An introduction to competency management

To fully grasp the concept of competency management, it is essential to understand what we mean by competencies. By competencies, we refer to employees’ skills. These can be soft skills and hard skills. As such, values, behaviours and technical competencies are part of competency management. In the section below, we expand on the definition of competency management and provide some essential benefits to this employee management approach.

Competency management definition

Competency management is the act of evaluating employees based on their skills and performance. The first step of this process is to identify employees’ skills. However, it is essential to go further by managing these skills as well as developing them to ensure that employees grow in their role. Competency management takes into consideration an employee’s individual skills and how they fit in the organisation as well as what value they bring to their role or position in the business. This means that their competencies and skills need to match the business’ goals and the company culture.

Competency management process

When implementing a competency management approach, human resources teams should consider the following process:

• They should define the different roles in the business and align them with the skills required by the employees occupying these different positions.
• They should evaluate and assess new employees and ensure that their skills and expertise match the requirements needed for the job.
• If there are any gaps identified, they should create the appropriate development plan to fill the skills gap.

By doing the above, human resources teams, in collaboration with leadership teams, ensure that the business is able to grow towards its set goals.

The benefits of competency management

There are many benefits of competency management. The approach brings positive outcomes for the business but also for its employees, thus creating stronger relationships and engagement. Here are some of the key benefits of competency management.

Boosted productivity through increased employee engagement

Competency management opens the dialogue on expectations. By doing so, it provides clear guidance to employees on what is expected of them and where they need to improve. This road map has a direct impact on productivity as employees know what to aim for and what skills they should develop. It boosts employee engagement and job satisfaction.

Employee satisfaction results in increased retention rates and talent acquisition

Competency-based approaches have an influence on employee satisfaction. This is particularly the case with emerging talents who thrive at developing. Additionally, as competency management looks into skills gaps within existing teams, it ensures that the recruitment approach fills the gap. Candidates for open roles are selected based on their competencies rather than their experience or qualifications. This makes a significant difference to employee engagement and as such has a direct impact on the employee retention rate.

Read more: Professional development: how teaching employees new skills can improve employee retention

People development is central and allows for personal growth

Adopting a competency-based approach demonstrates that people are a high priority for the organisation. The approach allows them to grow and develop through training development programmes that address individual employee needs. In the long run, this has an impact on the company’s performance.

Company culture is embraced through better alignment with company goals

When establishing the competency-based approach, it is essential that the company goals are at the centre of the project. After all, the development proposed to employees should fit their needs but also serve the goals of the business.

Mitigation of risks with improved succession planning

Succession planning is a long-term play that is often forgotten or not prioritised by organisations. However, it is essential. Without a strong succession plan, the departure of specialised staff can have a daunting impact on the organisation and its functioning. With the competency model, human resources teams are able to pinpoint staff with good potential. This information allows them to gauge any risks and ensure talent retention.

With the competency management approach, organisations are able to develop their people, address any skills gaps and retain talent. These benefits for effective long-term growth are clear.

The value of competency management software

Now that we have a clear understanding of the benefits of competency management, you may wonder how to implement the approach within your organisation. Competency management software can help ease this process. These solutions are used to collect data, analyse it and share it with leaders and HR teams. They facilitate the process and streamline the work effort associated with it.

Through the data collected by the competency management software, leaders are able to make informed decisions when it comes to their team members. They can identify any skills gaps within their teams and address them through training and development programmes or through recruitment.

As for any technological solution, the success of the tool lies in the alignment between its capabilities and the organisation’s existing processes and goals. When looking at competency management software, ask yourself the following questions:

• Can the platform use multiple employees’ assessment methods?
• Can the platform be tailored to input the company’s data and the way the business operates?
• How detailed can the software be when tracking competencies? Can it address each job role, different levels of seniority, locations and much more?
• Does the system go beyond tracking competencies and offer employees development opportunities?
• Can the system be integrated with existing HR platforms?

By selecting the most appropriate competency management software for the business, human resources teams will boost people development and enhance productivity in the long run.

Best practices when implementing a competency management solution

Selecting the most appropriate software for competency management is not enough. The implementation of the solution plays a big role in its success. This section provides you with some best practices to keep in mind when implementing such systems.

Competency management systems: key considerations

There are some essential milestones to consider when implementing a competency management approach. We shed some light on these different steps below:

Create a competency management business case

The first step to take when wanting to implement a competency management system is to build a business case. This means collecting the existing data on employees and their performance and utilising this data to build a case on the competency management process.

Get senior sponsor buy-in for successful change management

Without leadership buy-in, the approach is likely to be unsuccessful. As with any change, sponsorship and buy-in from senior leaders is essential for successful change management. Ensure that the goals of the project are fully understood and highlight the benefits of the solution in the short and long term. By doing so, you can ensure that leaders are ambassadors of the solution and fully endorse it. This will have a cascaded effect on all employees who are likely to be more engaged in their own development.

Implement a clear governance

Accountability is key to overcoming roadblocks. By creating a governance structure, you ensure that everyone knows their place, responsibilities and levels of accountability. Those in charge of developing the competency framework should be clearly designated so that there is full transparency on each and everyone’s responsibility.

Create development planning to fill the skills gap

The data analysis of the state of play should lead to the identification of skills gaps (also called skills gap analysis). With this information in hand, leaders and human resources teams can target these gaps through training and development.

Mentor leaders and empower employees

Leaders have their role to play in motivating their teams and developing them. Through the competency management software, their approach to people development is eased and partially automated. As such, they are able to empower their team members and hand them the reins to their own career progression. Their role is to guide them towards training opportunities.

Adopting a competency management approach brings many benefits to organisations and their people. It may be a lengthy and sometimes costly project to undertake but certainly brings many advantages in the mid to long term. The investment is worthwhile for organisations to future-proof their competencies.