What is competency management?

Competency management is the process defining the competency needs within an organization, assessing employees, identifying gaps and developing capabilities. It is a cyclical process that is sometimes incorporated within a performance management process.

How does competency management work?

The key steps in a competency management process are:

  1. Define competency needs
  2. Competency assessment
  3. Reporting and analysis to identify capability gaps
  4. Capability development

These steps are typically performed on a recurring annual basis.

Define competency needs

To determine competency needs organizations must ask themselves what skills and capabilities they need in order to carry out their strategic plan. The answer to this question defines the competencies required.

A number of approaches are used by organizations when defining competency needs. One approach is to define a core set of important competencies needed by everyone in the organization. Another is to define a core set needed by everyone and an additional set needed by leaders. A more detailed approach is to define role based competencies.

What is competency mapping?

Competency mapping is the process of defining the competencies needed by different roles in an organization.

Competency assessment

Employees are assessed against the competencies required for their role. This usually involves an employee conducting a self-assessment and their manager also completing a review. The process is described in detail in these two articles:

Reporting and analysis to identify capability gaps

Capability gaps are areas of competency where a person’s competence level is below that required for their role.

Once assessments are complete reports are used to identify capability gaps. It is typical for a person new to their role to have a number of capability gaps. As a person becomes more experienced in their role the number of gaps should reduce.

Capability development

Where a person has gaps in their capabilities, learning and development is undertaken to build their competence.

What processes does competency management integrate with?

Competency management contributes to a number of people management processes:

  1. Capability development
  2. Performance management
  3. Career planning
  4. Talent profiling (identifying high potential employees, sometimes called 9 box talent matrix)
  5. Succession planning

What are the benefits of competency management?

Competency management ensures that organizations are staffed with people capable of carrying out its strategic plan. It helps to safeguard companies from skill shortages.

Organizations with excellent use of competencies are 51% more effective in raising performance.1

What to avoid when implementing competency management?

The top 4 areas to avoid when implementing competency management are:

  1. If the competency management process is paper based it will likely provide too little information to be beneficial
  2. If not properly implemented employees and managers may not see the value in participating
  3. If the competencies or process are too complex people will have difficulty participating
  4. If competencies are not updated as technologies and skills evolve, assessments may be outdated.

More on competency management challenges and benefits.

Competency Management Systems

Competency management systems automate the process of mapping competencies, assessing employees, identifying capability gaps and planning learning and development. They increase visibility of the data and make the process more practical by reducing the administrative burden.


Benefits of competency management

Competency Assessment Software

Our competency assessment software will help you profile your workforce and find your best people.

Tools for HR, senior management and team leaders.

Guide to managing competencies

Guide to Implementing Competency Management

Effective use of competencies can give you a clear holistic view of individual and organisational capabilities, supporting identification of skill gaps and opportunities for growth. Get our Competency Management Guide.

The Ultimate Guide to Competencies

No matter what your level of understanding of competencies are, we’ve brought together a range of resources to help you.  See more.