Why Udemy is eliminating degree requirements from its jobs

For Karen Fascenda, skills-based hiring is a personal matter.

Her dad, who never graduated from high school, got a job working as a janitor for an oil company, and worked his way up to a position equivalent to an electrical engineer. “I get super passionate about this because I saw how that changed his life,” she said. “A company bet on him, and bet on his skills, and developed him.”

Now, Fascenda is spearheading efforts to eliminate degree requirements as chief people officer for Udemy, a learning and development platform. Should the transition be successful, she hopes it can serve as a “case study for companies around the globe to have that same impact.”

Why Udemy favors skills-based hiring. Udemy offers online courses to help workers develop skills in areas like data science, IT, and leadership, and Fascenda said it wants to show clients how they can prioritize such skills over degrees in the hiring process.

The company’s journey to transition to a skills-based model began last year, according to Fascenda. Her team started by prioritizing 300 open roles, and took degree requirements off the majority of those jobs.

The process was challenging at times, Fascenda said. Udemy’s chief technology officer and other engineering leaders, in particular, initially had trouble picturing how they could hire candidates without degrees. To help assuage these concerns, her team would ask questions like, “What does that degree represent?” Or, “Tell me what skills you’re really looking for that that degree brings to life for you. And how do we hire for those skills versus for that education?” she said.

Udemy, which has about 1,200 employees, is now working on adding skills to its entire job architecture, Fascenda said. “Every single job in the company will have skills associated with it by the end of June,” she explained. This should open up a pathway not only for Udemy to prioritize skills when considering external candidates, but also when developing internal talent.

Fascenda added that Udemy employees will have a conversation with their manager about where their skills are strong, and where there’s room to develop them, creating “a learning path to close any gaps.”

Since making the switch to skills-based hiring, Udemy has boosted its internal mobility, filling 37% of its open jobs from within, Fascenda said.

The state of skills-based hiring. In addition to building a successful use case for skills-based hiring, Fascenda said she hopes eliminating degree requirements from Udemy roles will help the company hire more candidates without traditional four-year degrees. “The hypothesis is that this will open up the playing field for people that maybe did not have a chance to go to college, that they really built their skills along the way,” she said.

Whether skills-based hiring actually fulfills that goal is a subject of ongoing research and debate. One February 2024 study from Harvard Business School and the Burning Glass Institute, for instance, suggests companies are falling short of the mark. An analysis of 11,300 roles at large firms that removed a degree requirement found it resulted in only 1 in 700 hires without a bachelor’s degree in 2023.

Part of the reason the rise in skills-based hiring hasn’t meaningfully changed employers’ practices is that managers tend to be risk-averse, said Shrinidhi Rao, chief of staff with the Burning Glass Institute. “They’re worried about hiring someone without that degree, and that reflecting poorly on them,” he said. “So there’s a risk tolerance game here that needs to be overcome.”

Companies have to “shift their culture in a meaningful way” in order to be successful as a skills-based organization, said Adriann Negreros, a principal with Boston Consulting Group. Challenges they often encounter include clarifying what skills they actually need for certain roles, getting buy-in from senior leaders and frontline managers, and determining how to track progress.

Measuring impact. Two Udemy managers told HR Brew via email that the shift to skills-based hiring has been positive for their teams. In sales, “practical skills often matter more than formal credentials,” said Megan Riley, senior director of commercial sales, adding she couldn’t remember the last time a candidate’s degree factored into her decision-making. Her team identified traits of top-performing account executives and aligned them with “four priority skills” that they now assess candidates for during the hiring process.

For engineering, “clearly defining the key skills individuals and teams need to build competency in” was the most challenging part of the process, said Seth Hodgson, Udemy’s SVP, head of engineering. His team spent a lot of time focusing on “getting to a better-defined set of skills,” but said the approach works well for this line of work.

“While formal degrees continue to be helpful signals, they haven’t been as firm a requirement. This is even more true as the rate of change in technology like GenAI increases,” Hodgson said. He attributed a 27% year over year decrease in the time it takes to hire engineering talent for open roles to both skills-based hiring and additional recruiting improvements.

Given how quickly skills are evolving, it seems likely more employers will look to promote “by proficiency” in the coming years, regardless of whether they’re considering candidates with college degrees or not, Boston Consulting Group’s Negreros predicted. If employers “promote by actual skill capability…given how much skills are changing, that is your real success factor.”