The distinction between skills and competencies is a common point of discussion among HR professionals. While these terms are often used interchangeably, they’re not the same. Understanding their nuanced differences is essential for HR leaders seeking to build robust, adaptable and successful teams.

In this article, we’ll discuss the fundamental differences between skills and competencies, explore why each is crucial in the realm of HR and share how to use this to make better-informed decisions when it comes to talent acquisition, development and management. 

A skill is a concrete, learned ability that enables an individual to execute one or multiple tasks related to a job. Skills are teachable, either durable or perishable, and may be specific to a particular job, company or technology. The skills needed to excel in a job typically change over time due to the ever-evolving nature of the modern workplace.

A competency is a broader ability that includes a mix of acquired knowledge, behaviors, attitudes and life experiences that enable an individual to complete a job. Competencies typically take a longer time to master and may encompass groups of skills. 

For example, proficiency in a programming language such as SQL is a skill, while a related competency could be data-driven decision-making.

Each position within an organization necessitates a distinct set of skills that are essential for executing the associated job responsibilities effectively.

These skills can encompass a spectrum, ranging from fundamental to advanced skills, as well as perishable and durable skills. Whether or not an individual possesses or has the ability to develop a skill is pivotal in determining their ability to meet the expectations associated with their position.

Skills serve as the foundation upon which broader competencies can be built and developed. 

Understanding competencies is critical to nearly every facet of talent management — establishing job requirements, succession planning, assessing performance and identifying high-potential employees. 

Competent employees are versatile problem-solvers who draw upon a diverse range of knowledge acquired through various means like learning, experience, intuition and behavior. These competencies are especially valuable during times of significant organizational change or restructuring because employees can consistently and professionally apply their knowledge and skills. This helps make transitions smoother and facilitates the adoption of new processes and abilities with less difficulty.

Let's take a moment to examine some specific examples that fit into each category.

Skills may include:

Competencies may include:

While the distinction between skills and competencies can sometimes seem unclear, recognizing the subtle differences is necessary for effective talent management. Let’s review a few examples of how you can apply this knowledge to existing processes.

Recognizing the difference between skills and competencies in the hiring process allows for a more comprehensive evaluation of candidates, thus increasing the likelihood of hiring well-matched employees.

This includes generating more precise job descriptions, tailored interview questions and assessment criteria that accurately reflect the role requirements. This is especially important if your organization is taking a more skills-based hiring approach, that prioritizes skills and demonstrated abilities over traditional qualifications such as education and work history. 

Assessing employee skills and competencies is a crucial step for pinpointing skills gaps within your organization. A clear understanding of the difference is vital for determining the learning and development content necessary to bridge these gaps. 

For instance, let's say your company is preparing for a digital transformation. In such cases, training content might suffice for specific short-term technical upskilling needs, like when implementing new software across the organization.

At the same time, the company might also invest in competency development programs for its managers to enable them to effectively lead through this upcoming change. These programs could include formal education offerings that grant degrees, certificates, and other credentials, contributing to the long-term development of the needed competencies.

Knowing the difference between skills and competencies helps to accurately identify and develop future leaders within your organization. This also applies when considering an internal candidate for a promotion or reskilling for an entirely different part of the business. 

In both cases, you can objectively assess employee capabilities in relation to the job's technical skills requirements while also evaluating if they have the broader competencies required for a new role. This ensures that the most qualified individuals are selected for roles, minimizing bias in the decision-making process.                      

While some may argue that skills vs competencies is just a matter of semantics, you now know the key differences between the two terms and why it matters. Armed with this knowledge, you can better align your organization’s talent strategies to the greater needs of the business.

Discover more L&D resources: Download the skills disruption playbook to learn why a skilled workforce is an organization’s biggest competitive advantage during times of uncertainty.