Competency vs Skill – How Are They Different, and Why Does It Matter?

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When it comes to competency vs skill, many people use both terms interchangeably. But did you know that there is actually quite a big difference between skills and competencies (and an important one at that)? Read on to discover how they differ, and what this means for your organisation and hiring strategies.

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What are skills?

Skills are typically applied in a specific setting and lead to a desired outcome or result. They are more task- or role-specific than competencies and narrower in scope. A skill can be learned and improved through practice and experience. From a recruitment perspective, each role has a specific set of skills that the ideal candidate has in order to perform the role well.

A differentiation is usually made between hard and soft skills.

Hard skills

A hard skill is a measurable ability to perform a certain task. In a work context, this can be being able to drive a certain vehicle or use a particular software program. This means a hard skill is typically sector-specific and can involve specialised industry knowledge. Hard skills can be acquired and enhanced through training.  

Examples of hard skills:

  • Using SAP software
  • Playing the guitar
  • Speaking German
  • Driving a bus
  • Using programming languages

Soft skills

Soft skills are more about how an individual goes about their work rather than the execution of a hard skill itself. They are non-technical and not industry-specific, which means a soft skill can be applied in a variety of contexts. Notably, soft skills can also be developed and improved, for example through organisational training or coaching.

Examples of soft skills:

  • Excellent time management
  • Great organisational skills
  • Self-confidence
  • Professional demeanour
  • Good conflict resolution skills

When drafting a job description, it’s important to list the specific skills you want potential applicants to possess. This will not only help you be crystal clear on what exactly you need for each role, but also weed out unsuitable candidates from the outset.

Read more: Soft Skills in Recruitment: What to Look For When Hiring

What are competencies?

Competencies can be a rather vague concept and are generally much broader than skills. Although a competency can also include a certain level of skill, it also comprises a person’s values, attitudes, aptitudes and behaviours. Naturally, these aspects are much harder to measure and evaluate than skills – a dentist either knows how to extract a tooth or they don’t, whereas someone’s competencies may not fully come to light until well after they’re hired and you see them in action in the work environment.

When talking about competencies, there are typically several different yet related categories to consider. These are:

Core competencies

Core competencies are someone’s unique combination of knowledge, abilities and attributes that together determine that person’s performance at work. Someone’s core competencies – such as the natural ability to lead, be highly adaptable or think outside the box – can make them stand out from the competition and give an applicant the edge over others when it comes to finding the right person for a role. At the end of the day, a person’s core competencies can determine their employability.

Functional competencies

Also known as technical competencies, functional competencies are the abilities employees need to perform their roles on a daily basis. An accountant, for instance, will need to have an aptitude for numbers and an analytical mind to perform their duties well. Without this general competency, it will be difficult for them to perform calculations and use acquired accounting skills, even if they underwent the relevant skills training.

Professional competencies

Broader than functional competencies, professional competencies are attributes that help employees and professionals succeed in their roles beyond the mere technical aspects. For example, a sales specialist may have excellent product knowledge and sales skills, but also needs professional competencies such as networking and people skills to advance in their career. Having this type of competency can help employees and executives throughout their careers.

Related: 10 Recruiting Strategies for Hiring Great Employees

Benefits of distinguishing between skills and competencies

Being aware of the differences between competency and skill comes in very handy when creating job descriptions. Having an awareness of the differences between both will help you identify what exactly you need an employee to bring to the table and draft more accurate and effective job descriptions. Ultimately, this should attract more suitable candidates and end up saving you time and resources spent on recruitment. What’s more, you will also be able to ask more specific questions in interviews that can also give you insights into not only a candidate’s skills, but also their competencies.

What’s more, when you hire people with the necessary underlying competencies, you can close any potential skills gaps by offering your staff customised training. In this way, you can make sure you get the best of both worlds: highly skilled workers with the right blend of competencies for your organisation.

To sum up, employers considering the differences between skills and competencies will benefit from:

  • more precise job descriptions;
  • a better candidate pool;
  • more effective interviews;
  • the ability to eliminate specific shortcomings through targeted training.

How to interview for skills and competencies

Once you’ve identified your preferred candidates, it’s time to prepare for the interviews. When asking questions, make sure you don’t just focus on the applicant’s skills. Sure, it’s important to confirm that they can do what it says on their CV, be it driving a truck or using a scalpel. But the interview is also an important opportunity for you to confirm which competencies each candidate has, and how they would benefit your business. Although, as we have established, it’s much more straightforward to determine someone’s skills, you can take some steps to uncover their competencies as well.

To test skills, you could give a short test, such as entering a test order into SAP, or have the candidate type a short letter. When it comes to competencies, possible questions could include the following:

  • Describe a situation where you had to use different leadership styles to achieve a desired outcome.
  • Tell me about a time when you solved a problem in a highly creative way.
  • When and how did you first become aware of your mathematical aptitude?
  • Describe a situation where you had to use your people skills to change someone’s mind.

These are just a few examples – naturally, it’s advisable to identify the key competencies you want a new employee to have and then tailor your questions to those.

Read more: Pre-employment Assessments: Psychometric Testing, Skills and More

What’s more important, skill or competency?

In a nutshell: both! When hiring staff, you should strive to find the right blend of skills and competencies they bring to the table. However, as mentioned above, skills can be taught and trained, while competencies are generally more inherent and linked to a person’s personality.

While skills are more tangible and easier to measure than competencies, both are important in most roles. The secret lies in the right balance.

Related: How to Find Good Employees

Now that you’re aware of the differences between competency and skill, you may be able to fine-tune your recruitment process, from making your job ads more specific to ultimately hiring more suitable staff from the outset without trial and error. In addition, understanding your staff’s skill sets and individual competencies can help you build a stronger team, as you can mix and match them and create a well-balanced team to benefit your business.

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Indeed’s Employer Resource Library helps businesses grow and manage their workforce. With over 15,000 articles in 6 languages, we offer tactical advice, how-tos and best practices to help businesses hire and retain great employees.