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How to perform optimal competency management

When we talk about competencies in a business setting we are talking about the attributes and abilities necessary for a job, or task, to be completed to a high standard. When it comes to competency management though, there is a little more involved. This article will run you through:

  • what competencies are in a business setting
  • how to go about managing the competencies within your organization
  • how efficient competency management can benefit you


Competency management: what is it? 

The terms skills and competencies are often seen as being synonymous, which isn’t entirely true as there is a slight difference between the two:

skill is a person’s granular ability to perform a specific task, whereas a competency is more well-rounded and covers not only someone’s ability but includes their attitude too.

Very simply, if someone is competent at a task they no longer ask as they have:

  • attitude – a keen commitment and positive mindset to the work
  • skill – a highly developed aptitude to perform a task
  • knowledge – a demonstrated know-how and expertise of the task at hand

The good news is that even though there’s a slight difference, there isn’t any harm in using them interchangeably. The main thing is to make sure that every skill/competency in your organization is quantifiable and objective. This way you can easily manage them. You’ll also quickly see the benefits if you place competency management at the heart of your Human Resource Management Policies.

Download our white paper on the topic to see exactly how.


Different competencies for different job requirements

A business wouldn’t be that effective if every employee at every level held the same skill sets, or were just as competent at the same tasks as one another. Business is not a one shoe fits all scenario. It’s important to stay well informed of all your business and role-specific needs to ensure that your team is always sufficiently skilled. As your business evolves, so must your aptitude in handling it.
Good competency management – or Success Profiles, as it’s sometimes called – needs to be divided not only by role but also by demographic. By doing so will add value to each of your stakeholders:

  • Senior Leaders
    Not only do leaders of any organization need to be competent at their own tasks, but they also need to have a strong overview of the collective competencies within their company. Senior Leaders must ensure that business needs are continually being met.
  • Managers
    Managers also need to take charge of collective competencies as they build and lead their teams to success. Whether it’s directing projects or ensuring smooth day-to-operations, management needs to ensure that every member of their team is competent and compliant with their tasks.
  • Employees
    Employees need to manage their own competencies and should be aware of how they align with business needs. It is beneficial for companies when employees can visually see their skills developments. When employees are involved with their own learning and development, they become more engaged and more productive at their tasks.
  • Human Resources
    Good competency management is important for the HR department of any company. As it is HR who takes charge of recruitment, onboarding, performance reviews, and training developments, they need to be well informed of business needs and individual competencies. HR’s job is to make sure that no skills or competency gaps arise within their place of work.


Framework for competency development 

Even though there are different competencies for different roles, when it comes to managing development there is a four-step routine that can be applied to all stakeholders in an organization.

Step 1: preparation

During the initial planning stage, it is important to identify the goals you want to reach. Once you have a goal in place you can then determine the skills and, importantly, the competencies that will get you there.

Step two: collecting information

This is the research stage, and there are a few ways to collect the data needed for your competency management. Observation and employee surveys are a good starting point if you want to develop competencies within an existing role or team. But for a new role or team, market and business analysis is usually a better option.

Step three: building the framework

Once you have collected all your data you need to log it to create a framework. It is important to the group and divides the data logically, otherwise, when it comes to using it you may find your records difficult to manage.

Step four: implementing the framework

When you have a clear and organized competency framework, you are ready to get the ball rolling with your plan. It’s best to be transparent and honest when discussing competencies with every involved party. Doing so will ensure that everyone is on the same page every step of the way.

Benefits of running strong competency management

There are loads of benefits to running a strong competency management system. These benefits can be split into three areas: optimized day-to-day operations, cost reduction, and contingency planning.

Optimized day-to-day operations

  • Managing competencies effectively will optimize the daily operations within your business. Having a good competency framework makes it easy to identify when and where a competency gap can occur.
  • It also empowers employees as they can take charge of their own training journey.
  • Audit panic will become a thing of the past, as your competency framework has the information to keep you compliant, every time.

Cost reduction

  • Reduces onboarding costs – which according to Gallup can cost anywhere between $25,000 – $100,000. – as you can be certain to recruit the right talent the first time.
  • Employee retention rates will also improve. New starters will be fully aware of the job they’re moving into, primarily. But they will also feel more valued when they feel that their development is being invested in.

Contingency planning

  • Good competency management will also help you stamp out any skills gaps you may have in the future. A good framework will provide insight, ahead of time, so you can always stay at the top of your game.
  • It becomes much easier to create leaders from within your organization. You’ll be able to see the rate that an individual has excelled and be in the knowledge of how their ability aligns with new opportunities.


Tools that help: competency management system

The easiest way to handle all your competency data is by running a competency management system. A good system will help organizations to manage and develop all skills and competencies at both the individual and organizational levels.
An efficient competency management system can track and identify any skills gaps before they can arise. This ensures that a business stays market-ready, whatever challenges or changes the industry brings.

At the same time, a competency management system, like AG5 Skills Intelligence Software, allows you to create matrices so you can clearly see where and when to implement any training or upskilling activities. These matrices also benefit day-to-day operations as they provide the information needed to juggle task forces when needed.


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