Skip to content

Editor’s Note: The future of work is here, and it’s skills-first. At SXSW EDU 2025, thought leaders from business, education, and government came together to explore how AI, competency-based hiring, and digital learning records are reshaping economic mobility and workforce development. This session—featuring experts from Best Buy, the Colorado Community College System, Alabama’s Office of Workforce Transformation, and Jobs for the Future—offered a reality check on the talent gap, the shift from degrees to skills, and the ethical challenges of AI-driven hiring. As organizations navigate this transition, one thing is clear: those that embrace skills-first strategies will be the ones that thrive.

Industry News – Event Beat

The Skills-Based Economy: AI, Hiring, and the Future of Work

ComplexDiscovery Staff

AUSTIN, TX—The conversation about the future of work is no longer theoretical. The skills-based economy has arrived. At SXSW EDU 2025, thought leaders from business, education, and government gathered to discuss how AI, skills-first hiring, and competency-driven education are reshaping economic mobility and business success.

In a Day One session titled “AI & the Skills-First Economy: Navigating Hype & Reality,” panelists explored the rapid evolution of the job market and what it means for employers, educators, and workers alike.

The Experts Leading the Discussion

To examine this shift, the session brought together leaders with deep expertise in workforce development, hiring innovation, and AI-driven talent strategies.

  • Ryan Hanson – Senior Director of Human Resources at Best Buy, where he leads Enterprise Learning and Leadership Development. Over his 19-year tenure, he has been instrumental in transforming skills-based hiring and talent mobility to modernize the workforce.
  • Michael Macklin – Associate Vice Chancellor for Workforce Partnerships & Development at the Colorado Community College System (CCCS), where he works to align education with labor market needs and ensure job seekers gain skills that translate directly into workforce opportunities.
  • Nick Moore – Director of the Governor’s Office of Education & Workforce Transformation in Alabama, where he leads AI-driven workforce solutions and competency-based hiring strategies to bridge employment gaps.
  • Meena Naik – Director of Skills-First Design at Jobs for the Future (JFF), where she leads credentialing innovation, workforce technology, and AI-driven learning models to expand economic mobility.

Each panelist provided a unique perspective on the transition to a skills-first workforce and the role AI plays in this shift, offering insight into how businesses, policymakers, and educators must adapt to the changing labor landscape.

The session opened with a stark reality check from Meena Naik:

“There’s a recent report that came out just two weeks ago that suggested that by 2032, we will have 6 million more jobs available than we will have workers to fill up. There’s another report that came out that looked back at 2023 and found that 7.6 million jobs went unfilled. And this is all while we know people are looking for them. So where’s the gap? The bigger question is, and bigger concern is in that 7.6 million jobs that were unfilled. That is an estimated net GDP loss of $442 billion.”

For companies, it’s not just a matter of filling jobs—it’s a matter of survival. Traditional hiring methods aren’t working fast enough to meet demand, and AI is changing the rules of the game.

AI and the Demand for Skills Over Degrees

Employers are reevaluating how they assess talent. The reliance on degrees as a primary credential is giving way to a focus on competencies, particularly as AI transforms job applications, job descriptions, and hiring assessments.

Ryan Hanson, who leads Enterprise Learning at Best Buy, highlighted the challenges of outdated hiring processes:

“Historically, hiring decisions were based on three things: a degree and the credibility of the institution behind it. We’ve had a resume and the experiences that that person has. And then that interviewer’s gut feeling of that individual. And that’s kind of the extent of the data that goes into a lot of hiring decisions.”

AI is accelerating the shift from credentials to competencies, making hiring more data-driven and reducing bias. Yet, despite its potential, businesses still face barriers to adoption. Many organizations are deeply ingrained in traditional hiring models, requiring a cultural shift in how talent is evaluated.

Education in the Skills Economy: The Role of Learning and Employment Records (LERs)

A key focus of the panel was Learning and Employment Records (LERs)—digital records that provide a structured, verifiable view of an individual’s skills and work experience.

Nick Moore, leading workforce transformation in Alabama, explained:

“What we believe is that by viewing competency-based education and skills-based hiring concurrently, and working from a demand-driven perspective, we can help make all learning count as part of the strategy for increasing our state’s labor force participation rate.”

Alabama is among the states developing skills-based job description generators and AI-driven talent marketplaces to make hiring more transparent and efficient.

Yet, while states and employers are moving toward skills-based hiring, higher education remains largely tied to degree-centric funding models.

Michael Macklin noted:

“So when you look at our funding, and this is a community college land, I’m sure some of you can relate to this, our funding is predicated on the completion of degrees and certificates. That’s how we get our funding. So if that is the case, we’re going to continue to issue degrees and certificates.”

Many students, however, may not need a full degree. Macklin pointed out that some simply want to gain specific skills, yet institutional structures often fail to accommodate such flexibility.

AI: A Tool for Progress or a Threat to Jobs?

A central debate at the session was AI’s role in employment. Would it replace workers or augment their capabilities?

Ryan Hanson argued that AI should be seen as an enabler rather than a threat:

“It’s not the technology that is coming to replace jobs, but it’s the ability to learn to use the tools that matter most right now that will define success.”

Rather than eliminating roles, AI can support workforce development and upskilling initiatives.

However, Meena Naik raised concerns about the potential fragmentation of jobs into disconnected, monetized skill sets rather than recognizing individuals as professionals with holistic expertise.

“The concern though is not the atomization of the job. I mean, there are actual concerns, but that’s not where the critique and pressure is. The pressure is that—am I a person? Am I the whole of my experiences, or am I just atomized for what’s profitable?”

This concern highlights the ethical dimensions of AI-driven hiring, as technology plays a greater role in defining how people are evaluated and categorized in the workforce.

The Long-Term Implications of a Skills-Based Economy

While the immediate effects of AI-driven hiring and skills-first education are becoming clear, the long-term implications remain uncertain. The next decade will likely see a restructuring of how businesses, governments, and educational institutions develop talent.

As AI automates both entry-level and specialized roles, professionals will need to engage in continuous learning to stay relevant. This shift will place pressure on education providers to deliver flexible, competency-based learning models that align with real-world workforce needs.

Governments may also need to regulate AI-driven hiring tools to prevent bias and ensure that skills-based hiring fosters upward mobility rather than reinforcing economic divides.

For industries that rely on highly specialized knowledge and judgment, AI-driven skills assessment could redefine industry certifications. This shift could broaden access to high-demand jobs but also raises ethical concerns regarding who determines the validity of skills and credentials in fields where human oversight remains essential.

The next phase of this transition will determine whether the skills-based economy truly expands opportunity—or simply replaces one rigid hiring filter with another. Businesses and institutions that invest in skills-first strategies now will be best positioned to navigate this evolving landscape.

The Future is Skills-Driven

The skills-based economy is already reshaping workforce development, hiring, and education. AI is accelerating this shift, but businesses and institutions must actively adapt to avoid falling behind.

Rather than resisting change, organizations that embrace skills-first hiring, competency-driven education, and AI-powered workforce development will gain a competitive edge.

For job seekers and employers alike, the key takeaway is clear: Adapt now, or risk being left behind.

The question is no longer if the skills-based economy will dominate but how quickly organizations will adapt.

News Sources

Assisted by GAI and LLM Technologies

Additional Reading

Source: ComplexDiscovery OÜ

The post SXSW EDU | The Skills-Based Economy: AI, Hiring, and the Future of Work appeared first on ComplexDiscovery.

Photo of Alan N. Sutin Alan N. Sutin

Alan N. Sutin is Chair of the firm’s Technology, Media & Telecommunications Practice and Senior Chair of the Global Intellectual Property & Technology Practice. An experienced business lawyer with a principal focus on commercial transactions with intellectual property and technology issues and privacy

…

Alan N. Sutin is Chair of the firm’s Technology, Media & Telecommunications Practice and Senior Chair of the Global Intellectual Property & Technology Practice. An experienced business lawyer with a principal focus on commercial transactions with intellectual property and technology issues and privacy and cybersecurity matters, he advises clients in connection with transactions involving the development, acquisition, disposition and commercial exploitation of intellectual property with an emphasis on technology-related products and services, and counsels companies on a wide range of issues relating to privacy and cybersecurity. Alan holds the CIPP/US certification from the International Association of Privacy Professionals.

Alan also represents a wide variety of companies in connection with IT and business process outsourcing arrangements, strategic alliance agreements, commercial joint ventures and licensing matters. He has particular experience in Internet and electronic commerce issues and has been involved in many of the major policy issues surrounding the commercial development of the Internet. Alan has advised foreign governments and multinational corporations in connection with these issues and is a frequent speaker at major industry conferences and events around the world.

Read more about Alan N. Sutin
Show more Show less