Competency models or skills? What you need to know

Change isn’t coming: it’s here, and with it comes a list of uncertainties. As talent leaders continue to address skill gaps, transitioning away from strict job titles and toward more flexible skills-based work, employees powering the transformation are dealing with a new set of unknowns. What will my job be in the next five years? Will my job still exist in five years? What skills do I need to stay valuable to my organization?

As questions continue to mount, it’s no surprise that anxiety is also increasing. A recent Gallup survey shows that nearly one-fifth of all US workers describe their mental health as “fair” or “poor”  even before the current economic turbulence of industry-wide layoffs, bank closures, and mounting financial pressure. The transformation of work is cited as one of the leading causes of this new wave of stress, with 45% of HR leaders reporting that their workers are fatigued from the amount of change that has taken place over the past few years.

Where leaders can play a role in helping employees feel comfortable navigating these changes is in rethinking the way employee performance is measured, and how those competency models can reflect the future of a skills-based organization. Skills will continue to gain prominence, and showing how the transformation benefits workers is just as important as implementing the transformation itself.

Increasing buy-in from employees comes with a more comprehensive understanding of what’s to come. Using outdated, job-specific competency models as a measure of success is anachronistic at best. By transforming competency models in a similar fashion to the changes happening across skills-based organizations, leaders can continue showing employees just how valuable their contributions are—far beyond their job title.

What is a competency model?

A competency model is a framework used to identify and define the skills, knowledge, and attributes necessary for successful performance in a given job role or responsibility. It is often used to guide the development of training programs, hiring decisions, and performance management strategies. Competency models can include both technical and behavioral competencies, which are typically organized into categories such as knowledge, skills, attitudes, and values.

How competency models differ from other types of job analysis is that instead of being focused on a specific position, competency models are more people-focused. The two methodologies often overlap, but where job analyses often reflect the output of an individual as it relates to their job title, a modern competency model will be better at reflecting the full possibilities and capabilities of a worker (a job analysis will show how many projects a project manager has completed, while a competency model will show if a project manager has the right skills to optimally complete projects in the future).

For example, one way a modern competency model could function is to assess the problem-solving, communication, teamwork, adaptability, and leadership qualities of an individual. While each of those may also show up in a project manager’s job analysis based on the performance she or he was able to cite over a given period, by looking at the skills that make for a good project manager, talent leaders can see who at the organization would be qualified for a similar opportunity outside of those already with the title.

Unmooring business-critical competencies from job-specific functions is the first step in transforming a company into a skills-based organization. When talent leaders understand the full breadth of skills and capabilities within their organization, they can begin breaking through the silos and barriers holding back more agile ways of work. Modern competency models are more adept at showing leaders which employees have the right skills for the future of work, rather than simply showing how well an employee fits into the position currently assigned to them.

The 5 types of competency models

Depending on the purpose of the model—measuring either technical or behavioral competencies, organized into categories like knowledge, skills, attitudes, and values—a different style of competency model would be more appropriate than others.

Organizational core competency model

A baseline assessment that evaluates the employees’ capabilities to assess how they align with enterprise-wide expectations. With this model, an organization can understand and keep track of essential competencies and strive toward building a workforce that reflects its core ethics.

Functional competency model

Slightly more specific than the organizational core competency model, a functional competency model identifies and evaluates the skills needed for an employee to perform positively within a specific function or department. These models are designed to align mission-specific expertise with role-specific abilities, making sure that the person performing a function is equipped with the right skill set.

Job competency model

Even more granular than the functional competency model, the job competency model breaks down the knowledge, skills, abilities, and other characteristics required for optimal performance in a particular job or role. Often referred to as KSAOs, these models offer the guidance needed for employees to see how well they meet the requirements of a job.

Leadership competency model

Part of any worthwhile talent strategy is a succession plan that addresses the most critical roles, and a leadership competency model can help stakeholders understand which employees within their organization could be a fit. By focusing on the competencies needed for leadership roles, organizations can identify and develop leaders internally with the right mix of skills, abilities, and experiences to strengthen the company as a whole.

Custom competency model

As the name suggests, a custom competency model takes elements from the other models listed earlier and combines them to fit a specific need. While every position may not need strong leadership capabilities, adding elements of a leadership competency model to a role-specific assessment may give insight into who could possibly fill a senior role as the need arises.

Why skills are a better fit for the future of work than competency models

In brief, competency models are a product of past organizational structures trying to find a niche in a modern, agile, ever-connected world. With a history that dates back to the mid-20th century, competency models were the transformative step business leaders used to measure success as opposed to intelligence tests, which were the standard before competency models took over.

With their company-specific assessments and standardized approach, competencies worked for an organizational structure that valued vertical rigidity over dynamism. However, skills are proving to be the more attractive way of measuring a modern worker’s abilities as a McKinsey survey shows that closing skill gaps is a priority of 58% of talent leaders.

While it may not be feasible for an organization to scrap its competency models all at once, it’s important to understand where a skills-based architecture can provide companies with greater insights and actionability.

• Skills can be standardized across an entire organization: By looking at a skill as independent from the work being done, HR leaders can gain a greater understanding of what skills reside within their people regardless of their department or job title. Paired with a workforce intelligence solution, this skills data can help inform talent decisions based on industry trends while competencies would only show what exists against company norms.

• Skills can be developed and tracked for progress: Where competencies tend to skew toward the “big-picture and aspirational,” skills are more targeted toward the foundational elements of work and therefore easier to track their development over time. L&D programs can be made available to employees looking to improve in a skill that applies to their individual career goals, rather than attempt to gain total competency in a field or role that may not be their ultimate goal.
• Skills are what power talent marketplaces: For any company using a talent marketplace to enable more agile, dynamic ways of work, the organization must first understand what skills their employees have. Competency models tend to represent a specific job or business function of an organization, making it difficult to understand how an employee could be a fit outside of their designated role.

How to use skills to supercharge your talent strategy

If creating a dynamic, agile organization is at the top of your priority, skills may offer a more comprehensive view of what your people are capable of. By understanding the aptitudes each person brings to the table, talent leaders can deploy them at scale through a talent marketplace. Competency models, while useful in the past, still largely rely on job-specific or general assessments that can misrepresent the full story.

Skills-based models take the learned and applied abilities of a worker relevant to their performance, showing talent leaders which people are the right ones to get the job done. Competency models, with their reliance on rigid definitions and specificity, are not nearly as agile as skills and can’t be transferred across an organization.