Skills & Competencies 101: Upskilling Is a Must in 2023

Written by Dave Pierce

October 21, 2022

Skills & Competencies 101: Upskilling Is a Must in 2023

The war for talent is the new Gold Rush, but you may already be sitting on a gold mine.

You have great employees. They’re smart. They’re skilled. They’re dedicated. They have valuable institutional knowledge and have personal, cross-functional relationships. More importantly, they have your trust. But now their job requirements are changing, and the skills and competencies you need are in flux.


Becoming a skills-based organization has never been more important. The same is true for employee retention, especially given that 4.2 million Americans quit their jobs in June 2022.

But do you even know what skills your employees have? Which skills and competencies they need? And if their job descriptions still make sense?

Maybe. Maybe not.

Consider the following from Gartner:

  • 58% of the workforce will need new skill sets to do their jobs successfully.
  • Nearly 60% of HR leaders reported that building critical skills and competencies was their No. 1 priority in 2022.
  • The total number of skills required for a single job has been increasing by 10% every year since 2017.
  • 47% of HR leaders do not know what skill gaps their current employees have.

Turnover costs more than employee retention. Internal recruiting, promotions, development and education, career pathing, and workforce planning all turn the focus away from taking a chance on an external hire to making the most of the human resources and talent you already have.

No matter what, you need talent intelligence, foundational data, a skills inventory, newer and better job descriptions and responsibilities, and a way to map it all to each job, each business objective, and each disruption you see coming.

So, where do you start?

Build a skills inventory for every employee

What are your employees’ talents? What are their personal aspirations? Are you having meaningful career conversations at regular intervals? Are your employees regularly inquiring about job openings or upskilling opportunities? Are you underestimating the capabilities your people have?

But also, are you making greater efforts to hire a diverse workforce, and underperforming in how you develop it?

Answer those questions, and conduct an internal skills and competencies audit.

Then organize that data and make your findings part of your business plan so you can scale and operationalize your vision.

Create a common skills and competencies language and taxonomy

The next step is creating a common language specific to your industry and your needs based on your market and what’s going on in the world around you. This isn’t a one-time deal though. It’s essential to go through this exercise on a regular basis. It also requires up-to-date and trusted data.

Base job taxonomies and ideal skills and competencies profiles on the structure necessary for growing your company. That will help you understand what your jobs should be and determine the skills and competencies required in each job family.

The difference between skills and competencies

Job skills and job competencies are often confused or conflated. The nuances are important when it comes to structuring your needs for each job.

Here’s how to look at it:

  • Skills are specific abilities you need to perform a job well.
  • Competencies are the level of a person’s knowledge and behaviors for each skill that is required to be successful in that position.

Competencies are measurable and observable behavior.

There are three types of competencies: core competencies, industry competencies and job family competencies.

Match skills and competencies to the job

The proficiency level of a competency lets you know the level of expertise a candidate or employee must possess in that skill to perform a job to the highest degree of excellence.

Now take your new job taxonomies, your skills inventory, what you know about your future goals, and what you know about the growth opportunities your employees are looking for. And sort the data.

The tricky part is doing the initial talent intelligence legwork, and we don’t recommend doing it alone.

But now that you have uniform, taxonomized job classifications and descriptions, and you’ve prioritized your needs, AI can do a big chunk of the rest, including helping you identify the right employees for the right jobs.

Think of it as computer matchmaking … but for jobs.

Instead of “loves long walks on the beach and reading poetry,” it can be “proficient in coding in JavaScript, HTML, python, CSS,” etc.

Or “has a mixed background in engineering, technical writing, and sales, and excellent written and verbal communications soft skills.” It might be time for a blind date with a sales engineering job or customer success role.

Personalized learning is the key to developing specific skills and competencies

The next step is how you “coach them up,” as they say in sports. How do you upskill, train, and develop employees and apply their talents in a different capacity?

That largely depends on the person’s complete skills and competencies profile, their personality, their personal goals, and all the unique things about that person’s makeup.

HR business partners and team managers can survey employees and follow up one on one to understand how to tailor personalized plans to each employee, or possibly to each group of similar employees.

Map out their employee journeys, find the necessary classes or trainings they need, continuously engage that employee, and keep them on the path that works for both of you.

It’s not a good journey unless it’s one you can take together.

Again, remember that the cost of a class or the time and effort it takes to actively develop an employee is nothing compared to the cost of hiring a new one.

Conclusion: Upskilling and reskilling are the best ways to close capability gaps

When asked to prioritize reskilling existing employees, shifting current employees to new roles, recruiting, and hiring new talent from other firms, or contracting out jobs, executives overwhelmingly said building skills with their current teams was the best way to close their organizations’ skills gaps.

Whether you’re in banking and financial services, construction, education, energy, software, manufacturing, healthcare, hospitality, retail, pharmaceutical, or media and publishing, it’s clear that focusing on skills and competencies is essential.

There’s a solution for companies that have poor internal mobility, high voluntary turnover, and who struggle to find top talent with the right skills.

The answer is moving to personalized, skills-based learning and a skill-centric approach to talent management. This change requires HR shifting its role to a data-driven strategic adviser and partner across your organization.

Organizations can start by structuring talent management around talent intelligence and building a skills and competencies framework to create a blueprint for growth through hiring, recruiting, retention, talent assessment and learning and development.

Here’s what you’ll need:

  • Talent intelligence:A skills and competency data framework and cloud management tool for HR, compensation, organizational development, talent management, and recruiting.
  • Enterprise HR systems:System-agnostic HR software that can seamlessly connect with ERPs such as Workday, Oracle, SAP, etc. and help you craft the precise job descriptions and determine the exact skill sets you need at every level, offer competitive salaries and benefits, achieve pay equity, and have specifically tailored compensation analysis and market data at the click of a button.
  • Scalable and future-proof processes:Not only to you need buy-in from executives at the highest levels to transition into a skills-based organization, you need seasoned professionals with compensation, HR, and data science expertise to help you continuously update and manage your skills-based HR practices.

Feeding talent intelligence into your performance management and foundational tools will get you pretty far, but you need a way to take all of the outside data possible, every piece of internal information from your own skills inventory, and plot your path forward.

But fear not, it’s not impossible to take everything you know subjectively about your team – its collective skills and skill needs that lie on the surface – and apply a tactical, objective filter and framework to mine all the gems that lie beneath.

By empowering employees to pursue their own advancement with the same company, having pay transparency, better communication, and being open and honest about the path forward – upskilling becomes the ultimate win-win.

With the wild job market of 2022 and what’s shaping up to be a challenging 2023, job loyalty and professional development has to be a two-way street.

The alternative is a bunch of costly dead ends.

To learn more about how to approach skills and competencies for your organization, schedule a free consult with our Consulting Team.

Download Our Resource
Embracing Fair Pay in the War for Talent

Download our white paper to further understand how organizations across the country are using market data, internal analytics, and strategic communication to establish an equitable pay structure.

about the author
Dave Pierce has more than 25 years of writing, editing, and content management experience as an award-winning journalist and manager. He has a passion for diversity, equity and inclusion, pay equity and transparency, and employee engagement. He strives to tell stories about how people and technology are changing how we work, live, and thrive together. He is a proud Northeastern University graduate and New Hampshire native.

Insights You Need to Get It Right

The latest research, expert advice, and compensation best practices all in one place.
Ask This Question Before Transitioning Your Team to Long-Term Remote Work
Ask This Question Before Transitioning Your Team to Long-Term Remote Work Blog
As companies plan their return, some find there may be benefits to maintaining WFH.

Read More

2021 Trends: Compensation & Workforce Transformation
2021 Trends: Compensation & Workforce Transformation Guide
We're seeing a renewed sense of optimism and workforce innovation in 2021.

Read More

DE&I Panel Discussion: Moving the Conversation Forward
DE&I Panel Discussion: Moving the Conversation Forward Webinar
In this panel discussion we will cover what the issue is when improving DE&I.

Read More

Differences Between HR-Reported and Crowd-Sourced Compensation Data
Differences Between HR-Reported and Crowd-Sourced Compensation Data White paper
To make decisions about the value of a job, you need data from a range of sources.

Read More

CompAnalyst Market Data: Smart Matches, Fast Prices, and New Insights
CompAnalyst Market Data: Smart Matches, Fast Prices, and New Insights Product Sheet
The CompAnalyst Market Data platform is easier to use than ever before.

Read More

It's Easy to Get Started

Transform compensation at your organization and get pay right — see how with a personalized demo.