Considering the sheer scale of the tech talent crunch being experienced by companies around the world, competency management has never been more important.
Business leaders need to understand what it is and how to harness its benefits in order to unlock the full potential of their workforce. Ultimately, the right skills are the foundation for broader organizational success.
To help you understand and utilize competency management to unlock your organization’s full potential, we’re covering what it is, why it’s important, and how you can effectively leverage it’s benefits. You’ll then be equipped to choose the right competency management tool to unlock a long-term competitive advantage.
What is competency management?
Competency management (also called skills management) is a process by which organizations identify the critical skills their employees need to fulfill their individual roles and contribute to the organization’s broader goals and long-term success. In doing so, it helps ensure that new products and services offered in the future will have the skilled talent needed to support and deliver them.
These may be hard or soft skills, as long as they represent skills or competencies essential to fulfilling the relevant individual and organizational objectives. This may be done through a skill management platform or more informally by managers.
Why is competency management important?
With some estimates placing the cost of the global talent gap alone at a staggering $8.5 trillion, it’s clear that addressing this gap is vital. Too many organizations are focused on the promise of technologies like Artificial Intelligence to automate and improve everything from data analysis to product design without giving sufficient attention to the skills needed to unlock their true value.
Technologies without the skills needed to use them are about as useful as a car without someone capable of driving it. An AI algorithm is simply not useful without people like data scientists to clean and prepare the data it uses.
Of course, providing the training needed to get those skills has to begin with understanding the skills your employees currently have today and those they will need in the future. This is where the importance of competency management comes in. It’s what enables leaders to see skills gaps throughout the entire organization so they can better allocate resources to address them.
Competency management benefits
Ultimately, the benefits of competency management arise from the benefits of the skills you can develop from it. Seeing the gaps alone isn’t helpful. So, consider the benefits of competency management arising from the cost of the skills gaps your organization has (essentially, your piece of that larger $8.5 trillion pie).
Competency management also enables you to identify where to best invest in your talent, improving their performance and even retention. While it’s hardly shocking that improving key skills enables people to perform better, the retention benefits are less well-known. In fact, a full 77% of employees who leave a job report they would have remained had their career development been more of a focus.
Finally, competency management software can actually reduce costs. Recruitment costs are high and it takes a long time to source and onboard talent with the candidate not being effective until a few months in role. If organizations upskill existing talent to step into new roles, they not only retain talent, but the employee can be more effective for the business in a shorter time frame than an external hire.
How to make competency management work for your business
The key to making competency management work is finding the right system to use and the right partner to help implement it. If the competency management framework you use feels cumbersome or intrusive to your team members, you’re far less likely to get the full benefits of it. The same applies to cases where the tool is not adequately explained to the employees who will use it, as it’s a tool for their own career development as well.
So a system must be easy to use. But it should also create visibility for everyone from managers to senior leaders to see and understand how the career and skill development of their team members is taking shape via a consolidated overview for the organization. It should also allow you to sort skills by subject or roles in order to quickly identify patterns and areas in need of greater investment.
Likewise, it’s essential that individual employees have their own skill overviews to track their progress on a clear career path.
The best systems will also enable you to quickly identify who in your organization may be a good fit for a new role based on their skillset. Finally, from the perspective of everyday users, a system should enable them to clearly choose and follow a career path based on their skills and role.
Armed with this information and these capabilities, you can make better decisions, identify top performers, and help those in need.
Using a competency management system
Here at Talentwize, we take a holistic approach to competency management. This happens by breaking it down into three stages: know your people, grow your people, and retain your people.
Instead of simply providing a tool for identifying skill gaps, our approach emphasizes the full process. This enables you to track progress over time while more easily understanding the bigger picture. However, the system should also offer benefits to the people being accessed, enabling them to track their own progress and gain a better perspective on their career development.
If you’d like to discuss how a competency management system can transform your organization, please reach out to us.
