Post-2020 Human Capital: Why Competencies are More Important than Ever

Competency modeling has been a part of effective human capital strategy for decades but defining competencies through competency modeling is more important than ever before. 2020 was a critical point in our history for a myriad of reasons, but its impact on work is undeniable. COVID-19 has shifted the world’s approach to how and where we do our work. Conversations about diversity, equity, and inclusion have pushed organizations to reflect on and assess their own systems and processes to ensure these elements are baked into their culture and workforce. Lastly, as the economy begins to recover, the battle over attracting and retaining talent starts again.

This blog is the start of an ongoing conversation about one of my favorite topics—competency modeling. As an opening, we’ll begin with describing what competency modeling is and why competencies are more important than ever.

First, we’ll review the basics. You can think of competencies as the DNA of job performance. They are foundational building blocks that employees need to successfully do their jobs. Competency modeling is the process of determining the unique combination of building blocks that an organization needs for its workforce to achieve its highest level of performance. With the proper design, organizations can use competency models to recruit and hire qualified talent, identify and resolve skill gaps, inform employee learning efforts, plan future workforce needs, manage performance, and more. Formally, competency models refer to collections of knowledge, skills, abilities, and other characteristics (KSAOs) that are needed for effective performance in the jobs in question.¹ They represent the underlying framework woven together to support all the work tasks employees encounter in their everyday work—from informal email correspondence to navigating complex, ambiguous, and politically charged meetings.

So, why do we care so much about competencies? Competencies play a critical role in talent management at every level of the organization—employees, supervisors, leadership, and the organizational-level.

Here are a few ways that competency development can support organizations as they navigate the ever-changing world of work:

• Realigning Expectations in a Post-COVID World. COVID has drastically changed the way we think about work. How and where we do our work is all on the table. And thus, it’s more important than ever for employers to document and/or update and clarify expectations to support a hybrid workforce. Competencies document job expectations and provide a clear, shared understanding of work responsibilities between employees, supervisors, and the organization. Documented job expectations can also support the organization in determining where they can be flexible, and where they cannot. Which roles and responsibilities can continue to be performed remotely and which require an in-person presence? Updating competencies can also help to identify new roles and responsibilities that have emerged in a post-COVID world. Take, for example, office managers who are now responsible for COVID-related office logistics (e.g., office layouts, employee safety protocols and policies), HR specialists who now must manage COVID-related leave and other new and unique FMLA situations, or even just a greater reliance on proficiency in emerging technology and systems to support remote work.
• Promoting an Equitable and Inclusive Work Environment. Now more than ever, organizations are taking a step back to examine internal culture, processes, and systems to ensure greater diversity in their workforce, inclusivity and psychological safety of their culture, and systemic equity in their work processes. This is further emphasized by President Biden’s recent Executive Order on Diversity, Equity, Inclusion, and Accessibility, directing federal agencies to examine current systems to promote inclusivity and prioritize fair and equitable human capital practices. Competency-based human capital practices are a foundational component of ensuring equity in talent management. Competencies provide a data-driven, consistent approach to human capital removing the likelihood of unconscious bias, and discriminatory practices. Additionally, clarity about expectations increases perceptions of procedural fairness and equity.²
• The New War for Talent. As the economy recovers (and projections show it will continue to recover)³, the war for talent starts again. In fact, 25% of employees have plans to leave their jobs post-pandemic.⁴ And while traditionally, competencies have served as a dependable talent acquisition tool for designing fair and legally defensible recruitment, selection, and assessment processes, they are also a critical talent retention tool—which is arguably more important in this current environment. Competencies support a variety of key employee retention strategies to include employee potential assessments, career path management, feedback mechanisms, learning initiatives, coaching and mentoring, and competency mapping.⁵ Fostering a culture of employee development and career growth is a powerful way for an organization to demonstrate  investment in its employees, supporting employee engagement and subsequently, impact retention.

In a post-COVID world, renewed focus on equity and tight talent markets all indicate that competencies are needed now more than ever as the common thread for ensuring comprehensive, equitable, and successful human capital processes. We’ll continue the conversation in my next blog about best practices for competency development.

Marni Falcone is a Managing Consultant and an Industrial/Organizational Psychologist. Marni leads many of FMP’s competency development, assessment and implementation projects. She is a Project Management Professional (PMP), a member of the Society for Industrial and Organizational Psychology (SIOP), and the President-Elect of the Personnel Testing Council of Metropolitan Washington (PTCMW). Outside of work, she loves spending time her family, taking a Barre3 class, or rooting for her favorite sports teams.

References

1. Campion, M. A., Fink, A. A., Ruggeberg, B. J., Carr, L., Phillips, G. M., & Odman, R. B. 2011. Doing competencies well: Best practices in competency modeling. Personnel Psychology, 64: 225-262.
2. https://www.mckinsey.com/business-functions/organization/our-insights/the-fairness-factor-in-performance-management
3. https://hrexecutive.com/brooks-is-your-organization-prepared-for-the-second-war-for-talent/
4. https://hrexecutive.com/one-in-4-workers-plans-to-quit-post-pandemic/
5. Collings, D.G. and Mellahi, K. (2009), “Strategic talent management: a review and research agenda”, Human Resource Management Review, Vol. 19 No. 4, pp. 304-13.