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Competencies Competencies vs Skills

Understanding the Difference Between Competencies and Skills

By HRSG Team on October, 21 2022

Article table of contents (jump to section):

  1. Basic definitions
  2. Structural differences
  3. Functional differences
  4. A foundational choice

Understanding the difference between competencies and skills is important because they represent two very different ways to define and manage organizational talent. In this blog post, we'll look at the practical and functional differences in the ways competencies and skills are used to drive the talent lifecycle.


Basic definitions

The difference between competencies and skills has confused HR managers for many years, whether they are early in their careers or seasoned experts.

In 2017, HRSG published a blog post titled, "Is There a Difference Between Skills & Competencies?" and it continues to be one of our most popular posts.

It's no wonder there is still some fuzziness around these terms because they are often used interchangeably. And on the surface, they appear similar, because they are both ways to define the type of talent the organization needs.

But dig a little deeper and you'll discover that skills and competencies are very different in the way that they are defined, structured, and used.

Let's start with high-level definitions for each term.

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.

As you can see, competencies are more inclusive, covering skills as well as knowledge (the understanding of the theory or practice of a specific subject) and abilities (natural qualities that enable someone to perform a task even if they've never tried it before).


Structural differences

Skills and competencies both define the requirements needed to perform specific jobs, but the way they are structured and used to drive talent management processes is very different.

Depth of detail

Skills tend to have a simple structure consisting of a short skill title: "client focus," for example. While this title indicates, at a high level, the capability required to perform the job, it doesn't provide a lot of detail. When the details aren't defined, it's left up to the individual to fill in the blanks, and that can result in misunderstandings.

A competency, by contrast, is structured to include more detail and nuance. In addition to a title, each competency includes a one-sentence definition. For "client focus," the definition is: "Providing service excellence to internal and/or external clients." Each competency also includes a collection of behavioral indicators that clearly define what performance looks like when an employee successfully demonstrates that competency on the job. Some of the behavioral indicators for "client focus" include: "Shows clients that their perspectives are valued," "Maintains service to clients during critical periods," "Enhances client service delivery systems and processes," and "Anticipates clients' upcoming needs and concerns."

Because competencies provide a deeper level of detail, it means that everyone, including employees, supervisors, and HR managers, shares the same understanding of what the behaviors for on-the-job success looks like.

Proficiency levels

Skills are not structured to include levels of proficiency. If an organization needed to hire someone with "data analysis" skills, they would need to specify the level of skill required by describing the need for basic, intermediate, or advanced data analysis skills. But there would be no way to communicate what each of those skill levels looked like. What one person considers "intermediate," another person may consider "advanced," unless those levels are accompanied by specific, universally accepted accreditation or certification. And in the case of "soft" skills, such as "client focus," this is very unlikely to exist.

High-quality competencies are designed with a multilevel structure that articulates up to five progressive levels of proficiency required for roles at different levels, from entry level to expert or executive level.

This structure provides more context and specificity about what a competency looks like at different organizational levels. While a client-service coordinator and the VP of client services may both have "client focus" in their job description, for the entry-level employee, a typical behavioral indicator might be, "Responding to client needs in a timely, professional, helpful, and courteous manner, regardless of client attitude." For the senior-level employee, a more appropriate behavioral indicator would be, "Determining strategic business direction to best meet clients' evolving needs."


Functional differences

The structural differences between skills and competencies affect how they can be used to define, identify, and develop talent.

When organizations use skills, too much is left undefined. Employees, managers, and recruiters are left to fill in the blanks, resulting in a confusing and disconnected talent lifecycle. What does "client focus" look like on the job? How do you determine whether someone is performing it successfully?

When organizations use competencies, the details and progressive levels result in a tool with far greater utility, because they give every stakeholder detailed information that they can use to evaluate, discuss, and improve performance in a specific area.

Here are some examples.

For interviewing, behavioral indicators provide the basis for behavioral interview questions. For example, if a role requires the candidate to "look for ways to add value beyond clients' immediate requests," the interviewer can ask, "Tell me about a time when you took steps to improve the service being provided to a client." Follow-up questions can then be used to tease out fuller responses: "What service was being provided? How did you go about improving it? How did the client respond?"

For development, the progressive levels of proficiency act like steppingstones, enabling people to picture the small steps they need to take to go from where they are now to where they want to be. These levels provide a continuum, from "striving to meet service standards" to "enhancing client service delivery systems and processes" to "evaluating the client service model and service standards to identify areas for improvement."

For managing, the level of detail that competencies provide gives managers the information they need to lead meaningful, actionable conversations about performance and advancement.

When a manager tells an employee seeking to advance, "Your client focus skills are not yet advanced enough for a senior position," it leaves both parties frustrated and lacking a clear plan of action.

But when the manager can refer to detailed behavioral statements, they can use that information to guide the dialogue with concrete examples, such as: "I would like to see you looking for ways to add value beyond clients’ immediate requests." This gives the employee a specific activity to focus on and a clear outcome to achieve and gives the manager an on-the-job behavior to observe and evaluate.


A foundational choice

The decision to choose skills or competencies is an important one, because the choice impacts the entire talent life cycle. These are the core units you'll use to define your talent, build the talent framework, and guide talent recruitment, management, development, and mobility.

The choice also impacts the technology solutions you invest in, since today's talent management platforms are built to accommodate (and are often pre-loaded with) either skill or competency content.

Because multi-level competencies are more detailed, objective, and actionable than skills, they provide a stronger foundation on which to build a talent management system that is transparent, accessible, equitable, and impactful.

Learn more about competencies: Read "Competency FAQs for HR professionals," a blog post that examines key definitions for competencies.

Dive into the details: Download "The HRSG Competency Toolkit," a complete guide to competency content, technology, and talent management.

Learn about CompetencyCore, an AI-powered platform for defining and growing talent with competencies.