Digitalization, labour shortages, and changing customer expectations – these are all aspects that organizations today must respond to. And it becomes much easier if you can leverage the right knowledge and skills. But does your team actually possess them? Competency management provides an answer. In this blog, you will learn what competency management is, why it is important, and which core competencies are essential.
What is competency management?
Competency management revolves around three things: what someone knows, what someone can do, and how someone acts in a given situation. It looks at a deeper level at the development and utilization of knowledge, skills, and behavioural traits. It also provides insight into what employees need to perform their work effectively and actively contribute to organizational goals. Competencies are linked to roles, positions, and strategic objectives. This mapping helps identify where employees currently stand, where development potential exists, and what steps are needed to actually improve performance. Competency management is therefore not only essential for HR, but also for strategy and daily operations. Increasingly, competency management software is used, allowing reliable data to provide a clear picture of the talent available versus the talent needed within the organization.
Why competency management is important
Without clear insight into competencies, it is difficult to make strategic decisions regarding personnel, development, and deployment. Competency management helps organizations develop talent in a targeted way. It also benefits employees by giving them insight into their strengths and areas for improvement, boosting motivation, accountability, and engagement. At the same time, managers can coach more effectively and manage performance at an individual level. Competency management also supports processes for recruitment, performance management, training, and succession planning. By clearly identifying the required competencies in advance, you prevent mismatches and invest more effectively in development. These advantages directly and positively impact sustainable employability.
Core competencies every organization should know
While every organization has unique competencies that align with its strategy and culture, there are several core competencies that are common across nearly all organizations. Some of these core competencies include:
- Communication skills – Essential for effective collaboration, handling complaints, and knowledge sharing. Clear communication reduces misunderstandings and leads to better results.
- Collaboration – In organizations where multiple disciplines come together and project-based work is common, collaboration is a key to success.
- Problem-solving ability – Thinking in terms of solutions and approaching situations analytically is crucial to prevent challenges from taking over and to make the most of opportunities.
- Independence and responsibility – Employees who take responsibility for their work and development contribute directly to improved performance.
- Digital skills – Digital competencies are indispensable in modern organizations. This includes not only working with competency management software but also the digitalization of processes, which requires both basic skills and specialized digital knowledge.
Competency profile: Definition and practical examples
A competency profile is an overview of the competencies required to successfully perform a specific role, function, or task. It not only describes which competencies are needed but often also the desired level of these competencies. This creates a concrete picture of the required competencies and allows them to be assessed in practice.
Creating a competency profile begins with analysing the role and its contribution to organizational goals. Relevant competencies are then linked to behavioural indicators, which clarify what the competency looks like in practice. The application of competency profiles differs depending on the purpose. For example, they help in recruitment and selection to objectively assess whether candidates fit the role, while in performance and development discussions, they provide a basis for feedback and development agreements. A digital skills matrix can assist in these applications. Practical example of a competency profile:
“A new team leader needs to be appointed. The required competencies for this role include leadership, coaching ability, decisiveness, and communication skills. Since the team leader will be individually responsible for managing a team of 12 employees, all competencies should be developed to an advanced/specialist level.”
The role of a competency manager in modern organizations
Mapping existing and required competencies in an organization is a time-consuming and ongoing task. This role is increasingly handled by a competency manager. In smaller organizations, this may be a single person, while in larger organizations, there may be a team of competency managers or collaboration with HR specialists. The competency manager ensures that competencies align with strategic goals and translates them into practical applications. This includes creating competency profiles, supporting managers in performance discussions, and analysing competency data. In organizations using competency management software, some tasks can be automated, allowing decisions to be based more on data and less on assumptions. This leads to more informed and effective talent and performance management.
Questions about competency management? Contact us!
It is clear that competency management delivers value for organizations. However, the right approach differs for each organization. A small team, for example, requires a different approach than a work environment with hundreds of employees. Do you want to know how to effectively map, develop, and deploy competencies for your specific organization? Or are you curious how EZ Factory’s software can help you gain control over talent and performance? Feel free to get in touch with us.