A well-defined competency database is an organizational game changer. Why? Because organizations with this database optimize performance.
First, what is a competency and an organizational competency database? A competency is defined as a knowledge, skill, ability or interest. Many groups of competencies are inherently difficult to measure, such as strategic analysis or complex pattern recognition. Yet, many other competencies, such as spoken and/or written language capability, have accepted, standardized, and validated tests to determine if they are held and at what level of expertise.
A competency database looks like a standard HR database on steroids. It can include data on existing skills, proficiency (or expertise), certifications, abilities, hobbies and other capability attributes of the workforce. Wherever possible, competency data should include level of proficiency or expertise. In integrated human capital systems, competency data are automatically updated at completion of training and development experiences or when tests are passed to demonstrate a new level of proficiency.
Competency databases can be extensive; for members of the US military, databases contain up to 2,000 HR, competency or expertise fields of information per servicemember. In other public sector cases, organizations will capture 20-50 essential fields in their initial adoption. Mature databases often include 200-300 fields of information per employee. The best size is the one that meets the most needs of the organization. In general, competency databases tend to grow over time as more needs are found.
In essence, an organizational competency database is an essential enabler for effective communication of organizational and individual expectations, finding the right individual or team of experts, workforce and succession planning, defining future workforce needs and current hiring parameters, establishing meaningful career paths, efficiently assessing internal candidates for permanent and short-term assignments, and determining optimal training programs.
Why should an organization be concerned about the skills required to perform work and what competencies their employees currently possess? Because competencies are the most efficient language used in human capital management systems. Both individuals and positions are fully described with competencies held or competencies required. Without competencies, communications are inefficient and/or ineffective. The opportunity for miscommunication is reduced if a competency database is well established, well defined and well known by the workforce. An effective competency framework forms the basis for all HR functions and creates a bridge between employee performance and organizational results.
What does a competency system look like? Four levels of competencies, as shown in figure above, are sufficient to organize or build a competency database. The “Core” competencies are at the center; these are the ones required by all employees. As an example, all employees must hold the appropriate security clearances. A second level includes general “role-based” competencies to describe, for example, the general competencies required by all executives within the organization. Building on these are the competencies specific to “job families” and the specific functional/technical skills for a specific job.
When developing the competency model, it is critical that not only information about the current competencies are included, but that some forecasted competencies are incorporated as well. Focusing on future competencies will significantly and positively impact the talent life cycle, for instance, by identifying training needs, streamlining recruiting, and building a robust leadership pipeline – all leading to a higher return on investment.
An organization’s approach to establishing a skills inventory and a competency management system should account for the four foundational elements outlined below to avoid the pitfalls that have prevented the successful adoption of other skills inventories.
- A WELL-DEFINED CLASSIFICATION SYSTEM: Lack of definition leads to an unmanageable array of skills. A pre-defined classification system establishes standard definitions for skills and provides the basis for effective skills inventory management.
- A CONSISTENT UNIT OF MEASURE: The lack of a consistent unit of measure leaves organizations without a method to track or verify skill levels. Having an objective skills measurement system will provide the organization with detailed metrics for tracking skill levels across the enterprise even if each directorate or unit creates their own unique use of the system.
- AN EFFICIENT MEASUREMENT PROCESS: Skills inventory management initiatives can fail due to lack of employee and manager participation. Having an efficient measurement process and an online objective measurement system that provides fast and meaningful feedback are ways to encourage participation.
- A PRACTICAL TRACKING AND REPORTING SYSTEM: Skills data can become mired in disparate administrative processes before it can be manipulated into actionable information. A practical tracking and reporting system that automates the reporting process will protect the organization from this pitfall. The true value of a skills inventory is its ability to improve the efficiency and effectiveness of the organization. Because the skills possessed by the employees and the demand for those skills is constantly changing, it is important that the organization have effective skills inventory management tactics that give them the focus and the knowledge to meet their needs quickly and effectively.
Has your organization developed competencies? What lessons did you learn in developing them? Let’s share experiences! Leave a comment below, send us an email, or find us on Twitter.