How to develop a competency framework

The company’s success is affected by numerous criteria, but one of the most crucial ones is the right talents with the right competencies.  

Competencies are the integrated knowledge, skills, judgment, and attributes that people need to perform a specific job effectively. By defining a set of competencies for each role in your business, you can communicate to your employees which behaviors the organization values and needs to achieve its objectives. The question is: how do you define these sets of skills, behaviors, and attitudes that employees need in order to perform their roles effectively? How do you know they’re qualified enough for the job? In other words, how do you know what to measure? 

To define and evaluate competencies within their organizations, HR leaders develop a competency framework. In this article, we’ll take you through a step-by-step guide to creating a competency framework for your organization. But first: 

Well, there are several areas this instrument can come in handy. Specifically, it helps to: 

• Select and recruit new staff more efficiently  
• Select candidates for the openings from the internal talent pool 
• Detect skill gaps   
• Provide more tailored training and professional development plans 
• Do regular performance assessments more accurately 
• Level up succession planning  

The competency framework done right comes with a bunch of benefits helping HR leaders achieve tangible results: 

• Translate business strategies into concrete behaviors expected from employees 
• Set specific and clear expectations regarding the performance of specific employees or teams and departments 
• Align the company’s strategy with specific future skills, competencies, and talents this company need to embrace to implement its strategy 

Besides, as the competency framework allows to perform professional assessments more carefully, it helps make more informed talent management decisions. To make this happen, role-based competencies must be specific, clear, and easy to understand and implement by both HRs and employees.

One more thing, making a competency framework an effective instrument is its interactiveness. Specifically, it encourages employees to collaborate on building and improving their skill profiles, helps to build trust, increases employee engagement and organizational efficiency.

Competency frameworks may differ in their structure: be a generic list of universal competencies applied to all employees (e.g. digital literacy, foreign languages knowledge, teamwork) or a more complex system of skills related to specific jobs and seniority levels. If your goal is to build a future-oriented organization, we suggest going for option two and build a competency framework focused on specific skills profiles. Yet, whatever approach you might choose, here’s your five-step guide on how to develop a competency framework from the ground up. 

Before you roll out the sleeves and start developing your competency model, start with fundamentals: design the principles critical for your competency framework. You can take off these three: 

1. Involve employees. Apparently, you need to understand the company’s vision and goals. However, to get all the role aspects fully, you can go to the source – the person doing the job. This will allow you to discover more insights into what makes a person successful in that job, plus, it’s an opportunity to engage employees in the process. 
2. Communicate. People tend to get concerned about the HR instruments and methods especially focused on performance reviews. Let your employees know why you’re developing the competency model, how it will be developed and used. The more transparency you bring in advance, the smoother the implementation process will go.  
3. Use relevant competencies. Make sure that you include only competencies that are relevant to specific roles you’re going to work with. If you include irrelevant competencies, people will probably have a hard time relating to the framework in general.  

Once you’re ready with key principles, define the purpose of your competency framework. For instance, you may want to recruit the best matching talents for the new openings, use the competency framework to fine-tune your training programs, or spot and close skill gaps. Make your purpose very specific and then align it with the C-suite and managers to make sure you’re on the same page about ways you’re going to use the competency framework impact. 

With the purpose set and clear, think of your framework structure and make sure you include essential components, like: 

• Core competencies that typically apply to all the roles (e.g., digital skills, soft skills) 
• Competencies related to specific jobs 
• Technical competencies that outline required technical expertise, skill and knowledge (e.g. hands-on software tool, technologies or job-specific platforms) 
• Leadership competencies that, apparently, define leadership performance 

It would be great if you can get together people looking at employees’ skills and competencies from perspectives, specifically: a C-suite representative, an operations executive, a recruiter, a learning and development colleague.  

This diversity will provide you with all kinds of angles on key competencies: from skills essential for hiring the right-matching candidates to competencies important to train for upon hire and strategical skills the organization will need to have aboard by 2025. 

A few ways to get maximum insights from your colleagues, executives, and employees regarding the key competencies might include: 

• Observation of how people are performing their work. This is especially relevant for jobs that involve hands-on labor, like manufacturing, operating with machinery, designing engineering drafts, etc. 
• An interview involving your project team. You can go for a group conversation or 1-1 interviews; your main goal is to get as many valuable insights into what’s needed for each role’s success as possible.  
• A survey that will help you perform a thorough job analysis. 

Once you’ve collected some data, got a bunch of opinions, and done your research, it’s time to assemble your draft version of the competency model.  

At this stage, it’s essential to check you’re going to include only competencies you can measure or reconcile with specific seniority levels, like Junior, Middle, Senior, Expert. If you go for a seniority level approach, take care of an unambiguous legend for each one to make sure that everyone who will work with your framework (including employees) clearly understands what distinguishes Middle from Senior. 

Next, narrow down the number of competencies per role up to 20 max and group them into clusters. You can split your competencies into Hard skills and Soft skills groups or use a more detailed and job-specific approach for creating subgroups. Make sure you name the competencies clearly, and they don’t require much explanation (e.g., Problem-solving, Teamwork, Active listening). 

Once you’re done, validate and revise the competencies to ensure they are relevant and crucial for effective work performance in specific job roles. When everything looks good, it’s time to test the framework and gather feedback. For this, involve your project team and a few employees ready to participate in this experiment and share their thoughts and comments. A skills matrix is a convenient framework to organize these insights.