It can be a challenge determining what skills a person needs to be able to fulfill the requirements of an open position. 

And with the way technology is seemingly changing day by day, it can even be difficult to understand if your current team has the ability to keep up with these changes. 

When you need to figure out what skills someone needs to perform the necessary tasks to meet company goals, you will likely need to develop a competency model. But what is it and how does it work? 

In this article, we’ll explore what a competency model is and how you can make one to figure out how to hire the best people for the job or find capability gaps within your current team. 

What Is a Competency Model?

A competency model is a framework that People Teams use to outline what a candidate needs to successfully perform a role (be that a specialist role or a position responsible for a larger part of the organization). 

This model will analyze a candidate's suitability based on: 

• Knowledge 
• Skills 
• Behaviors 

When designing your competency model, you will want to focus less on what tasks they perform, and more on how they perform those tasks. You will want an employee competency model for hiring, but it also helps your HR team in creating learning and development plans, making performance evaluations, and helps with broader talent management practices. 

The Main 4 Types of Competency Models

As explained, the competency model can be used in several different categories, each helping to either find the best person for a position or better understand what needs to be done to improve your current team's performance. 

These are the four types of models you can follow. 

1. Organizational Core Competency Model

You may recognize this model as something that directly influences your company values — as it’s essentially a broad analysis of what each and every employee needs to do to meet the organization's objectives and goals. 

The organizational core competency model looks into universal behaviors such as: 

• Adaptability
• Customer focus
• Ethical practice 

2. Functional Competency Model

The functional competency model is pretty straightforward, as you’ll be looking at the skills needed by an employee to perform a certain task within a certain team or department, such as financial analysis for a finance team or talent acquisition for an HR function. 

3. Job Competency Model

A job competency model is something you would perhaps use when writing required skills for a job description. 

This model helps you with defining what is needed for a single position, including:  

• Exact knowledge
• Skills
• Behavioral traits 

This level of specificity makes it particularly useful for structuring interviews and conducting performance reviews.

4. Leadership Competency Model

The leadership competency model identifies the capabilities expected of managers and executives, typically covering areas like strategic thinking, change management, and team navigation. 

Organizations most commonly apply this model to succession planning and leadership development programs.

Pro tip: It is likely that not one solution will solve all your problems, and a hybrid approach or even creating a customized model could be best for your organization. If that is something that you think is better suited for your use case, keep reading. 

Building a Competency Model in 8 Steps

Regardless of whichever model you decide to use, the process for creating each will be largely the same — requiring you to gather input from the entire organization. 

That’s why we decided to add the following steps to help you design and deploy your competency model. Starting with: 

Step 1: Define Your Purpose and Scope

First things first: figuring out what is the business need for the model and how widely it will be used in the organization. 

Outlining the scope of the competency model is going to help you determine the resources you will need to create the model, as a company-wide model will be more demanding than a model clarifying a single function. With this information to hand, you will be able to: 

• Determine timeframes 
• Create a budget 
• Set aside resources for the project 

Step 2: Assemble an Interdisciplinary Team

Once you know what type of model you’re looking to create, next is to create an interdisciplinary team, and figure out who needs to be on this team. 

Depending on what the model is being created for and how company-wide it will be applied, you'll likely need to bring in representatives from:

• HR 
• Operational roles 
• Subject matter experts 

Having a collection of different perspectives on your team will make sure that the model you create is both technically accurate and grounded in day-to-day reality.

Step 3: Gather Data and Identify Behaviors

Now it’s time to understand where your current teams and employees are and where they need to be in the future — and you can start by reviewing existing: 

• Job descriptions
• Workflows
• Organizational goals

Once you know where your organization currently stands, you’ll want to observe your high-performing employees and gather input through:

• Interviews
• Focus groups
• Surveys with managers

The purpose of this is to identify the knowledge requirements, skills, and behaviors that drive success in a specific or multiple roles. Then you’ll want to map out any potential future-relevant competencies. For example, AI is increasingly being adopted by businesses across all organizational functions, so perhaps a competency you expect your team to have is the understanding of how to use AI to automate their day-to-day tasks. 

Step 4: Cluster and Define Competencies

Once you have the behaviors and skills identified, you’ll want to group everything into categories and outline with a clear definition what each means. 

Don’t go overboard at this stage, as a rule of thumb is to limit the model to 8 to 12 competencies per role to keep the model practical and usable. 

Step 5: Define Proficiency Levels

With your competencies clearly defined, it’s time to establish what mastery of these competencies will look like. How you determine your rating level is up to you, but a nice competency model example is the four-level scale: 

• Level 1 — Beginner: Someone who understands the skill in basic terms 
• Level 2 — Independent: Someone who can operate at the expected level 
• Level 3 — Advanced: A practitioner who operates comfortably in complex situations 
• Level 4 — Expert: An individual who is capable of embedding and transferring the skill across the organization 

These distinctions make it easier to assess individuals, set development goals, and calibrate hiring criteria.

Step 6: Validate With Stakeholders

Once you understand what is the current level of employees, what is expected of them, and what makes someone proficient at a function or in a role, the next step is to get approval from: 

• Senior leaders
• Department heads
• Subject matter experts 

As these individuals will be the best equipped for giving you feedback and helping you make revisions before finalizing. 

If you create a competency model without buy-in from other stakeholders, then there’s a risk that the model will be seen as an HR document rather than a business tool for improving the way employees work. Having this stakeholder involvement will help give the model its credibility and practical relevance.

Step 7: Document and Communicate

With the feedback implemented and the competency model finalized, it is time to find a place for it to live. 

This should be somewhere that is easy to find and accessible to all the employees that will be affected by the model. How you save and distribute this model is up to you, and can be done via: 

• A structured document
• A competency map
• Integrated directly into an HR platform

Wherever you decide to keep the model, you should make sure that it is easy for anyone across the organization to read and understand what the model is and how it applies to them. 

Step 8: Review and Update Regularly

Remember how we touched on AI becoming more of a norm in every business function? Well, what will be the new norm tomorrow? 

Industries undergo transformation, technology evolves, businesses pivot — all of which will affect your competency model. So, it is necessary to perform regular reviews of your model to ensure that it reflects the current business priorities. If you end up waiting until your model becomes obsolete, it means heading back to step one and starting all over again. 

But otherwise, if you follow these 8 steps, you will have a competency model framework that you can use to assess gaps in terms of performance and even utilize it for hiring new candidates. 

How to Use a Competency Model in Hiring

Once you have the competency model ready, you can repurpose it for evaluating candidates more rigorously, rather than relying on resumes and gut instinct — meaning you’ll have a standardized and repeatable process that helps you predict job performance and culture fit. 

Build a Competency Matrix for the Role

Take your competency framework model and create a matrix for the role. 

Then, with your skills mapped out you can make expectations more concrete. So, instead of telling a candidate that you expect them to be good with time management, you can develop it to become something more like the ability to prioritize urgent tasks without guidance or meet deadlines despite shifting priorities. Defining these competencies will help you determine which skills are needed from day one and which ones can be developed on the job. 

Having this matrix will help you with your candidate screening process and building onboarding plans. 

Design Competency-Based Interview Questions

When you’re developing the questions you will ask a candidate, make sure to ask for specific experience or past examples that demonstrate that they have the required competencies. 

Doing this will help you and your interviewers gather more comparable assessments of candidates. 

Use Structured Assessments

Interviews can only tell you so much about a candidate — but introducing role-specific simulations, scenario-based tasks, or gamified assessments help you understand how a potential hire might perform in action. 

Engaging assessment formats also improve candidate experience, which directly affects:

• Completion rates 
• Offer acceptance 
• Employer brand perception 

When to Outsource Competency-Based Hiring 

Between running your business, coming up with competency models, and trying to fill open roles, your team's resources can quickly be stretched by how much needs to be done. 

If you’re a business that is scaling quickly or operating in specialized markets, where employees may be required to wear many different hats, it’s not always realistic to have time available to focus on hiring. Here are just some of the examples in which recruiters or people teams can quickly become overwhelmed: 

• Rapid growth and volume spikes
• HR bandwidth constraints 
• Rising cost-per-hire and stalling time-to-fill 

If this sounds like something that has been affecting your ability to hire new talent, then it could be time to find a recruitment partner who can relieve you of the workload, like TalentHub. 

TalentHub is a recruitment partner that embeds themselves into your hiring process. 

Before sourcing a single candidate, our recruiters integrate directly into your team, taking the time to understand your:

• Values
• Culture 
• Mission 

With your competency model to hand, TalentHub can use this information to help with advertising and sourcing through to: 

• Screening
• Interviewing
• Offer negotiation
• Onboarding support  

If you need support with getting the best talent to fill any of your open positions, book a call with TalentHub and let’s see how we can help you with your hiring needs.