Skills‑Based Practices in City Government: What We’re Learning

Many city governments are rethinking how they recruit, develop, and retain their employees in response to worker shortages, technology-driven disruptions, ever-evolving skills needs, and other talent management challenges. One way municipalities are shifting their thinking is to incorporate skills-based practices. More than half of state governments have moved toward adoption of skills-based practices since 2022, and cities are increasingly part of this movement.

Skills-based practices emphasize observable, job-relevant skills instead of traditional predictors of success in a role, such as degrees or past job titles. A stronger focus on skills can allow cities to attract broader applicant pools, make more job-relevant hiring decisions, and build internal talent pipelines that support long-term workforce stability.

AIR and the National League of Cities (NLC), with support from Walmart, partnered to better understand how and why cities are adopting and implementing skills-based practices. Here's what we're learning.

How Are Cities Implementing Skills-Based Practices?

Across the cities we studied, we observed several cross-cutting themes in how skills-based practices are being implemented. Cities are:

1. Focusing on specific, critical workforce needs. Cities tend to focus on concrete talent challenges-e.g., hard-to-fill roles, talent shortages in technical positions, impeding retirements, etc.-rather than attempting system-wide reforms all at once. This means cities tend to use skills-based practices to target areas where traditional hiring has fallen short. Some examples include hiring Commercial Driving License drivers in Lima, Ohio; parks and recreation workers in Spencer, Iowa; and apprenticeships for procurement officers, utility technicians, and more in Phoenix, Arizona.
   
2. Integrating hiring with training and skill development. Many cities are investing in training, apprenticeships, and upskilling programs to grow their own workforce, reducing reliance on external training providers. Programs like Philadelphia's City College for Municipal Employment; Desoto, Texas's SkillBridge participation, and Phoenix's apprenticeships treat skill development as part of the hiring pipeline-not something that happens only after onboarding.
   
3. Shifting from degree and credentials to demonstrated capabilities. Cities we studied are removing degree requirements for hiring and instead are adopting ways to assess skills during hiring, such as skills-based assessments, work samples, simulations, and structured interviews. Cities have found that these methods provide clear indicators of a candidate's ability to perform the job and help hiring managers make more confident, objective decisions.
   
4. Focusing on skills throughout the talent lifecycle. Besides using skills-based practices for recruiting and hiring, cities are applying skills-based practices to performance management, promotion, and compensation.
   

What Makes Skills-Based Practices Effective for Cities?

Through our work we identified several key elements that helped city governments make specific, targeted procedural, systemic, and cultural adjustments to help ensure skills-based practices are effectively implemented to meet their desired goal(s). The following considerations are important for cities to consider as they explore and adopt skills-based practices:

1. Taking targeted and pragmatic approaches. Starting small allowscities to pilot new approaches for skills-based practices, lean into what works and troubleshoot what does not, mitigate risks, and build internal buy-in and momentum before scaling.
   
2. Gaining buy-in from a variety of stakeholders. Moving skills-based practices from small pilots to sustained efforts embedded in day-to-day practices requires buy-in from HR teams, city leadership, department leaders, hiring managers, unions, legal teams, and other stakeholders.
   
3. Treating adoption as a change management effort. Cities that take the time to prioritize clear communication, employee engagement, and transparency about how skills are defined, assessed, and rewarded can reduce resistance to change and build confidence.
   
4. Leveraging existing resources and measuring what matters. Cities that tailored existing skills frameworks, models, and partnerships were able to save time and meet their local needs faster. Further, cities that defined success metrics-such as time-to-hire, vacancy rates, or retention rates following skills-based training-tended to be better positioned to assess what was working and to make the case for continued investment and resources.
   

Looking Ahead: What Can Cities Do Now?

As cities navigate growing talent shortages and rising demands, skills-based practices offer a clear starting point, but they are not a quick fix. Cities that are making progress have key characteristics in common: They focus on designing skills-based practices that fit their context, leverage existing tools and partnerships, and build internal alignment before scaling. Small, well-designed pilots, paired with thoughtful metrics, can lay the groundwork for sustainable change.