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What’s the difference between skills and competencies?

15 Jan 2020

Director of Hays Australia, Jane McNeill, explores the fine but distinct line separating skills from competencies on your CV.

‘Skills’ and ‘competencies’ are two terms you’ll come across regularly when searching for your next job. It might seem as if these two words are interchangeable – but it’s actually not quite right to describe ‘competency’ as a mere synonym of ‘skill’.

There is, in fact, a very real difference between these two terms. If you’re looking for a new job or are keen to understand how you can advance in your career, it’s important that you recognise the differences between the two.

How do skills and competencies differ?

Skills are the specific learned abilities that you need to perform a given job well. Examples, depending on the specific role, range from handling accounts and coding to welding or writing tenders. There is a distinction, however, to be made between hard skills and soft skills.

Whereas a hard skill is a technical and quantifiable skill that a professional may demonstrate through their specific qualifications and professional experiences, a soft skill is a non-technical skill that is less rooted in specific vocations. An example of a hard skill, then, may be computer programming or proficiency in a foreign language, whereas a soft skill may be time management or verbal communication.

Competencies, on the other hand, are the person’s knowledge and behaviours that lead them to be successful in a job. Examples of competencies, then, include the improvement of business processes, strategic planning and data-based decisions. Competencies effectively explain how an individual’s behaviours bring about the desired results in their role.

As with skills, there are various types of competencies – including core competencies, which are those that any successful employee requires to rise through an organisation. In the words of marketer Aja Davis Isble: “A core competency is something that is core to you and how you work – so it is something that could potentially set you apart from every other candidate.”

The following breakdown further summarises the differences between skills and competencies.

Job descriptions

Most job descriptions can be broadly considered to be either skills-based or competency-based. They differ in that skills-based job descriptions typically consist of the job title, responsibilities and skills required, whereas competency-based job descriptions tend to take a more holistic approach by also considering the behaviours that will lead to success in the job.

To go into more detail, a skills-based job description is the more ‘traditional’ approach and therefore the one you may be most familiar with. It’s the kind of job description that outlines the responsibilities of a position by listing the tasks to be completed and the skills required to do so. It specifically focuses on the candidate’s qualifications and experience, without considering their merits as a whole person.

A skills-based job description, then, might state a preference for you to have a BA in accounting or finance, at least three years of accounting experience and strong proficiency in Xero or Excel.

As for competency-based job descriptions, their aforementioned ‘holistic’ approach is based on the premise that past behaviour predicts future performance. Such job descriptions make a connection between the skills, knowledge and behaviour of the candidate – in other words, how they apply their skills and knowledge, instead of merely what skills and knowledge they possess.

This type of job description therefore provides more context than a skills-based one, which helps to explain why it is more common in today’s world of work. It is a more inclusive way of communicating what the candidate requires to do the job well.

So, a competency-based job description might also include the need for analytical thinking, teamwork and a client focus. Such job descriptions emphasise the qualities of the worker as well as the skills they require and tasks they’ll take on.

Your CV

Next, you’ll need to update your CV in a way that lets both your skills and competencies shine through.

Bear in mind, though, that when you’re applying for any role, you must first carefully review the job description. This will enable you to pick out the relevant opportunities to truthfully mirror the skills and competencies in the job description with those on your CV. So, first of all, determine whether the job description is skills or competency-based, or a mixture of the two, so that you can tailor your CV to what the reader is looking for.

Identify the skills and competencies you possess that are required to perform the specific job you are applying for. One idea is to list these skills at the side of your CV, as explained in our interactive CV guide.

You should also incorporate your relevant skills and competencies throughout the work experience section of your CV – for example, in the case of a previous finance role, competencies such as conflict management, change management and strategic agility may be relevant in addition to your technical and soft skills. Crucially, remember to also communicate the quantifiable results you were able to deliver because of your competencies and skills.

The job interview

When it comes time for a job interview, you need to reiterate both your relevant skills and competencies to the interviewer.

Along with asking specific questions to determine your technical and soft skills, expect to be asked competency-based interview questions. We’ve previously provided an abundance of advice on how to articulate and answer these types of interview questions.

Remember, competency-based questions aim to test for specific attributes. You may therefore be asked to explain how you resolved a tricky work situation in the past or how you previously worked alongside other team members to achieve a good result.

You also shouldn’t forget in your interview to mention your constant learning mindset – something that is increasingly vital in today’s era of digital change. How willing are you to learn, for example, those skills and competencies that you don’t already possess? Again, we have previously written about the importance of upskilling in the 21st century workplace.

How to develop your skills and competencies

As I alluded to earlier, understanding the difference between skills and competencies isn’t just important during the job search process. This understanding can also help you to better understand which areas you need to build on and develop to further your career. One way you can do this is by regularly conducting a personal skills and competency gap analysis.

Whether you conduct this analysis on your own or with the support of your manager, it will involve looking at the jobs that you aspire to – both right now and in five to 10 years’ time – and consider what skills and competencies you need to learn in order to become a suitable candidate and reach these goals. The key is to be honest with yourself – after all, you can’t hope to succeed in the future of work without self-awareness and constant self-reflection.

Various online tools exist that may greatly help you to assess your current skills and competencies, including the Myers-Briggs Type Indicator and MAPP.

Understanding what your skill and competency gaps are will enable you to go about proactively upskilling in your own time. You can also ask for relevant stretch opportunities at work. Crucially, you could make this the start of a habitual cycle of reflection, adopting a mindset of lifelong learning.

And, if you are seeking a new job, remember that the job interview is a great place, via smart questioning, to find out if your potential employer will be able to support you in your personal development and upskilling in a truly meaningful way for you.

Always remember that ‘skills’ and ‘competencies’ are not mere buzzwords littered throughout job descriptions. They give us the tools to be successful. So, if we don’t understand the difference between them, how can we advance our career, both now and in the future?


By Jane McNeill

Jane McNeill is director of Hays Australia. A version of this article originally appeared on Hays’ Viewpoint blog.

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