The talent shortage is real, but it's not because qualified people don't exist. It's because most hiring processes are designed to exclude them. Here's how to widen the funnel, validate what matters, and stop losing good candidates to bad filters.
- 72% of employers globally report difficulty filling roles. But the problem isn't a shortage of people, it's a mismatch between how employers filter candidates and where the actual skills live.
- 62% of Americans don't hold a four-year degree. Degree requirements are the single biggest artificial constraint on most candidate pools, and dropping them without replacing them with something objective doesn't work either.
- The challenge requires a structural fix. Broadening keywords, relaxing requirements, and rethinking how you assess candidates all compound. The organizations hiring well right now are the ones treating their talent funnel as a design problem, not a volume problem.
The talent shortage isn't what you think it is
Every year ManpowerGroup surveys tens of thousands of employers about hiring difficulty, and every year the numbers stay stubbornly high. In 2026, 72% of employers across 41 countries said they struggled to fill roles. In the U.S. specifically, that was true of 69% of employers.
And here’s the catch: these aren't niche industries. Think manufacturing, healthcare, hospitality, public sector, finance, IT. The shortage is cross-industry and structural.
But "shortage" is a misleading word, because it implies there aren't enough people. In most cases, there are plenty of people, especially with unemployment creeping up. What there aren't enough of are people who fit through the filter you've built.
Harvard Business School and Accenture's Hidden Workers research identified an enormous pool of workers who are skilled, willing, and actively seeking work, but are systematically screened out by automated hiring processes. Degree requirements, keyword-matching ATS filters, rigid experience thresholds, and employment gap penalties all ultimately reject candidates who could do the job well.
SHRM's 2026 Talent Trends Report calls this a moment to rethink talent acquisition as "talent architecture." Their 2025 research found that 27% of organizations have already eliminated college degree requirements for certain positions, and 76% of those successfully hired candidates they wouldn't have found otherwise.
So, the talent exists. But can your organization see it when it shows up?
Tear down the degree wall (but build something in its place)
Almost two-thirds of Americans over 25 don't hold a four-year degree. If your job posting requires one, you're telling 62% of the workforce not to apply. For roles like medical billing and coding, administrative support, skilled trades, IT support, and dozens of others, a degree requirement only measures access to higher education, not skill. Those are very different things.
But here's the catch. Harvard and the Burning Glass Institute found that even when companies formally dropped degree requirements, fewer than 1 in 700 new hires actually benefited. The policy changed, but the behavior didn't. Recruiters, accustomed to using degrees as a shorthand for competence, didn't know what to replace them with.
Dr. Cali Morrison, Senior Director of Workforce Education Strategy at EdAssist, sees this gap up close.
"In the past, many employers relied on degrees as a proxy for skill," she said. "But the newer credentials have those skills explicitly lined out, so you can see as a hiring manager whether they have the skills that match with your role or not."
The replacement for degree requirements isn't nothing. What you need is skillset validation. Whether that comes from stackable credentials and microcredentials (which carry metadata showing exactly what skills were earned, when, and by whom), from relevant work experience, or from objective skills assessments, the point is that you need a mechanism for verifying ability when you can no longer use a diploma as a proxy.
Without that mechanism, you're just removing a filter and hoping for the best. With it, you're actually hiring based on merit.
Broaden your keywords (seriously)
This strategy is both tactical and widely often overlooked.
The job title and keyword language in your postings directly determine who sees them and who applies. If your posting says "CNC Machinist III with 7+ years experience and AS in manufacturing technology," you'll get a narrow set of applicants who happen to use exactly those terms. If it says "Experienced machine operator, CNC programming preferred," you capture a wider range of qualified candidates who describe their experience differently.
SHRM's recruiting research shows that organizations using broader, skills-focused language in postings report better applicant quality, not just quantity. The goal isn't to attract unqualified applicants. It's to stop repelling qualified ones with overly specific or inflated language.
This applies to experience thresholds too. The classic "entry-level role requiring 3-5 years experience" paradox isn't just a meme. It's a real barrier that costs you candidates. The 70/30 rule is a useful framework here: aim for candidates who can do 70% of the job on day one and can learn the remaining 30% within a reasonable ramp period. If you're holding out for someone who checks every box, you're either going to wait a very long time or settle for whoever's left.
What AI is doing to candidate pools (and what to do about it)
AI is both expanding and polluting candidate pools simultaneously, and recruiters are caught in the middle.
On the expansion side, AI is creating new entry-level pathways and enabling people to do work they couldn't before. On the pollution side, candidates are using AI to mass-generate tailored resumes and applications, flooding hiring funnels with polished but sometimes hollow applications.
Dr. Morrison described an especially deceptive tactic she's seeing: "People will now put all of the skills from the job posting in white text on a "blank" second page of their resume. That matches them through the ATS for a great match, but they may not actually have the skills the employer needs."
At the same time, AI-driven ATS filtering can miss qualified candidates who don't use the right keywords or whose experience doesn't fit conventional patterns. Veterans, career changers, parents with a gap in their work history, and self-taught workers are especially vulnerable to algorithmic exclusion
The net effect is that resumes have become less reliable as a signal of ability, whether they're AI-inflated on the candidate side or AI-filtered on the employer side. Which brings us back to the same solution: you need an objective, skills-based checkpoint somewhere in the process that validates what candidates can actually do, regardless of how their resume reads.
The demographic cliff is coming
There's one more structural force worth understanding, especially if you're planning workforce strategy beyond the next quarter. Dr. Morrison laid it out plainly: "Right now, we are at the very beginning of the demographic cliff. In 2008, the birth rate dropped dramatically. We have fewer 18-year-olds graduating from high school right now than we ever have before."
This means the overall labor pool is shrinking permanently. The organizations that will weather this well are currently building systems now that can identify talent from non-traditional pathways, assess for skills rather than pedigree, and invest in developing the workers they have rather than constantly trying to poach from the same shrinking external pool.
"If employers aren't widening the net they're using for candidates, they'll miss qualified candidates because of an arbitrary degree requirement,” Dr. Morrison explained. “The more supportive a company is of people being lifelong learners, the more likely those people are to bring skills into your workplace that drive your business forward."
Pulling it together
Expanding your candidate pool may require a few compounding decisions:
- Drop degree requirements where they don't reflect actual job needs, broaden the language in your postings.
- Adopt the 70/30 mindset.
- Build in an objective skills checkpoint that validates ability regardless of how or where candidates learned it.
- Don't confuse a polished resume with a proven skill set, especially in the age of AI.
None of this means lowering the hiring bar, because the goal is to focus on the criteria that actually matters. A degree doesn't tell you whether someone can navigate an Excel simulation, troubleshoot a billing denial, or operate a CNC machine, but a skills assessment does.
The talent is out there. Is your hiring process designed to find it or accidentally designed to filter it out?
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