What is a competency model? Build yours in 7 steps

How are competency models used?

Competency models are used for a variety of HR practices, including:

Recruitment – Fully developed competency models are often used for the development of job postings. When they are well-defined and clear, organizations have a better chance of finding more closely matched candidates.

Talent/Performance management – Defining what success should look like within the organization boils down to the performance of the workforce; a competency model can define what performance success should look like for each role within an organization. This benchmark helps HR to connect the function of each job with organizational goals and also ensure that the talent of employees is developed.

Performance appraisal – Competency models provide the framework needed to properly assess employees during a performance review; both the employee and employer have a clearly defined list of behaviors and skills to work from.

Maintaining a competency model by hand is slow, which is why more organizations are building skills profiles from workforce data instead. Our guide to AI in talent management covers how that works across recruitment, performance, and development.

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What is an example of a competency?

The format of a competency model for any given job will be different depending on the specific organization and profession. There is no standardization or required structure. Often, organizations will have their own unique templated format for competency models.

The Society for Human Resource Management (SHRM) offers a best practice in the formulation of competencies by breaking down what information should ideally be included in a specific competency:

Best Practice:

• Title – Name of the competency
• Definition – Overall definition of the competency
• Sub-competencies – General baseline skills and behaviors required
• Behaviors – Behaviours that reflect the highest level of proficiency
• Proficiency Standards – Skill standards that reflect job-specific requirements and reflect four stages of career development (early, mid-level, senior, executive)

Competency example:

• Title: Develop customer relationships
• Definition: As part of the Sales process, the ability to create a lasting relationship with customers via interactions is integral to the role.
• Sub-competencies: Ability to communicate effectively with customers
• Behaviors: Emotional intelligence
• Proficiency Standards: Identify customer concerns and present methods for addressing concerns.

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How to develop effective competency models

1. Determine what kind of process works for your organization

The research and development involved in creating well-defined competencies for a position can be lengthy; it takes time to understand what is needed for each position. Because business needs change quickly, it can help some organizations to have a shorter and more intensive method of development. Competency models that are also designed as flexible can likewise accommodate future changes.

2. Research available competency information

Developing competencies requires more than vague statements about what the job position will entail. As well, the functional competencies need to reflect what “great” performance should be, not just the baseline skills for “acceptable” performance.

Previously developed competencies for similar roles should be identified and used as a guideline, as well as related role documentation, background information and organizational core competencies.

3. Interview relevant business units and executives

Interviews with relevant stakeholders provide the insight needed for the role’s required competencies. Executives can provide the key organizational core competencies needed for the role that reflect both the values, philosophy and goals of the organization. Managers and high-performers from relevant business departments can be interviewed to find out the key skills and behaviors that are necessary and successful for those roles. When interviewing, the focus should be on what skills and behaviors make for a top-performing employee in that role.

4. Establish the core competencies

The core competencies should reflect the baseline behaviors and skills required by the organization. How should employees act and contribute as part of the organization so that they can integrate into the company’s work culture and philosophy? Use the research and interview content from executives and relevant organizational stakeholders.

5. Establish job-specific competencies

Job-specific competencies should reflect the unique role skills and behaviors as outlined by departmental managers and top-performers at the research stage. What did these individuals need to know and do to perform well in their role?

6. Establish leadership competencies, where needed

When management-related competencies need to be drafted, it should be assumed that the individuals are already familiar with the core competencies set out by the organization. The focus should be on unique leadership attributes and skills. These can be determined by the executive and senior management level at the research stage.

7. Finalize the competency list

Organize the findings, but avoid being unrealistic with narrowing down competencies. If the list is unrealistic, it could hinder recruitment and scare away potential applicants. If the list is too vague or not specific-enough, it could result in an influx of candidates that are not perfectly suited to the position; it will also not help employees to achieve organizational goals.

Validate the competency list with all stakeholders involved in the process, including executives and management. Signing off on competencies is important to ensure that all levels of the organization’s needs are being met.

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Competency models and skills-based approaches

Many organizations have moved toward skills-based approaches in recent years, and plenty now run both. The shift is measurable: Michael Page’s 2026 Talent Trends research, based on close to 60,000 responses, found that 66% of UK organisations have adopted skills-based hiring, with another 24% yet to follow. The benefits employers name most often are identifying people with the right capabilities (48%) and matching them to current and future skill needs (42%). The two are related but they are not the same thing, and the difference matters when you are deciding what to track.

A competency model describes what good performance looks like in a role. It is written around jobs. A skills framework describes the capabilities a person holds, whatever job they happen to be in. It is written around people.

In practice most organizations want both. A competency model gives you a standard to hire and review against. A skills framework tells you who can do what today, which is what you need when a role opens up or a project needs staffing. The problem is rarely choosing between them. It is that they usually live in different systems, so the competency model sits in a document and the skills data sits somewhere else, and neither connects to the learning that would close the gap.

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Where this sits in Valamis

Skills profiles, levels and goals are built into the core of the Valamis platform rather than bolted on beside it. That means the competencies you define, the skill levels you expect, and the learning people complete all sit in the same system of record.

A competency model is only useful if it changes something. Kept in a spreadsheet, it describes an ideal. Connected to learning and to a record of what people have actually done, it becomes a working picture of where your workforce is and what it needs next.

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Frequently asked questions about competency models

What is a competency model?

A competency model sets out the specific skills, knowledge and behaviors an employee needs to perform a job successfully. It defines what good performance looks like for each role, and it is used in recruitment, talent management, training and performance assessment.

What is the difference between a competency model and a job description?

A job description is a general summary of the skills a job requires. A competency model goes further and sets out the specific behaviors an employee has to demonstrate in order to succeed in the role.

What are the three types of competencies?

Core competencies are the baseline skills every employee needs. Functional competencies are job-specific and unique to each role. Leadership competencies apply to anyone who leads others, not only to managers.

What is the difference between a competency model and a skills framework?

A competency model is organized around roles and describes what success looks like in a position. A skills framework is organized around people and describes the capabilities an individual holds, whatever job they are in. Most organizations end up needing both.

How do you build a competency model?

Decide what kind of process fits your organization, research existing competency information, interview the business units and executives who know the roles, then establish core, job-specific and where needed leadership competencies before finalizing the list.