What is Competency Management?

A few years ago, if you’d asked a healthcare organization’s leaders what competency management was, they couldn’t have told you. All they knew was that their staff members wanted to transfer more often than in the past. That was causing training costs to rise.

The head of talent for an audio tech company was similarly unfamiliar with the ins and outs. She’d just been presented with the CEO’s vision for the next five years. Now, he was asking her to analyze how well the workforce could deliver on that vision.

At an energy company, team leads noticed that the workforce was getting bigger and that they were having to rely more on contractors than in the past. They also noticed that prospective clients were starting to require that a detailed skills inventory of proposed teams be included on new project bids.

Enter competency management. Wait. What is competency management

Competency management is the process of defining the specific skills required for each role at an organization. That framework then underpins its entire talent management program and acts as an objective assessment framework for workers’ skills. Competency management also lets leaders and analysts see exactly how skilled a workforce is at an individual, team, and organizational level.

A competency management framework helps organizations win new business more easily and assemble qualified teams more quickly. It also helps cut down a worker’s time to productivity — the length of time it takes to get a team member to a point where she can work independently.

The leaders of the healthcare organization found that prospect gripping. Could they safely reduce the amount of time it took to get new and transferring workers up to speed? They worked with internal experts and external analysts to create a library of 6500 nursing skills. This list described the details of each skill required for each role.

It may sound like a heavy lift to create such an extensive resource, but after launching it, the organization saved nearly ten million dollars in redundant training costs over four years. It was an amount that far exceeded their expectations.

How? In the past, every time a staff member applied to a new unit or location, her skills had to be retested and her training repeated, even if she had decades of experience. Testing methods vary by location. There was no official way to validate and record what a nurse already knew.

Upon introducing competency management, the assessment of staff members was standardized. Supervisors could understand how much a worker already knew and where the gaps were. Then, they could simply train to the gaps. A massive amount of unneeded instruction was eliminated.

The ROI of competency management is significant. 

In the case of the energy company, standardizing skills meant the organization lowered the likelihood of dangerous, costly mistakes. It also meant being able to pull reports on the skill levels of workers, which made bidding on new projects easier. When potential partners saw the detailed skills inventory the company had at its fingertips, it set them apart. The quote-to-cash cycle became shorter.

At the healthcare organization, training costs plummeted. And, bonus! Nurses no longer had the sense that their expertise was being overlooked when transferring to a new unit. So, they felt more appreciated. Staff members also loved the added flexibility and mobility the new model gave them. If they were interested in trying a new role in one of the company’s other locations, they could instantly see how qualified they were. It made their skills more transferable.

Companies that compete heavily for talent may also be good candidates.

Studies show that job candidates—especially younger ones—strongly value flexibility and mobility. So, competency management can act as a kind of talent magnet. Creating a skills roadmap signals that there are clear paths for advancement. And as in the case of the healthcare organization, being able to assess a worker’s skills in a precise way makes it easier to offer them the possibility of new roles and locations in the future.

This touches on yet another benefit of a competency management model: it helps to create a learning culture. Combine a detailed skills roadmap with on-demand, bite-sized training, and development resources and you’ve just created a powerful way to raise the skill levels of your entire workforce.

Leaders get more value out of employees with this model because they can more readily prove skill levels to external stakeholders. They can also quantify exactly how well the workforce is positioned to execute a strategic vision.

Of course, competency management doesn’t make sense for every organization, but in industries that compete heavily for talent, such frameworks tend to pay for themselves quickly and many times over. The payoff also tends to be big for sectors that rely on a highly skilled or specialized workforce as well as heavily regulated industries and those with a lot of employees in the field.

Want to find out if competency management makes sense for your organization? Let’s chat.