Difference Between Skills And Competency

Diwakar Chittora Jun 03, 2021

‘Skills’ and ‘competencies’ are two terms which we often come across when searching for jobs. More often than not, these words are used interchangeably as the common assumption goes that they are synonyms of each other. However, that is far from true as there is a significant difference between the two terms. For employees who are on the lookout for a new job or wish to understand how they can advance in their career, it’s essential that they recognise these differences.

In the modern workplace, both terms are used for referring to the abilities of employees. Both are vital for individual and company success. And every employee requires relevant skills as well as relevant competencies for doing their job well.

Skills vs. Competencies: A Comparison

Skills can be thought of as the specific learner abilities which one needs to perform an assigned job well. For example, an accountant needs to know how to handle accounts while an engineer might be required to know coding, welding or writing tenders. However, there is a distinction between hard skills and soft skills. The former is a quantifiable technical skill that a professional can demonstrate by showing their qualifications and professional experiences gained over the years, while the latter is a non-technical skill-less rooted in any specific vocation. Computer programming or gaining proficiency in a foreign language are examples of hard skills while a soft skill could be teamwork, time management, creativity and oral communication.

On the other hand, competency is a slightly broader term that refers to a person’s knowledge and behaviours required to achieve the desired outcome in their jobs. For instance, improvement of business process, data-based decisions, strategic planning etc all makeup core competencies that organisations need their employees to have in today’s time. Competencies elucidate further how a person’s behaviours help achieve desired results in their professional role. Just like skills, there are different kinds of competencies that any successful employee possesses to rise through the ranks of an organisation. A core competency is a behaviour that is integral to a person and how they work and potentially sets them apart from their colleagues.

Importance of Skills & Competencies in Employee Success

A major reason why skills and competencies are often mentioned in business conversations is that the company management wants to know which employees have the necessary skills or competencies for individual success and company success. Many companies draw up an employee skill matrix or employee competency matrix which helps them understand and pinpoint where employees or teams have the requisite skills or competencies which the organisation seeks.

As new technologies continue to evolve and business pressures rise, the skills required for employees to succeed have also changed with time and aren’t the same as the skills that they might need tomorrow. The misalignment of employee skills with available job requirements have become a major cause of concern for companies. So, there is a need for individuals to invest in developing the requisite skills and competencies that will help them get the job that they aspire for.

Companies that want to overcome this shortcoming and improve their employee abilities are investing in learning programs and learning management systems to help their talents gain the skills they need. The best method to design a learning program that will deliver results is understanding how existing employee skills can be leveraged and using a competency-based strategy for learning.

However, many experts believe that for the holistic growth of an employee, it’s necessary to go beyond the skills and focus on acquiring the necessary competencies that would not just help the employee to grow but even prove profitable for organisational growth. Competencies have time and again been used as a framework to help focus the behaviour of the employees on things that matter the most to a company and help drive success. These provide a common way for harmonizing, selecting and developing talent. The benefits are proven for employees, managers, and ultimately, the company.

Summing Up

Overall, for employees, skills and competencies offer a description of the standards of excellence required for current roles and potential future vacancies – in other words, they lay down what ‘great’ performance is. For managers, they provide vital resources using which they can select and hone employees, and offer language for giving performance feedback. For organizations, competencies present an action-oriented strategy for demonstrating the values and qualities that are key to success. As a company grows, the sole focus on skills without a look at the wider competencies will not suffice to develop leaders of tomorrow and drive career enhancement for employees.