more valuable than those required to do mundane tasks. 

Despite these four stages sounding so neat and tidy, Aneesh cautioned that the transformation won’t be easy. “It’s still going to be really hard,” he said, “and it’s going to be really messy for the people who are going through it.” He added that employers, governments, and educational institutions can make it easier by helping people understand what skills they need and how to get them. 

AI can help employers reduce bias and hire for skills

“The issue we’ve always had with this idea of a skills-based labor market,” Aneesh said, “is how do you scale skills as something that a hiring manager or recruiter can filter for with the same ease that they can filter for credentials?” 

AI can help. It can close the economic and opportunity gap by filtering resumes and LinkedIn profiles for skills. It can help write job descriptions based on the skills needed for a job. And it can infer skills from candidates’ previous jobs in a nonbiased way. 

It can also fuel apps like STARSight, which was created by Opportunity@Work in collaboration with several other organizations. STARSight aggregates the latest national labor market data on the 70 million STARs and provides a complete picture of regional talent pools, so employers can see what kind of skills they have in their communities and how that might compare with other regions in the country. 

If a company wants to hire an industrial engineer, for example, STARSight might show them that 20% of industrial engineers in their region don’t have a college degree. “It allows you,” Papia said, “to start to think about skills as a currency to fill that role.” 

In the U.S., the public sector has led the way with skills-based hiring. “They’re facing a real crisis in the form of a silver tsunami they see coming,” Papia said, “and I think a lot of them are conscious of wanting to represent the regions they’re in.” Two years ago, the state of Maryland removed degree requirements from half its jobs, and 25 states have since followed suit. In total, Opportunity@Work has found, 500,000 state jobs no longer require degrees.

AI can unleash human potential at work 

Aneesh said that the biggest signal that an organization is “ready to go” with AI and skills-based hiring is that their chief technology officer and chief people officer are overseeing the AI strategy together. He also noted that if an organization’s AI adoption has been slow, it could be that the company needs greater clarity about what they’re trying to achieve. 

Yes, AI can take over mundane tasks and create more efficiency. “But then what does that mean for what work is going to become?” Aneesh asked. “That’s where you need to have your talent folks in on the conversation.”

When the talent team gets involved, he said, they can start mapping out an entirely new way to work. “We’re looking at flatter organizations and blurred lines between functions,” Aneesh said. “The role of the people manager is about to fundamentally change from managing the tasks of people to managing people as humans.” 

Already, LinkedIn’s Hiring Assistant has begun to help recruiters work in a different way, relieving them of tasks such as synthesizing job descriptions, searching for candidates, and doing basic screening calls. This frees them to do the work they love: connecting with candidates and guiding managers toward great hires. 

What’s more, LinkedIn’s Hiring Assistant is backed up by LinkedIn platform insights of 1.1 billion members, 68 million companies, and 41,000 skills. This allows it to provide candidate recommendations based on skills, rather than traditional proxies such as where someone went to school or the companies they previously worked for. 

Aneesh predicted that, by freeing workers from mundane tasks, the economy will shift from one focused on efficiency to one focused on innovation. “AI can process,” he said, “and humans can pioneer.” He pointed out that humans have come up with big ideas like the steam engine and the theory of relativity. With AI’s help, we can now also think bigger about what an organization can do, solving problems related to healthcare, climate change, and creating a more equitable labor market. 

Talent leaders will be essential to this transformation. “You’ll be hiring for unique, credible experience that people have, based on their lived and learned experience,” he said, “and talent leaders will be the ones that make this better world of work emerge.” 

To learn more, watch Embracing AI to Transform Hiring and the Labor Market.

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