Skills vs. Competencies in the Workplace (and Why They Both Matter)

Have you ever hired an employee who looked great on paper, with the exact skills and professional background required but who floundered once on the job? Unfortunately, most hiring managers and HR professionals have shared this experience.

But what causes this misalignment? And how can organizations both hire the right people and develop their existing employees to succeed in their roles? The answer is moving beyond a focus purely on skills toward a hiring and development approach that also considers the essential role of workplace competencies

Defining Skills vs. Competencies

Though the words are often used interchangeably, there are significant differences between skills vs. competencies. 

Skills are the highly specific abilities that an employee needs to perform their job. They can vary widely from role to role, encompassing anything from a bartender’s ability to mix a cocktail to a programmer’s ability to code to a doctor’s ability to have difficult conversations with patients. The term encompasses both hard skills, which generally refer to specific knowledge sets, and soft skills, which include traits like communication or time management.  

Competencies go beyond skills to include an employee’s knowledge and behaviors. For example, competencies may include strategic planning ability or analytical ability. Both require that an employee has specific knowledge and that they can apply that knowledge and their skills to new situations and demonstrate the behaviors needed to succeed at a given task. 

Graphic revealing the difference between skills and competencies

Examples of Competencies vs. Skills

Across industries, any given role will require both competencies and skills. Generally speaking, skills are easier to both train and assess—as an example, take the competency of digital literacy vs. the skill of using specific software. While it is easy to give a job candidate or employee a test assignment to measure their ability to use that software, it’s much more difficult to measure digital literacy. This would require an employee to be more generally able to utilize digital tools to answer questions and solve problems. 

Similarly, organizational leaders must have a strong communications competency. While communicating effectively with staff and stakeholders requires specific skills like writing, public speaking, and even diplomacy, a leader who is truly competent with communications will also be able to parse when and how to share a message and predict the potential reactions to different approaches. 

Why Both Competencies and Skills Matter

Imagine a software startup that is working to create a new tool. To build that tool, the startup will require employees to apply a number of specific skills, such as various coding languages, computer networking, data backup, and more.

But when not paired with competencies, those abilities might very well lead to a dud of a product. To succeed, the company will also need employees with key competencies. These may include the ability to think strategically about potential use cases for the software and how it may need to be adapted for different customers; the ability to lead a team effectively; and the ability to organize and manage a complex workload. 

Together, skills and competencies represent the value that an employee brings to a team, and organizations should consider the importance of both. 

Hiring for Competencies and Skills

In recent years, competency-based job descriptions have become popular. They have replaced the highly task-oriented ads of the past that focused on exactly what an employee needed to know how to do rather than their broader set of knowledge and behaviors. Instead, competency-based job descriptions recognize that success in a role will require traits like leadership or communications. They also ask candidates to demonstrate that they possess those competencies rather than focus on specific narrow skills.

Writing competency-based job descriptions is a valuable exercise for organizations and hiring managers since it requires them to distill down the knowledge and behaviors that are most likely to lead to success in a role. Further, it reduces the likelihood that candidates who have the talent and know-how to become standout employees will be screened out merely for lacking very specific skills that are easily learned on the job (such as a certain software program). 

However, many positions do require specific abilities for success and don’t offer the opportunity to learn on the job—for example, a senior accountant must understand how to read a balance sheet. 

Ultimately, hiring managers and companies must keep in mind that you can learn competencies as well as skills, and that each role likely requires its own unique balance of abilities and behaviors. Thus, a holistic view that takes both into account is most likely to lead to success in both hiring new employees and growing existing talent. 

How to Develop Competencies in the Workplace

Too often, competencies are seen as requiring innate character traits in addition to business-specific skills and knowledge. While the behaviors involved in competencies come more naturally to certain individuals than to others, it’s entirely possible to learn them. 

Every company can benefit from investing resources in their employees’ competencies. Strategies to develop competencies in the workplace include the following.

Checklist explaining four steps to develop competencies in the workplace

1. Integrate Competencies Into Employee Development Plans

Since competencies are less clear-cut than skills, leaders should communicate clearly with their staff about their performance in relation to required competencies. For example, a new manager may believe they are exhibiting leadership by assigning their direct reports projects and overseeing the results. Yet they might fail to demonstrate leadership behaviors by not giving their reports a voice or ensuring workloads are fairly balanced. 

To build that new manager’s competency, their own manager must provide clear feedback and identify the specific growth areas, then check back periodically on progress.

2. Provide Growth Opportunities

Many competencies require experience to develop. For instance, an employee asked to demonstrate the competency of strategic thinking must be given opportunities to problem-solve and plan on their own, rather than simply follow pre-defined instructions. 

Leaders can assign employees projects or provide cross-training opportunities across teams with competency development in mind as part of a broader employee development plan. 

3. Utilize Outside Training Programs

While experiential learning is valuable, it often does not provide a broader framework for acquiring and contextualizing the knowledge essential for growing key competencies. Dedicated programs, like those Emeritus offers, provide employees with the space and framework to apply their skills and identify the behaviors necessary to build competencies like strategic innovation or transformative leadership. 

4. Offer Mentorship

In addition to development plans built by managers, many employees benefit from a one-on-one mentorship relationship with a more experienced employee outside of their reporting structure. Since competencies are often broadly applicable across departments and roles, mentors can come from all different parts of the organization. For example, a new marketing director may benefit from the mentorship of a seasoned IT leader who can offer feedback that supports them in their journey toward leadership competency. 

A holistic employee development approach encompasses both skills and competencies and recognizes that each delivers a specific value to the organization. When considered in tandem, companies can build stronger, better-functioning teams that can both innovate and execute.

By Rachel Hastings


Are you working to identify and develop critical competencies in your workforce? The Emeritus Enterprise team can help you plan a curriculum to expand on existing skill sets and build competencies across the organization. 

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