Almost two-thirds of organizations have no competency program, or are still working to define competencies for mission critical positions. This is a problem because while competencies are a powerful talent management tool, when not used along with an effective framework and implementation plan they often fall short. Last week we discussed two strategies for improving your competency initiative, and today we will look at other methods for managing competencies with ease.
Strategy #3: Align your competencies and business goals
Being able to translate your company’s vision and values to employees in ways that makes sense in their day to day work-life goes a long way to create a closer alignment between business goals and employee actions. Competencies are defined in behaviors that can be easily understood, and measured and embodied by employees. This means that they become a common language in reinforcing culture and a shared vision to achieve goals. Even though only 19% of organizations are able to achieve full alignment between competencies and business goals, those that do so reap great rewards. Brandon Hall Group discovered that companies that align competencies and business goals are 67% more likely than others to rate competency objective as effective. For more information, check out our article on how to align your competencies and business goals.
Strategy #4: Don’t neglect your competency budget
Brandon Hall Group has been studying competency management for several years, and has determined that competencies are among the lowest funded talent management initiatives. In 2013 competencies only made up 9% of the average talent management budget, which has since dropped to 7% in 2015. This year Brandon Hall Group looked at competencies in terms of amount spent, and discovered that more than half of organizations spent 3% or less of their talent management budget on competency management. In fact, one in five organizations had no existing competency budget. It may seem obvious, but the more you invest in competencies, the better the results.
Brandon Hall Group research shows that the organizations that spent 10% or more of their budget on competency management were found 68% more likely than other organizations to rate their top competency objectives as effective. Higher spending also has a direct correlation with an increase in KPIs. For instance, 45% of organizations that spent 9% or less of their talent management budget on competencies noticed an increase in organizational revenue. Meanwhile, 68% of organizations that spent 10% or more of their talent management budget on competencies noticed a revenue increase. This is a fairly significant difference, and shows the kinds of potential missed opportunities when neglecting competencies in your budget.
Organizations are unlikely to have meaningful success with competencies if they do not make an active, strong investment to create a well-developed competency initiative. This includes taking several steps such as budgeting properly, aligning competencies and business goals, leveraging technology, and more. To learn more about how to get started using competencies in your organization, or re-boot your existing initiative, contact one of our competency experts today!