If you are in an industry where your workers need to be able to perform a specific task, chances are you have a list of skills or competencies they must be able to demonstrate. Chances are you use the terms skills or competencies interchangeably, even though they are in fact quite different.
The good news is that they are both equally important and every employee needs both skills and competencies to perform well, both as an individual and as part of the broader company. So, let’s break down the difference and why it’s important to frame them correctly for your employees.
When we talk about skills, we are talking about a set of specific learned abilities that your employees are trained to perform. Skills are typically broken into two separate groups: Hard skills and soft skills. Hard skills are those that are typically job-specific and are learned through formal education channels, such as learning to operate a forklift, performing computer coding, or entering data into a spreadsheet. Soft skills, meanwhile, are not typically tied to a particular function and are instead skills that would be universally appreciated in any role, such as written communication, time management, and even creative thinking.
Competencies are how a person performs while on the job — think of it by its word root, meaning that it is how your employee demonstrates that they are competent in their role. Competencies therefore encompass an employee’s proficiency in their role, their knowledge of their job, and their ability to perform their skills. Much like skills, competencies can be broken down further, with folks suggesting that they can generally be divided into three groups:
– Behavioral competencies, which are human skills used to solve problems, such as analytical ability and initiative
– Functional competencies, which are those competencies required for the successful accomplishment of a task, such as database analysis and design
– Professional competencies, which are the accelerators of performance and include the ability to lead a team or participate in strategy development or forecasting.
So how should you leverage skills and competencies to guide your business? When crafting job descriptions for attracting new talent, you’ll want to certainly include a list of skills necessary in order to fulfill the duties of the role. However, you’ll also want to include what the experts call core competencies, which are a set of key values and capabilities that everyone in the firm, no matter their role or level, should have in order to be successful within the company.
When orchestrating performance reviews, you’ll also want to feel confident that your employees have the skills necessary to perform their job. However, your actual review will focus far more on their competencies; meaning how well they are performing in their role. As a strong business leader or HR professional, ahead of any performance reviews, you should have a list of well-defined, multi-level competencies that can be extrapolated to the various levels and roles within your company to measure on-the-job performance accurately and fairly. For a really united front, we recommend that these competencies be developed in connection with any job description for a job opening and be integrated into a competency structure so that folks within your organization can determine how their skills, abilities, and knowledge apply to their own position, as well as others within the organization. Further, within each role, employees should be able to see what specific skills, behaviors, or knowledge is necessary to advance to the next proficiency level as a tool to empower employees to manage their career progression.
Should the performance reviews unearth any skills gaps, either for individual employees or entire departments, you can add to your training opportunities to address these gaps, be it offering a course on a new software or offering a brown box lunch series for those interested in shoring up a soft skill, such as public speaking or time management. Competency gaps, meanwhile, are generally a little bit more difficult to address simply because they speak more to exposure and experiences. However, you can help to address these gaps via mentorship opportunities, cross-department trainings, or other opportunities designed to allow employees to take on increased levels of responsibility.
How do you differentiate between skills and competencies within your business? How do you use these two metrics to guide your business decisions? Let us know in the comments.