Skills-Based Hiring: Progress & Legal Roadblocks

Do college degrees still matter? According to policymakers in California, not always. Late last year, Gov. Gavin Newsom removed degree requirements for nearly 30,000 public-sector jobs. California joined a growing list of states taking bold steps to scrap outdated college-degree requirements for government roles. From Utah to Maryland, governors and legislators are recognizing that actual skills — not diplomas — should determine employability in the public sector.

More than half of the states have moved in this direction, expanding access to opportunity for individuals who gain skills through apprenticeships, boot camps, industry certification programs and other pathways, with implementation support from partners like the Competency-Based Education Network and Opportunity@Work’s Public Sector Hub. Employers, meanwhile, are increasingly following the lead of state governments, with IBM, Walmart and other companies adopting skills-based hiring practices to broaden their talent pipelines.

This shift is long overdue, but a glaring contradiction threatens to stall this progress: outdated regulations for the very training providers that would equip these prospective employees with in-demand skills. To truly build a thriving skills-based economy, states will need to align both demand- and supply-side signals by removing regulatory barriers for non-college training providers.

Many of the same states that have eliminated degree requirements still regulate non-degree training providers offering short-term, workforce-aligned training as if they were traditional college institutions, forcing them to navigate a labyrinth of licensing rules, reporting mandates and financial assurances never designed for their models. The process can create barriers so burdensome that they effectively block market entry. Too often, even programs designed in partnership with industry leaders and demonstrating strong job placement outcomes are unable to operate due to regulatory systems originally built for four-year institutions.

These policies stifle innovation and block residents from accessing high-quality training options that cultivate in-demand skills. As a result, workers are left with fewer affordable pathways to gain the skills employers urgently need and they are forced to spend more time and money pursuing less-relevant credentials.

New York state, for example, prohibits some skills-training providers from offering courses unless the instructors have already taught that exact course for three years. In other words, unless a program has already been approved and is operating, it cannot be approved to operate — a frustrating Catch-22. In Maryland, the first state to embrace skills-based hiring for public-sector jobs, one organization seeking to offer cybersecurity training has been waiting 18 months for approval.

This regulatory contradiction is more than a bureaucratic inconvenience. It is a fundamental roadblock to economic mobility. Outdated accreditation and state authorization frameworks not only stifle workforce readiness and local economic development; they also impose unnecessary financial barriers on workers striving to advance in their careers.

The solution is straightforward. States need to modernize their higher-education authorizing frameworks to distinguish between degree-granting institutions and non-degree training providers. Rather than relying on one-size-fits-all accreditation models, states should implement regulatory approaches that emphasize demonstrable workforce outcomes, employer validation and consumer protections tailored to short-term, skills-based training programs. It makes little sense to change job requirements without also updating the rules that govern how workers access the training needed to meet them.

Removing regulatory roadblocks to non-degree training providers is about more than policy alignment. It’s about empowering workers to unleash their full potential through skills-based training, strengthening local economies and increasing individual earning power in a rapidly changing world. If states fail to act, they risk turning skills-based hiring into an empty promise rather than the transformative workforce strategy it has the potential to be.

Steve Taylor is the policy director and senior fellow for economic mobility at Stand Together Trust, a philanthropy that supports individual empowerment; he is also a board member of the State Council of Higher Education for Virginia. Jonathan Wolfson, the former head of the Policy Office at the U.S. Department of Labor, is the founder and president of the policy strategy consulting firm Wolf & Saber Advising.

Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.