Workday Podcast: Embracing Skills-Based Hiring in the Public Sector

Chandler Morse: What was once an emerging future-of-work concept, the skills-first approach to hiring is now the talent management vision for many organizations. I'm Chandler Morse, Vice President for Public Policy here at Workday. Joining me is Papia Debroy, Senior Vice President and Chief Analytics and Research Officer at Opportunity@Work. For today's Workday podcast, which, fun fact, is being recorded on the Workday Forever Forward bus in Washington, DC, we're going to talk about the momentum behind skills-first hiring and why it's key to growing the future workforce. Papia, Workday and Opportunity@Work, we've had a chance to partner over the years. It's great to see you, so great to have you here. But before we get started, can you share a little bit about the mission of Opportunity@Work and your role?

Papia Debroy: Absolutely. Chandler, thank you so much for this invitation. It's lovely to be here. What a lovely bus you all have. Sure. So Opportunity@Work is a nonprofit social enterprise. We have a mission to increase career opportunities for the more than 70 million adults in the United States workforce who do not have a four-year college degree but who are skilled. They're skilled through alternative routes. That acronym that we use is STAR. We as an organization support employers in both the corporate and the public sector to leverage data about the skills of STARs to actually open opportunities for STARs and unlock this potential that we see in half our workforce. My role there is to oversee our data, our policy, and our research functions. And it's really been a wonderful journey.

Morse: Workday has long been all-in on skills as the lens through which to view the future of work and provide workers and employers the agility they need to adjust to increasingly rapid changes in the workforce. From your view, can you share a little bit more about what drew Opportunity@Work to focus on a skills-based approach to talent specifically?

Debroy: I think, in the field of workforce, we've known for a long time that there's a lot of potential being left on the table in the American workforce. We produced some research a few years ago that actually showed that there are more than 30 million workers who have skills for significantly higher-wage work, 70% more in earnings than they're earning today, if they were to get access and opportunity to those jobs. And I think that's kind of a phenomenal thing to just wrap your head around. There's so much untapped potential. We know that because if you actually study the skills of the workforce and get into what are the skills people are bringing to work every day and how might we think about these skills as transferable to other jobs in the labor market, what you can start to see—and we understood this by studying more than 130 million worker transitions that have been made in the last decade—is that skills are very frequently transferred from one job to another. Most of us actually get our next jobs by using job skills from our previous work, and what becomes very apparent in the data is that there are these natural skills-based pathways in the US labor market where workers take their skills, many times from lower-wage occupations, they translate them into middle-wage occupations, and they experience economic mobility. A lot of that part of what we have historically seen in the data is what is shifting in this environment today. That's why this movement is so critical to actually unlocking opportunity for STARs.

Morse: Now, you and I had a chance to run into each other at the National Governors Association Skills at the State's National Meeting here in DC in April, and I think we both felt like there was a bit of a moment, a bit of a momentous occasion. Starting with my home state of Maryland, more than 20 states have now made progress in removing degree requirements for open roles, which is pretty amazing. I mean, it's spreading across the country. What do you think is behind so many states specifically moving towards a skills-based approach?

Debroy: Yes, absolutely. There are 22 states now that have made the decision to tear the paper ceiling. I think Louisiana is the latest.

Morse: Interesting. That's great.

Debroy: Our policy team has actually worked with 17 of these states, and I think there's a few reasons that have been cited pretty consistently across them. The first is just there are jobs that have to be filled. And I think what many of these governors are recognizing is just how skilled of a workforce we've been overlooking for many of those roles. There is a vast overlooked and skilled population of workers, many of whom could fill these roles. Let's open up that opportunity. I think, beyond that, one of the most consistent things we've been hearing from states is that the public sector seeks to serve their community. That's their mandate, right? And STARs are currently underrepresented in public sector roles. That underrepresentation matters because when we require a degree for a job, we automatically screen out almost 80% of our Hispanic workforce, almost 70% of our black, of our rural, of our veteran workforce. And I think, for me, what's exciting about this moment is to actually see the public sector lead innovation and hiring on this front.

Morse: Now, I know Opportunity@Work is partnering with the National Governors Association to support states, 17 that you mentioned. There's probably more standing in a line behind you waiting to get your assistance as they look at implementing skills-first strategies. Any early insights into how it's going, what the impacts are? I know that their press releases have gone out, announcements have been made, but in terms of what the actual impacts from this shift to skills have been so far in the states?

Debroy: Absolutely. I think, first, we're seeing some changes in policy and practice. These states are implementing shifts in their legislative, executive, administrative actions to really review or remove degree requirements. And we think that's a really important first step, right? The signal that it sends is actually quite tremendous. Our analysis suggests that, from the 22 states, there's been a commitment to open more than 450,000 jobs in the US.

Morse: 450,000 jobs, amazing. 

Debroy: Yeah, it's such a significant shift. I think some of them are removing degree requirements immediately. Others are reviewing and reporting on the current status of requirements. Some are really getting into what parts of the HR process do we want to make some edits to, like Colorado. I think the intention, though, is really the first step. Second, we actually see that state job posting behavior is shifting. So to assess progress on that front, we actually analyzed government job descriptions from the first set of states that removed degree requirements. And what we find is that across a 12-month period— in the 12-month period before the executive orders were passed, more than 50% of roles explicitly listed a bachelor's degree as a requirement. But in the 12 months following the decision, that percentage fell to about 40%. So we saw a 10-point shift, which is a critical first signal, right, that they're following through on what they've intended to with these executive orders.

Debroy: I think the other thing to call out is that we've seen a pretty significant shift in public perceptions around skills. We've had a partnership with the Ad Council to launch a national campaign to raise awareness of the paper ceiling, the paper ceiling being a barrier that STARs experience in the form of degree screens, misperceptions, and biases in the workplace. And when we actually measure the shifts in attitudes about skills, we see some extraordinary shifts in awareness around individuals who are now taking positive action towards skills. So we've seen an increase in the number of employers that are speaking to others at work about hiring STARs, we're seeing shifts in company policy, and we're seeing a lot more folks are going online to learn about what alternative routes look like for workers to gain valuable skills. This shift in the awareness actually points to transformative potential on the skills front in this coming moment.

Morse: So not only an actual impact of a reduction in the number of job postings going out that require degrees, so a very real tangible, but also, as you're saying, the importance of this shift in perception, shift and hunger for information, seeing people drive to the websites to learn more. That's a pretty amazing— in a 12-month period, a pretty amazing result. That's great.

Debroy: Yeah, we're so excited about it. 

Morse: I want to talk a little bit about the federal government because there's action going on there too. While the states are moving - now 22, might be 23 by the time we get done with this podcast - we're seeing the federal government shift to a skills-based approach, but doing it in an interesting way, focusing on roles. So the Office of Personnel Management is looking at a skills-first approach to federal IT roles by 2025. And we also, and I'm sure you've— there's really interesting conversations happening at the Office of the National Cybersecurity Director, which, frankly, isn't that— I mean, they're great conversations, and they're building on the shoulders of previous work that's been done in the cybersecurity world around skills, so that sort of makes a ton of sense. We're working to support and encourage these conversations at the federal level. I'm wondering what you think about the pace of change in the federal government. Always a question. Are they moving too slow? Are they moving too fast? But also, they seem to be focusing on specific roles. And what do you think about that as a way to start?

Debroy: Absolutely. I so appreciate that you elevated this because so much of the momentum that is happening at the federal level hasn't been celebrated, maybe the same way as we're seeing the movement in the states. But I think, as you're very well aware, the executive order that was passed under the Trump Administration was reinforced by the Biden Administration, and the intention really is to advance skills-based practices. So they've been working at this for just as long as the states. We're really encouraged by this. I think there's a couple of things to note. First, the most important is the federal government is our largest employer in this country. They employ just shy of 10 million workers in the United States. And I think what's really interesting if we bring a STAR lens to this is that STAR representation in the federal government actually mirrors that of the labor market at large. And that's unique. And so the decision to focus on roles is actually pretty important, and that's because the availability to jobs for STARs actually varies quite a bit by federal agency. And so if you actually look across the agencies, we see, for instance, nearly a fifth of federal STARs work for the US Postal Service.

Morse: Interesting.

Debroy: And the next most common employer of STARs is the Department of Veteran Affairs and DHS. And so I think what becomes really interesting then is, how might we start to think about the next set of roles we want to open up for STARs and how we think about pathways into middle and high-wage work for a lot of workers who are gaining skills through many different types of pathways in the US.

Morse: That's fascinating. We are working with federal agencies, and it's so clear they've got challenges attracting younger talent, which I think a skills-first approach certainly helps with. Some agencies have a number of people retiring in the short term and a real need to fill roles on a short-term basis. So there's tremendous benefits we see to a skills-first approach. And as you say, being the largest employer in the US, we think it sends all the right signals to the market, like, "Hey, this is the direction of travel. This is where we're going," and it's a boost. So I worked on Capitol Hill for a long time. I worked for an elected official. I always used to quiver a little bit when people would say, "I'm going to read some of your words back to you." So I'm going to read some of your words, but don't worry. Don't worry. They're very positive. You recently said, "While employers are an important actor, policymakers are critical." And I couldn't agree more. Workday has been advocating for Congress to modernize federal labor market data-reporting to provide real-time, economy-wide data on emerging roles and skills, a goal I know you and Opportunity@Work share. From your perspective, can you talk a little about how important real-time economic data is in supporting a skills-based approach, both at the federal and state and in the private sector, all those levels?

Debroy: Oh, I couldn't agree more. I think it's well past time to make some significant investments in our federal workforce data infrastructure. I think we need longitudinal data about the education-to-workforce journey in the US, about skills, occupations, employment statistics. There's so much I would love for us to have access to support the American workforce. I think I would love to see some investments in ONET, in our census data, employment statistics from the Department of Labor. And a lot of this is to really ensure that our states, our regions, our communities have the resourcing and capacity to update their data infrastructure as well, right? I also think, as a society, we measure and track things we care about. And STARs have been left behind for a generation of economic prosperity. If you look at the way a worker who's skilled through alternative routes experiences the labor market today, they're earning less than the worker with the bachelor's degree, but 30 years into their career, the median STAR is still not earning what a bachelor's degree candidate was earning on day one of work.

And that inequality is new to this generation. I think, to really shift that, we have to think about how we track outcomes for STARs: measurement of income, their skills, support services, and so much more. I think this is a critical first step to actually supporting the mobility of American workers.

Morse: We measure and track the things that we care about. That's an interesting way to think about it, and I'm going to take that away from this podcast and mull on that a little. Congress—We're in DC, so we're going to talk about Capitol Hill for a minute. Congress is right now weighing a path forward on legislation reauthorizing critical federal workforce programs. I spelled that out because I don't think everyone's going to know what WIOA is, the Workforce Innovation and Opportunity Act. It's up for reauthorization. You had the chance last year to testify before the House Education and Workforce Committee. What are other steps the federal government can take to support skills?

Debroy: I think there's a number of bills moving forward that are focused on how we might think about a skills-based hiring ecosystem. The Opportunity to Compete Act was introduced by Representative Krishnamoorthi and Representative James. The ACCESS Act, introduced by Representative Krishnamoorthi and Representative Mace.

Morse: Workday's endorsed that bill. Very familiar with that bill.

Debroy: The Chance to Compete Act is sponsored by Representative Fox. And I think there's legislation moving forward to try and codify existing executive orders that remove degree requirements from public sector jobs being moved forward by Senator Brown's office. I think the thing to maybe call out about what we're observing is that this really is a bipartisan issue. And skills-based hiring is certainly about understanding and adapting to a mindset that allows organizations to really think about skills being the denominator of talent in their organizations. And I think what's really exciting about this moment is that this is a unifying way of starting to really think about how we activate talent in this country for this next generation of challenges we're going to face.

Morse: I love it. All right. That's all the time we have for today. It's always a pleasure to get a chance to connect. I always learn so much. Speaking of learning, if people want to learn more about Opportunity@Work, what should they do? How should they get in contact with you?

Debroy: Our website is www.opportunityatwork.org. And you can also visit us at tearthepaperceiling.org, where we share a little bit about what it means to actually remove degree screens and activate all of the potential in the US workforce.

Morse: Thank you so much for being here and joining me on the Forever Forward bus. I appreciate your time and the insights you've shared. We've been speaking with Papia Debroy, Senior Vice President and Chief Analytics and Research Officer at Opportunity@Work. Remember to follow us wherever you listen to your favorite podcasts. And remember, you can find our entire catalog at workday.com/podcasts. I'm your host, Chandler Morse, and I hope you have a great workday.