A must-have is something the person cannot do the job without, such as a nursing registration for a nurse or the right to work in the country. A nice-to-have improves performance or shortens ramp-up but can be learned, like experience with a particular software package. The split is best agreed with the hiring manager at intake, and each must-have can be tested by asking what would happen if a hire lacked it.
When too many preferences are labelled as essential, the pool shrinks quickly and capable people, often career changers or those with non-traditional backgrounds, fall out at the first stage. A short must-have list paired with weighted nice-to-haves lets screening rank candidates by overall fit instead of treating every gap as fatal. The split is worth revisiting if very few applicants meet it.