Managing Competencies and Skills in HR Systems
HR leaders have long struggled to effectively management of competencies and skills. Assigning the right skills and competencies is challenging, and curating long lists and definitions for an entire enterprise has been downright painful, if not impossible. I’ve seen plenty of Fortune 500 companies with hefty HR budgets struggle with this.
The advent of AI and machine learning is changing the game, but HR and talent professionals are still struggling with how to make the best use of new available tools from Workday (Workday Skills Cloud), Oracle (Oracle Dynamic Skills and Grow), SAP, and a myriad of nimble players like Eightfold, Gloat, and Beamery making waves in the market.
Here I’ll present an approach that can simplify deployment and ongoing management of competencies and skills. For starters, let’s differentiate competencies and skills.
Competencies: The Bigger Picture
Competencies are broad capabilities. They are the qualities, abilities, and knowledge and are often aligned with an organization's values, culture, and long-term strategic goals. To make effective use of competencies, I recommend defining competencies only for leadership behaviors, regardless of function. That is, develop a matrix of leadership competencies whereby leaders demonstrate more capabilities and more proficiency as they ascend in the organization.
Key Characteristics of Leadership Competencies:
Behavior-Oriented: Focus on how an employee behaves or approaches tasks, highlighting qualities like leadership, adaptability, and teamwork.
Transferable: Make competencies transferable across roles and departments.
Long-term: Make them central to career growth and advancement.
Strategic Alignment: Tie competencies to your organization's mission, vision, and strategic objectives.
Managing Competencies in Workday, Oracle, and SAP Success Factors
A clean, effective way to manage competencies in Workday, Oracle, and SAP Success Factors is to focus on competencies by management level. In most modern systems, competencies can be assigned to employees based on their management or seniority level. For example all managers may be assigned 'coaching', directors may be assigned ‘strategic planning,’ and all vice-presidents may be assigned ‘financial planning.' This approach helps with job architecture and leadership design because it allows us to develop specific expectations by level. This simplified approach means HR would be no need to assign these competencies by individual job as the level structure would facilitate the assignment. I've seen talent leaders breathe a sigh of relief when they realize they can develop competencies for seven or eight levels in an organization rather than having to design a set for 1,000+ different job titles.
An added benefit is that managers and department leaders do no need to be burdened with defining the leadership competencies required for specific jobs. If one is hiring a director, we would know straight-away that the director requires the director competencies (e.g., strategic planning, project management, team building). Department leads can focus on the specific functional skills needed for a job.
Regarding systems, while Success Factors has historically had more advanced competency capabilities than Workday and Oracle a similar strategy can be applied. (note: SuccessFactors is the only one of the big three to come loaded with a robust competency library). Whatever the system, competencies should be managed centrally in a talent function and be owned by the leadership or organizational development function.
Skills: The Practical or Functional Know-How
More specific to the function, skills represent the practical know-how and abilities required to perform particular functions or duties. Skills are typically developed through experience, education, and training and are directly linked to job roles and responsibilities. For example, cold-calling, tax management, machine operating, Microsoft Excel are best listed as skills.
Key Characteristics of Skills:
Task-Specific: Focused on the tasks required for a particular job, such as coding, data analysis, or Microsoft Excel.
Measurable: Can be observed, assessed, and quantified, making it easier to match them to job requirements.
Short-term: Typically are easier to acquire and may change rapidly in response to technological advancements or industry shifts.
Managing Skills
Although AI has blown the doors off of classic skills management, it is helpful to have a well-designed approach to curating skills in an organization. It is not wise to set up a central committee try to develop a long list of skills to assign to all jobs or employees, but instead to allow the tools to do their magic. While third party tools are becoming very effective at identifying and proposing skills, the big three (Workday, Oracle, and SAP Success Factors) are coming into their own in this capability.
Skills engines today rely on crowd-sourcing from many sites (e.g., published job requisitions, industry sites, or specialist sites for coders like GitHub) and will recommend skills for jobs. The key here for HR teams to make use of these capabilities is that the job must have a meaningful title and is best to have a well-written job profile summary and job description to extract skills from. In addition, there are also tools like Lightcast and Revelio that offer amazing capabilities to understand the skills market and how to use that understanding in your organization’s job design.
So are skills 100% in the hands of AI bots? Not quite. We still need a human touch to maintain a sense of order and especially need a hand in effective job design. But the work of curating skills is much easier today than it ever was. For example, the ability for modern tools to understand synonyms alone (e.g., MS Office = Office 365 = Word, Excel, PPT) is a major advance.
While skills curation models are still evolving, I recommend having a talent partner or HR Business Partner (HRBP) support skills curation for each job family. In other words, having a dedicated talent-focused HRBP who understands the trends and basic skills profile for the Finance or IT department will add meaningful value for Finance or IT leaders, and naturally, the organization. For example, is Natural Language Processing (NLP) an emerging capability in the company? Is it part of the IT strategy? If so, is it listed in job descriptions? Are there employees with this skill? What adjacent skills make one ready to learn NLP? Is there a training program to help employees learn this skills? How are candidates for hire assessed for this skill? A good talent-focused HRBP could help with all of these questions.
Modern HR systems have the capability to assign skills to specific jobs and this is the best approach to managing skills. Then when employees are looking at an internal career move they can compare, or better yet, the system will compare, their current skills with the skills needed for the job. This is the essence of the Talent Marketplace (or Opportunity Marketplace in Oracle’s Grow model).
This is the new paradigm in recruiting. SuccessFactors has this capability as do many niche vendors like Eightfold which is doing particularly well in this area. Instead of just searching for a job, the system takes a look at the candidate’s skills and recommends job matches based on skills. So it's not, search for the job you like in our open listings, it's an AI driven evaluation that says "show me your skills, and I'll tell you which jobs may be a match for your skills." That is where recruiting needs to go.
Competencies and Skills, the Vision Realized?
Competencies and skills have been part of our HR ecosystem for decades, but until now few organizations have had enough resources and capable systems to effectively implement them. New system capabilities in skills and HR process automation are enabling HR and Talent teams to focus more on the talent equation and deliver significant value to the business. And while the benefits may appear to be HR-centric, they are a significant boon to operations and overall organizational health. In fact, this is one key way for HR leaders to move their teams to become trusted talent partners for their organizations. Here are a few ways benefits will be realized.
Workforce Planning: Gathering data on skills and leadership capabilities allows leaders to see and forecast skill gaps and plan appropriately to address them.
Recruitment and Selection: HR teams can facilitate crafting job descriptions that clearly outline required skills and include well defined leadership competencies, leading to more accurate candidate assessments and better hiring.
Training and Development: HR can tune training programs to enhance both behavioral competencies (e.g., leadership) and practical skills (e.g., software proficiency).
Performance Management: Performance evaluations can take into account not only an employee's ability to complete tasks (skills) but also their approach to teamwork, leadership, and problem-solving (competencies)
Conclusion
Understanding and operationalizing competencies and skills in a modern HR system empowers HR professionals to create a more holistic approach to workforce management and the overall talent lifecycle. By spotlighting competencies to support effective leadership and key skills for roles, and perhaps more importantly, understanding how to implement them effectively in your HCM/ERP system, HR can contribute significantly to an organization's long-term success.
