5 reasons to work systematically with competence management

Talentech Knowledge bank 5 reasons to work systematically with competence management

Do you get the most out of your employees' competences?

A company's most valuable assets are its employees and the competences they possess - individually and collectively.

In order to be and remain competitive, it is therefore crucial that the company constantly ensures that they have the right competences with regards to the industry, market, and core areas.

This is where competence management comes into play.

Companies that work systematically with competence management, typically have a number of similarities:

  • Usually clearly defined competence sets are utilized, to provide clarity with regards to the company, the departments, and the employees' objectives. 

  • As a result, competence goals are established and worked towards at both a company and a job-role level, with a focus on development and progress.

  • It is possible to develop and align competencies expectations between manager and employee so that both parties know what is being worked towards and why.

  • It is easy and simple to search for and identifies both existing and necessary competences, etc. which means it is easier to map, assign, develop, and utilize the right competences.

  • It is possible to generate GAP analyses* on competences and associated goals, enabling competence development to be optimally targeted

*A GAP analysis shows the difference between the existing competences and goals and the desired competencies and goals.

The consequences of not working with competence management
can be significant and costly. We will delve deeper into this in the material that follows, in which we look at 5 of the most critical reasons for working with competence management.

Reason 1

You promote the achievement of company objectives

For many companies, it can be a challenge to ensure that the right competences are available and that they are continuously strengthened and developed, in alignment with strategies and objectives. This may be due to a lack of structure within a competencey management framework.

HR and managers can easily lose track of what competences are available, where they are, at what level, and whether there are competence gaps, dependence on a particular employee, etc. On the whole, it is therefore difficult to assess how the company's competences actually perform, and whether they support strategies and objectives optimally. At worst, it can make your business more vulnerable and less competitive. 

With this in mind, it's a good idea to have the right tools and processes for competence management within your company. With the right tools in place for competence management, you can work specifically with competences and goals at the company level as well as the job-role level, which provides far better conditions to ensure that managers and employees work towards and support the company's objectives. This enables you to better plan, manage, and administrate the company's competences in alignment with the company's objectives.


Reason 2

You align expectations between manager and employee

In addition to the above, alignment of expectations is also an important factor in professional competence management.

When you work systematically with competence management, you are able to ensure that there is a clear expectation alignment between manager and employee. With the right tools for competence management, you will be able to compare managers' and employees' self-evaluation of their own competences and thereby identify any gaps and potential areas for development. This also means, that you are able to ensure, to a greater extent, that your employees have or develops the competences required for the position they hold, and that they in turn fulfill the objectives of the tasks that they are employed to solve. It also helps to reduce misunderstandings and errors, as clarity is obtained from both sides about competence requirements, development needs and objectives, which are followed up on an ongoing basis.

Expectation coordination is one of the common areas of contention for both managers and employees when it comes to employee performance. Lack of alignment can easily lead to unique and potential competences not being developed or utilized optimally, or competences being wasted or leaving the company, for example. 

It's a good idea to work systematically with competence management, so that expectations are well-coordinated and aligned between manager and employee on an ongoing basis and in alignment with the company, department, and employee objectives.

Reason 3

You ensure the right internal development opportunities

For many employees, development opportunities are among their chief motivations, and in many cases, it is even a requirement.

However, for many companies and managers, it is not always easy to maintain an overview over time of the individual employees' competence sets, performance, and potential. It can therefore also be difficult to ensure that key employees and talents have sufficient opportunity to develop and grow within the company. In the worst-case scenario, it could mean that your most talented employees are frustrated and end up looking elsewhere. Conversely, it can also be difficult for managers to spot underperformers and employees who perform poorly and do not have potential within the company. 

This is all the more reason to ensure that you have the right competence management tools.

When you work systematically with competence management, you can identify and offer motivating development opportunities within the company. As a manager, you will have the best conditions for continuously assessing the competences, performance, and potential of your employees. It enables you to better identify and plan employee development and succession planning as well as ensuring that your employees' competences are utilized optimally.


Reason 4

You avoid expensive recruitment errors

When your company hires new employees, identifying and recording the necessary competencies required to fulfill the tasks and meet the objectives of a specific role is an incredibly significant task.

For many companies, this can pose a challenge. Often, neither sufficient time nor resources are allocated to mapping and setting out the exact competences required for a specific job profile. This may be due, among other things, to the fact that you do not have the right tools for this. This can result in expensive recruitment errors, which negatively impact the bottom line. 

This is therefore another reason why it is a good idea to work with competence management. When you work systematically with competence management, you gain a good overview of competences. You get the opportunity to search by specific competences, which enables you to better identify which competences are required in a new employee. 

When you have the right competence management tools, you can thus ensure that there are:

  • Clearly defined competence sets for job roles
  • Competence goals at both company and job level

  • Ability to rank competences on a scale

  • Good search functionality for identifying missing competences etc.

  • Opportunity to generate GAP analyses on competences and associated objectives.

An HR system with competence management functionality can have a significant impact on your company's ability to recruit the right candidates and in turn reduce recruitment errors.

Reason 5

You can improve the bottom line

In line with the above points, your company's talent management strategy, including competence management, can also be vital to company profitability.

An analysis, conducted by the Boston Consulting Group, indicates that there are large differences in both revenue growth and profit margins of companies that use effective talent management and those who do not:



It is not for nothing that companies invest
in HR systems that can help map and manage talent and competences within the company.

With the right competences in the right positions throughout the company, you can more effectively achieve company strategy and objectives for growth and overall profitability.

It is vital that managers and employees align expectations so that there is clarity in requirements, development, and competence goals. When you also have tools to continuously assess and plan internal development as well as development opportunities, you will be better equipped to retain employees and increase the total value of your employees.

With a good overview of competences and any competence gaps, you will also be able to better map any new competence requirements and avoid expensive recruitment errors.

All factors that can positively impact the bottom line!


Next steps

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