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The question of whether to use competencies or skills as the building blocks for your talent ecosystem is an important one. But the answer to that question is not always clear. Search the internet and you'll find hundreds of articles recommending competencies vs skills—and just as many recommending skills vs competencies.
As a company that specializes in competency content, software, and services, it's clear which side of the argument we support. But what's more important is that HR managers understand the fundamental qualities of each.
We touched on some of the functional differences between competencies and skills in a recent blog post: "Understanding the Difference Between Competencies and Skills: A Practical Guide." In this post, we'll look at some of the conceptual differences in the way these two approaches help you define and quantify talent.
First, a quick definition of each.
Skills are capabilities developed through training and practice. When they are "hard" or technical skills, they are often developed and validated through testing or certification. Skills tend to be structured as simple labels, such as "Excel" or "critical thinking" that leave the details open to interpretation.
Competencies are defined as the abilities, skills, knowledge, motivations, and traits needed for successful job performance. These dimensions are translated into behaviors that successful performers demonstrate on the job. Because of this, competencies tend to be structured as in-depth collections of observable behaviors.
Let's look at how these two very different talent tools are used to support the talent lifecycle.
Think of skills as ingredients
Skills are labels that usually take the form of nouns, such as "attention to detail," "programming," and "project management." You can think of them as labels that indicate what goes into the job, the way a list of ingredients on a package indicates what you'll find inside. These labels are short and simple, and they appear on job descriptions as long, bulleted lists of requirements or on resumes as long, bulleted lists of employee capacities.
Skills support the idea that jobs and employees can be broken down into granular components. In a skill taxonomy, when there is a high degree of overlap in the specifications on a job description and a resume, there is likely to be a good fit between the job and the candidate.
Think of competencies as recipes
Competencies are more complex than skills, because they express not only what the employee does but how they do it and what it looks like when they do. While skills indicate what goes into a job, competencies describe how the job is done. For every competency, a set of "behavioral indicators" describe what success looks like when an employee demonstrates that competency on the job. This gives employees more clarity in terms of what is expected of them and gives managers and HR managers the ability to pinpoint areas where employees are or are not meeting the requirement and what they can do to ensure they meet it in future.
While skills are like a list of ingredients, competencies are like recipes for performing a job, including not only the ingredients but the instructions that employees need to follow in order to use those ingredients to achieve a specific outcome.
Competency fundamentals and advantages
Providing employees with the complete recipe instead of a long list of ingredients offers several key advantages. Compared to skills, competencies help HR managers define job requirements with greater specificity and objectivity, prioritize those that are most important to performance, and help employees see where they could take their career in future.
Defining job requirements
Skills are a way to label a job requirement, but because they don't include details, there is no way of knowing whether those labels are interpreted the same way by employees, managers, and HR managers. Without additional context, "attention to detail" could mean an ability to identify spelling errors, a proficiency in mapping out complex logistics, or something else entirely. While modifiers such as "basic," "intermediate," or "advanced" can be added to a skill, it still doesn't solve the problem. What's "basic" for one individual may be "advanced" for another depending on many factors. Unless everyone has a detailed "recipe" to refer to—one that provides objective, observable behaviors—the system will create confusion and frustration.
Identifying job priorities
Skills appeal to HR managers seeking granular units that can be swapped in and out of job requirements quickly for a fluid, agile approach to job-building. But this often results in job descriptions that are little more than a laundry list of skills. When job descriptions follow this format, employees and managers can struggle to identify which skills are most important, and which can be grouped together and worked on simultaneously.
Granularity is good, but there needs to be an organizing principle or a way of crystallizing the story to help people understand the patterns. Each competency provides that big picture by rolling up a collection of related abilities, skills, knowledge, and motivations so that people can clearly see how they all contribute to the successful performance of a particular job requirement. At the same time, the list of behavioral indicators provides a similar level of granularity to skills, which allows employees to focus on a single area within a single competency.
Supporting career pathing
Skills are small and easy to group together and swap in and out, but because there is no underlying framework to guide the way skills are applied, there is no way to ensure continuity between jobs in the same job family, department, or discipline. At best, a "basic" skill for an entry-level job may also be included in a mid-level job at an "intermediate" level. As a result, it's difficult, if not impossible, for employees, managers, or HR to see how the requirements between different jobs overlap or diverge. This, in turn, makes it hard for employees to explore career paths and pursue new opportunities within the organization.
Career pathing has shifted from a nice-to-have to a must-have as talent becomes harder to find and retain. Employees are placing career growth at the top of the priority list, and when they can't pursue a path to growth within the organization, they look beyond it. According to research from Monster, nearly one in three workers (29%) want to quit their job due to a lack of growth opportunities.
Skills, competencies, and "powerskills"
As "soft" skills become increasingly critical to the world of work, they have undergone a makeover. Soft skills may have taken a back seat to hard skills in the dot-com era, but today, everyone from Udemy Business to Josh Bersin is talking about "powerskills"—the soft skills that are integral to the jobs of the future. The change marks a growing recognition for the importance of hard-to-define, hard-to-quantify elements such as "empathy," "design," and "communications."
In addition to replacing the need for a wide range of technical skills, rapid digital advancements are significantly shortening their shelf life. As Bersin puts it, "Hard skills are soft (they change all the time, are constantly being obsoleted, and are relatively easy to learn), and soft skills are hard (they are difficult to build, critical, and take extreme effort to obtain).”
Learn more about competencies:
Read "Understanding the Difference Between Competencies and Skills: A Practical Guide," a look at the practical differences in the ways competencies and skills are used to drive the talent lifecycle.
Download "The HRSG Competency Toolkit," a complete guide to competency content, technology, and talent management.