What is Competency Management and Why Do You Need It?

At Avilar, we talk a lot about competency management—and for good reason. We’ve seen firsthand how managing skills and talent intentionally can drive real business transformation. That said, we sometimes jump ahead to the “how” before revisiting the “why.”

Recent conversations with leaders who are new to competency management reminded us of the value in going back to basics. So, that’s what this blog post is all about: What is competency management? Why does it matter? And how can you make it work for your organization? Let’s explore.

What is Competency Management?

First, let’s define competencies. A competency is the combined knowledge, abilities, and expertise of an individual or an organization. So, competency management is the process of identifying, managing, and developing employee competencies. It aligns employees’ skills and behaviors with the company’s goals. When used as a framework to recruit, develop, engage, and retain employees, it gives organizations a competitive advantage.

At the highest level, the process is clear cut:

1. Define the jobs across your organization and the skills that employees need to do those jobs to create a “competency model“
2. Assess recruits’ and employees’ competencies to determine how well their skills and knowledge match their job requirements
3. Create development plans to close the most critical skill gaps
4. Monitor, measure, and repeat to achieve your individual, team, and organizational goals

How Does Competency Management Help?

Essentially, competency management helps you develop the skills, knowledge, and behaviors your employees need, so you can realize the full potential of your workforce. A robust program can advance short-term and long-term workforce planning initiatives like these:

• Workforce Optimization: Make sure your employees have the competencies they need to perform at their best. Use skills gap assessments to identify key areas for improvement, then deliver targeted training that directly addresses those gaps. Competency management helps you focus training efforts where they matter most, boosting both effectiveness and ROI.
• Leadership Development: Identify and prepare your future leaders. Use competency management tools such as skills assessments and gap analysis to identify which of your employees are best prepared to take on leadership roles today. Also, look for employees who could become leaders over time. Provide those employees the training, development plans, support, and experiences that will strengthen their leadership competencies. Then, they’ll be ready when you need them. 
• Succession Planning: Start years in advance to plan for succession and to groom the next generation of leaders. Retirement. Changing business climate. Industry shifts. Whatever the reason, every organization should be planning now for a smooth transition when it’s time for senior executives to step aside. Mature competency programs help ensure that the successors have the knowledge, tools, and skills to successfully manage through the critical transition – and beyond. 
• Business Continuity Planning. Expect the unexpected. Don’t let natural disasters, pandemics, or other crises disrupt the business of your organization when groups of employees are suddenly unable to work. Up-to-date competency or skills management systems can provide a ready catalog of employee skills, so you can quickly analyze your losses and develop an actionable response.

 

Optimizing Competency Management

Too often, leadership decisions are made on instinct rather than insight. Without data, leaders rely on gut feelings and best guesses—and even when outcomes are positive, they’re not always repeatable. Competency management introduces a data-driven framework that brings clarity to workforce priorities, productivity, and development.

As an enterprise initiative, competency management delivers powerful insights about an organization’s workforce today – and its potential to thrive in the future. But it has a lot of moving parts. Use available competency tools to optimize your program, including these:

• Competency Model: What is a competency model? This is the framework for defining the skill and knowledge requirements of a job. It’s a collection of competencies that jointly define successful job performance. There are a variety of models to choose from. Take time to understand your options, weigh the pros and cons of each, then select and refine the model that will work best at your organization. 
• Skills Assessments: These days, most employee and manager skills assessments are conducted online, but you may do some of your skills assessments in person. However you do your assessments, be sure that there is consistency from one to the next, so you have objective results that help you better understand the current skills of your workforce.
• Competency Management System: At scale, competency programs benefit from using technology to assess, analyze, track, and manage the skills and competencies of your workforce. Without this technology system or software, there is just too much data and too many variables to manage your information adeptly and make informed decisions. There are many competency systems to choose from, including WebMentor Skills from Avilar. Think through what’s most important to you (cloud vs. on site, roots in competencies, field and process flexibility, expertise in your industry, etc.) to find a system that fits.

Key Take-aways:

• Competency management is a structured approach to identifying, assessing, and developing the skills, knowledge, and behaviors employees need to succeed.

• It starts with a competency model that defines role-specific requirements and aligns them with organizational goals.

• Companies use competency management to:

  • Identify and close skills gaps

  • Improve hiring, training, and performance

  • Support leadership development and succession planning

• A good competency management system includes:

  • Defined competencies for each role

  • Skills assessments for employees

  • Targeted development plans

  • Continuous improvement and tracking

• Tools like Avilar’s WebMentor Skills™ help organizations scale competency programs and make smarter, data-driven workforce decisions.

For decades, organizations of all sizes and industries have relied on competency management to inform their strategic decisions and guide their workforce development initiatives.  Interested in learning more whether or not it’s right for your organization? Read our white paper, 8 Critical Success Factors for Competency Management Implementation to get started. Or contact us to find out how Avilar’s WebMentor Skills™ software can help.

 

*This post was originally published Oct. 25, 2019 and has been updated for improved readability.

RELATED BLOGS AND WHITE PAPERS

How to Up Your Competency Management Game for 2024
One Agency’s Competency Success Story and Unexpected Benefits
Integrating a Competency Management Method – 5 Steps