23 Nov How a competency framework impacts organisational performance
A competency framework provides a benchmark for assessing the knowledge, skills, and abilities of a company’s current and future human resource needs. They are designed to be benchmarks for communicating which behaviours are required, valued, recognised, and rewarded for specific roles in an organisation’s workforce. Competencies provide companies effective and valid criteria for evaluating performance in the workplace and encourage personal development. Using a set framework helps HR and managers to identify and train any ability gaps in their workforce, and efficiently hire to fill any remaining skill gaps.
Benefits of having a competency framework in an organisation
Companies are now embedding competencies in all human resource management systems that set standards in the following areas of the organisation:
- For the company. A competency framework offers a common understanding between management and employees on the job requirements to attain the goals of the organisation.
- For managers. Competency frameworks provide objective performance standards expected from employees and teams.
- For training and recruitment. Establishing competencies helps management to identify and bridge any skill gaps among employees. Applying competency-based learning and development programs will help employees focus more and will begin to perform in increased levels of expectation.
Implementing a competency-based structure for HR and managers demonstrates transparency and consistency to your employees. This is especially true when it comes to recruitment and selection, learning and development, succession planning, and performance appraisals.
Companies following competency-based management benefit from reduced turnover, high level of competence and efficiency, good skill matches, and reduced financial losses.
Further, Society of Human Resource Management have said that competency frameworks serve as career development tools in the organisation – illuminating areas of growth and giving priorities for high-potential programs and talent pipelines.
Competency-based recruitment and artificial intelligence (AI)
In today’s HR tech landscape, artificial intelligence, or AI, has paved the way to ease complex processes involved in HR systems. Incorporating machine-learning tools enables companies to speed up and produce high-quality performance 一 including measuring competencies based on frameworks.
To deliver results within a reasonable timeframe, companies can incorporate AI in their recruitment process through tools such as online application systems. AI can help recruiters to identify job requirements for specific positions and can rank candidates based on selection tools.
Meanwhile, using competency-based AI systems make it easier and more efficient for companies assessing individuals’ soft skills and competencies. The 2018 Global Human Capital Trends Report of Deloitte results showed many organisations now use AI for identifying essential skills among potential candidates during the recruitment process.
Competency frameworks offer a standardised approach the AI needs to effectively measure requirements of any job role. Nevertheless, to fully optimise the use of AI in recruitment, competencies included in the framework must be:
- Clearly defined
- Classified by function, role, and level
- Updated at appropriate intervals
- Used as reference for decision-making in all HR areas
HR practitioners are now leveraging AI to complete tasks, specifically in recruitment processes where they have to process a large volume of applications. Nevertheless, companies have to continuously review and improve their competency framework, as supported by a 2018 IBM study as it may cause poor decision-making in recruiting and selecting potential candidates if it is out of date.
Competency frameworks provide consistent and well-articulated priorities that the workforce needs to achieve to meet the demands of achieving the goals of the organisation. It contributes to better work performance and efficiency to processes across the employee lifecycle.