What’s the Difference between Competencies and Skills?

  • 74% of CEOs are concerned about the availability of key skills (PwC, 2020)
  • Only 28% of leaders are being developed in critical skills for the future (DDI, 2020)
  • Only 29% of new hires are highly prepared with the skills needed for their role (Gartner, 2021)

Competency vs. Skill

The Gap Competencies Fill

Best Practices for Developing Competencies

  • Linked to requirements: It’s necessary for someone to be skilled to perform well in the job.
  • Links strategies and culture: There should be consideration for how the company wants people to behave as part of the culture.
  • Distinct: There should be minimal or no overlap between competencies.
  • Observable: It should be easy to evaluate someone’s ability by demonstrating the competency. (This means it should not be something going on inside of a person’s head.)
  • Reliably interpreted: If one person looks at the definition of a competency and comes away with a different understanding of what high performance looks like, then it’s not well defined, and it’s not going to be reliably evaluated.
  • Defines levels of mastery: This goes hand in hand with being distinct, but you need to have meaningful distinctions between one competency, e.g., task delegation, and another level of mastery within the same construct, e.g., empowerment delegation.

An Example of How Using Competencies Benefits Organizations

  • Creates a broader range of meaningful opportunities and experiences for talented people to explore.
  • Increases retention because people have more meaningful opportunities.
  • Creates better, more empathetic leaders because they can experience other functional areas within the company.
  • Leads to better decisions because leaders with cross-functional experience will consider a broader range of implications.

How Competencies and Skills Can Work Together

  • Competency — An observable set of behaviors that defines effectiveness in a discrete area of non-technical job performance. E.g., coaching.
  • Skill — The ability to apply defined technical expertise required to complete a job task or activity. E.g., JavaScript.

Success Profiles: What Success Looks Like in a Job

The Value of Competency-Based Leadership Development

  • 1.8 times higher leadership quality
  • 1.4 times higher leadership success rates
  • 1.5 times stronger bench strength
  • Determine the potential readiness/risk for leaders to implement a new strategy.
  • Align leadership and professional development programs with the competencies that will lead to successful execution of current strategies.
  • Hire and promote leaders who have the competencies needed to be successful given the current organizational strategies.
  • Increase the objectivity and reduce the bias associated with leadership evaluations and promotion decisions.

Competencies Create Meaningful Work Experiences



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DDI is a global leadership company that helps organizations transform the way they hire, promote and develop leaders at every level. www.ddiworld.com