What is Competency at Work?

According to data from the World Economic Forum, about eight per cent of employees in any given company can be considered high performers. 

If you’re attempting to move more of your team into this category, simply helping employees build skills may not get you there. Instead, ensuring the candidates you hire possess the right competencies for the role may be more helpful.

What is the difference between a competency and a skill? These terms are more than just buzzwords; they are concepts that can take your organisation from good to great. 

Learn more about how competencies work, why they are critical for success, and how you can help employees get to the next level as they measure and improve their work.

Competencies are a set of behaviours that demonstrate an employee’s capacity to perform in their role. 

Going beyond simple know-how, competency is often thought of with a comprehensive lens, incorporating a person’s skills, knowledge, and abilities.

Skill and competence are similar concepts. Both are developed through learning and experience, and both are necessary for high performance. 

However, competence is about a broader picture, while skills are much more granular and represent just one part of that bigger picture. They are specific, teachable abilities that fit within the framework of competency.

Additionally, competency is more difficult to improve. As a result, it can take longer to see results. You’re more likely to learn a new skill in a six-hour webinar than you are to truly improve competency. 

Competency can also be challenging to judge. Because of its complexity, competency isn’t as easy to quantify as skill. In many cases, managers must be subjective in determining whether someone is competent in a role.

A competent employee can do more than just perform a set of tasks. 

A competency-based approach to hiring and performance evaluation ensures employees possess all the skills, knowledge, and abilities necessary to be effective in a role and contribute positively to the team. 

Competencies can provide a roadmap for employee development, improve productivity and morale, and enhance problem-solving and adaptability.

“Competency” is a broad term, but not all are created equal. Understanding the various types of competencies can help you develop a well-rounded training programme so your employees can succeed.

Core competencies are the foundational skills, knowledge, and abilities an employee must have to do well in the organisation and as a member of your team. 

These competencies (such as communication or problem-solving abilities) tend to be applicable across a wide range of roles. How important they are in any given situation may vary.

Functional/technical competencies align with what employers know as “hard skills.” They involve the knowledge, skills, and ability needed to perform specific tasks, such as operating a software platform or a piece of machinery. 

Technical competencies are especially important in roles that require specialised expertise.

Behavioural competencies are more aligned with the “soft skills” needed for a job. They influence how employees interact with others and with their work environment. Encompassing elements like communication and problem-solving, these competencies are critical for employees to become effective teammates and collaborators who contribute positively to company culture.

Leadership competencies represent the characteristic traits of great managers. Competencies such as strategic thinking, emotional intelligence, and decision-making help employees in supervisory and management roles motivate and inspire others to ensure the team keeps working toward a common goal.

Understanding how competencies can benefit your organisation in various areas is key to using them effectively.

A competency-based hiring approach allows recruitment teams to clearly define the essential skills, knowledge, and traits a successful candidate must have. 

This creates a more structured and objective assessment process and improves hiring accuracy, leading to a more qualified candidate pool and better employee retention.

Understanding competencies helps managers clarify the skills and behaviours necessary for success and identify the gaps in their team. 

This allows them to select the right training content to create an employee training plan based on their team’s current and future needs.

An effective competency framework can serve as the basis for performance reviews, serve as the basis for centralised skills tracking, and provide an objective lens through which managers can assess their employees. 

This framework also gives employees a clear picture of what is required for advanced roles they wish to move into, so they can improve and set goals to achieve career success.

Well-defined competencies create clear and objective benchmarks for employee evaluation and allow for more strategic workforce planning. 

Here are three ways you can improve accuracy in defining and measuring competencies for your team.

A competency framework outlines the specific skills, knowledge, and behaviours needed for success in a particular role. As you create yours, make sure to:

• Define the purpose and scope of the framework
• Conduct a thorough job analysis to understand the responsibilities, tasks, and expected performance benchmarks for each role.
• Determine what skills, knowledge, and behaviours drive high performance
• Consider future business needs or industry trends

This process can help you ensure your model is accurate and comprehensive.

A competency matrix, also known as a skills matrix, allows managers to map out the competencies present on their team and note each employee’s competency level. 

These can help you make more data-driven decisions about hiring, team structure, delegation, and training to ensure the team has exactly what it needs to thrive.

Aligning performance indicators with each competency gives you an opportunity to measure and track training effectiveness and evaluate how well employees are doing in their roles. 

Start by clearly defining the competency and its related behaviours, and then proceed to identify measurable indicators that reflect success. 

For example, a KPI for a problem-solving competency may be the rate of accuracy with which an employee resolves customer complaint tickets.

A competency-based approach to organisational improvement can improve your business in many ways.

A competency-based approach clearly defines the skills, behaviours, and abilities needed to achieve the organisation’s goals and objectives. 

It also ensures employees possess and develop those competencies to push the organisation toward success.

Competencies are highly objective. Using them to measure performance can help managers remove personal bias from employee reviews.

A competency framework offers employees a clear path to improvement. This motivates them to keep learning and improving.

While using competencies can be beneficial to an organisation, implementing them isn’t without its challenges. 

Here are a few difficulties that may arise as you pivot your approach.

It’s important to avoid including too many competencies, using generic or inconsistent descriptors, or confusing tasks with the skills and behaviours needed to do them well.

The business world changes quickly. It’s crucial that you update your competency definitions and frameworks to reflect current and future business needs.

When your leadership team isn’t fully bought into the framework, it may be difficult to get the resources to launch your new initiative or communicate consistently with employees about your approach.

Here’s what you should remember as you develop your competency-based approach.

Involving various stakeholders, including upper management, employees, and even customers or clients, can increase the chances that your team will embrace the new framework and help you identify necessary competencies you hadn’t previously thought of.

Your managers must thoroughly understand the framework to apply it correctly. Offering training minimises confusion and subjectivity, ensures consistent application, and helps managers better leverage the information provided.

As the business changes, so should your competency framework. Consider it a “living document” that should be regularly re-evaluated, especially when your leadership team shifts organisational goals and objectives.