Business Simulation Game

Competencies vs Skills

In some ways, a skill and a competency are similar. They both identify an ability that an individual has acquired through training and experience. But the two concepts are not identical in terms of their definitions or the function they perform.

Skills vs competencies – the difference

So, what is the difference between skills and competencies?

Well, let’s look take an example. An individual can become a good presenter through practice, learning from others, and education; but in order to be a strong communicator, one must rely on a combination of skills and behavior and knowledge. A person can learn how to be a good presenter but only a strong communicator has advanced language skills, the knowledge of diverse cultures, and behaves patiently when communicating.

Thus, skills are specific learned activities like mopping the floor, using a computer, and stocking merchandise, while competencies are skills + knowledge + behavior like problem solving, communication, or professionalism.

“What” vs “How”

Skills define specific learned activities, and they range widely in terms of complexity. Knowing which skills a person possesses helps determine whether their training and experience has prepared them for a specific type of workplace activity. In other words, skills identify the “what.” They tell us what types of abilities a person needs to perform a specific activity or job.

But skills don’t give us the “how.” How does an individual perform a job successfully? How do they behave in the workplace environment to achieve the desired result? Competencies provide that missing piece of the puzzle by translating skills into on-the-job behaviors that demonstrate the ability to perform the job requirements competently.

The Bigger Picture

Another major difference between skills and competencies is one of scope: competencies define the requirements for success on the job in broader, more inclusive terms than skills do.

Think of skills as one of three facets that make up a competency: the other two are knowledge and abilities. To succeed on the job, employees need to demonstrate the right mix of skills, knowledge, and on-the-job ability. A well-defined, multilevel competency defines each of these elements in terms that allow managers and HR professionals to observe and recognize them through qualifying materials such as resumes, tests, and interviews, and through on-the-job performance in the workplace.

Why aren’t all companies competency based?

First of all. It can be time consuming. Skills are tangible and much easier to define while competencies are often broad and require more critical analysis. It is much easier to bullet point the skills of a job than it is to determine how the job contributes to the entire organization. Traditional job descriptions largely focus on skills, education and experience. To switch gears after decades of treating job descriptions as a list of skills and requirements takes a lot of effort. Reteaching your team, and even yourself, to focus on the bigger picture takes time and practices.

And lastly, we generally don’t think of competencies as a facet of the job description but rather as a part of the performance review. However, waiting to evaluate competencies during the performance process might be too late. Including and evaluating competencies early in the recruitment and training processes will help you hire the right people and cultivate a more capable team. Question is, how one can ensure efficient evaluation process?

Business simulations and competencies

Yes, business simulations (especially the customizable ones) can provide critically needed environment to test people during both recruitment and talent management. By recreating certain conditions or situations (simulating) and asking participants to complete certain tasks. Completion of the task and performance overall can show the true competence level and potential of the participant.

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