Many organizations have relied on competency models for measuring performance since they entered the business world in 1973. A competency model is a framework unique to an organization that lists expectations required to perform a particular role or function.

Now, some organizations are looking at an alternative: skill-based talent strategies. Of respondents in a McKinsey survey, 58 percent stated that closing the skills gaps at their company has become a priority.

Competency model or skill model? Learning and talent leaders have strong opinions about which is best. Here’s a key point: they both address the same thing—how we work.

To understand how they’re different, let’s look at the definitions of competency and skill:

• Competency: Knowledge, behaviors, attitudes, and skills that lead to the ability to do something successfully or efficiently.

• Skill: Learned and applied abilities that use one’s knowledge effectively in execution or performance.

Whether your organization is using skills or competencies to measure development, the goals are the same: assessing your people, identifying areas for growth, and offering the right opportunities to learn and stay engaged.

Competencies: Powerful With Limits

A competency involves more than just knowledge and ability. It’s a mix of behaviors and attitudes and can even include skills. But managing such a large and complex model can be challenging.

Competencies are value-based. They’re specific to an organization or project. They aren’t easily measured or standardized. For example, expectations for competency in analytical ability can differ heavily depending on context.

Competencies are rigid. They aren’t agile in practice. It can take months or even years for someone to reach a specific competency. You could become skilled in data analytics software in a few hours, but you can’t be fully competent in data analytics in that time.

Competencies are nontransferrable. They’re mostly mapped to individual functions or behaviors, making it hard to transfer them across an organization. Because of this, it’s difficult to imagine how one competency applies to another role.

Creating a competency model takes time and effort, and the model can become outdated before it’s even put into action. Many learning teams create competency models for their organizations, despite their limitations.

Skills: Agile and Efficient

When we talk about skills, we’re using the language that people use to describe their own development. Skills are smaller and more manageable than competencies, making them easier to track.

Skills can be developed. Think of skills such as computer programming or project management. These can be learned in a matter of days, weeks, or months and improved through practice over time.

Skills are applicable. Work can be deconstructed into three components: tasks, projects, and roles. Skills are used to perform tasks. Tasks are the things required to complete projects. And projects are how roles are organized. This means skills are how work gets done. You can’t complete the task of making a sale solely by being skilled in customer service, but you can when you also apply your skills in communication, active listening, project management, and negotiation.

Skills are transferable. Skills such as programming or project management are transferable between companies, roles, projects, and tasks.

Competencies or Skills?

If you’re not ready to scrap the competency system your company has used for years, you’re not alone. You can still increase standardization, organizational agility, and experiential learning based on skills. You can keep your current model in place and simultaneously map skills to job roles to gain many of the same benefits achieved through a skill model.

In the end, whichever method you choose should be the right fit for your organization and people. Make sure that your model can successfully and efficiently assess your people, identify areas for growth, and offer the right opportunities to learn.