How to build a competency model

Are you struggling to define the skills and behaviors that drive success for your company? For many HR leaders, it can be challenging to align talent management strategies with business goals. Building a competency model can help you make sure that talent development and company growth are on the same page. 

A competency model serves as a roadmap, outlining the specific skills, knowledge, and behaviors necessary for employees to perform their jobs effectively. With the right model in place, you can streamline hiring, foster employee development, and drive organizational success.

In this article, we’ll explore what a competency model is, why it matters, and how you can create one for your organization.

What is a competency model?

A competency model is a structured framework that identifies the key skills, knowledge, and behaviors required for employees to perform their roles effectively. Competency models serve as a foundation for everything from recruitment and training to performance evaluations by communicating clear expectations to employees. 

Competency models are often confused with competency frameworks. While the terms are related, a competency framework is usually broader and can apply across multiple roles or departments, offering more generalized guidelines. Competency models, on the other hand, are typically role-specific and more detailed.

Why competency modeling matters

Competency modeling is a way to align talent with business goals. Without a clear competency model in place, HR teams may struggle to hire, promote, and develop employees in a way that supports the organization's long-term goals.

Implementing a competency model has a wide range of benefits, including:

HR and business alignment

A well-crafted competency model makes sure that the skills of your employees directly contribute to your business goals. In other words, your human resources plan and business strategy are aligned. 

For example, imagine a growing fintech company aiming to expand into new markets. An HR leader develops a competency model focused on sales, customer relationship management, and cross-cultural communication to support this goal. By aligning recruitment, training, and performance evaluations with these competencies, the company supports its staff to drive successful international expansion.

Efficient hiring 

Competency modeling significantly improves hiring by giving HR teams a clear framework to assess candidates beyond their resumes. Instead of relying solely on qualifications or past experience, recruiters can evaluate whether a candidate has the specific skills, knowledge, and behaviors needed to succeed in the role. 

By clearly defining the competencies required for each role, you can attract and hire candidates who are better suited to the job. This ensures a better match between the candidate and the job, leading to higher-quality hires and reduced turnover.

Improved decision-making

Competency models offer a framework for assessing talent, helping HR leaders make better decisions. Whether you're deciding who to promote, which employees need development, or planning for succession, competency models give you the data to form an HR strategy. 

For instance, when considering employees for leadership roles, you can make a decision based on key competencies like strategic thinking or communication skills. This means you’re making fair choices based on data, instead of subjective opinions. A clear framework for decision-making fosters transparency and ensures that talent management aligns with the organization’s long-term goals.

Steps to build a competency model

Building a competency model can seem like an intimidating task, but it doesn’t need to be complicated. Follow these five steps to make sure your competency model is effective and aligned with your organization’s needs.

1. Define key competencies

Start by identifying the core skills, knowledge, and behaviors necessary for success in each role. These competencies can be technical (specific job-related skills) or behavioral (communication, leadership, problem-solving).

For example, if you're building a competency model for customer service representatives, your key competencies might include active listening, conflict resolution, and time management. For a software engineer, the competencies could focus on coding languages, debugging skills, and collaboration.

2. Gather input from stakeholders

Competency modeling isn’t something you should do in isolation. Engage stakeholders from across the organization‌ — ‌department heads, team leads, and employees themselves‌ — ‌to gather diverse perspectives on what success looks like in each role.

For example, your sales manager may have insights on what makes a top-performing sales rep, while your customer support team could provide valuable feedback on the competencies on that bring customer satisfaction. 

3. Organize competencies into a framework

Once you’ve identified your key competencies, organize them into a structured framework. You can divide competencies into categories such as:

• Technical Competencies: Role-specific skills (e.g., coding, data analysis).

• Behavioral Competencies: Soft skills like communication, teamwork, or leadership.

• Interpersonal Competencies: Skills related to interaction, such as customer service or negotiation.

You can also create levels to show progression, such as:

• Foundational: Basic knowledge or skills needed for the role.

• Intermediate: More advanced abilities required for mid-level employees.

• Advanced: Expertise or leadership in the competency for senior roles.

For example, you might structure competencies for a project manager role as below. 

• Foundational: Time management, task prioritization

• Intermediate: Risk assessment, budget management

• Advanced: Stakeholder communication, team leadership

4. Implement and communicate the model

A competency model is only useful if your employees agree to its importance. When rolling out the model, ensure that managers and employees are trained on how to use it. Make the model accessible and explain how it will be used in performance reviews, promotions, and development plans.

Consider holding workshops or team meetings to introduce the competency model and provide examples of how it will benefit both employees and the organization.

5. Review and adjust regularly

As your organization evolves, so should your competency model. Review the model regularly‌ — ‌at least annually‌ — ‌and adjust it to reflect changing business needs, new roles, or emerging skills. Gathering feedback from employees and managers can help you keep the model relevant and effective.

A single platform for HR Management 

Building a competency model is just the beginning. To get the most out of your model, you need the right tools that help you manage your global team —preferably from a single platform. ‌

Remote HR Management helps you implement your competency model and get feedback from your team members. Track employee performance and assess employee progress against the defined competencies through Remote career journals. With Remote, your competency model can be applied consistently across different regions and countries, ensuring that every employee, no matter where they’re located, is aligned with your organization’s goals.

Whether it’s compliance, payroll, or performance management, Remote HR Management provides an all-in-one solution that grows with your organization. Create a free account with Remote HR Management today.