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Competency vs. Skill: Why You Need to Know the Difference

  • 5 Min Read

Aligning skills with competencies can help your organisation round out its training strategies and drive business outcomes.


Although many people use the terms competency and skill interchangeably, these two words mean very different things, especially in the corporate learning space. When you’re training, evaluating or hiring an employee, you shouldn’t look only at their skills. They also need the right knowledge, attitudes and behaviours—the required competencies—to be successful in their job.

At the end of the day, you can’t have one without the other. Skills are about equipping people with tools. Competencies are about making sure they know when, where and how to use them. Together, they help people, departments and organisations achieve business goals.

Let’s dive deeper into the differences between competencies and skills and why they matter.

What Is a Competency?

A competency is the set of skills, knowledge, behaviours and attitudes required to do work well, which include the following:

  • Skills: Knowing how to do a given task
  • Knowledge: Understanding when to act and which skill to use
  • Attitude: Having the willingness to act
  • Behaviours: Adopting or defaulting to a manner of acting

Competencies can be divided into three broad categories:

  • Functional or technical competencies are specific to a given role. In essence, it’s about figuring out which set of outcome-oriented proficiencies your employees must have to be successful in their jobs.
  • Organisational competencies are unique to the organisation and are often tied to business needs. For this reason, they can play important roles in helping leaders understand and articulate how the work that employees are doing contributes to larger strategic goals.
  • General competencies, which may also be called professional or cross-functional competencies, go beyond a single role or organisation. They’re more universally applicable within industries and can be transferrable throughout someone’s career.

Ultimately, having the right competencies in place helps people do their jobs, complete projects and achieve goals.

What Is a Skill?

A skill is a learned ability to complete a task according to a set of standards that are often tied to quality, outcomes and time. In essence, it describes what someone can do proficiently.

Skills typically fall into one of two buckets:

  • Hard or technical skills tend to be more connected to individual tasks, jobs or industries. Since they evolve continuously, they also need to be updated more frequently.
  • Soft or durable skills, by comparison, are valuable across roles and companies and don’t come with the same expiration dates.

Because skills tend to be more focused and granular, their initial professional development pathways can also be more streamlined. If you have someone on your team who wants to improve their communication, they can take a course geared toward that. But to ensure the ability sticks over time, they need motivation and reason to use it, and they need opportunities to practice, perfect and use it. What bigger goal does the individual skill contribute to for the person and the organisation?

Competency vs. Skill Examples

By seeing how competencies and skills interrelate, you can better understand the differences between them. Consider these three examples:

  • Dental students need to learn how to pull a tooth, and that’s a skill. To develop true competency, they also need the knowledge to determine when such an action will be necessary, the confidence to make the decision, and the experience that will make it a routine behaviour.
  • Salespeople need to be able to conduct discovery calls with prospects. That’s the competency. Doing that effectively means having well-developed communication skills, a strong knowledge of the product or service offering, and practising handling a range of situations and responding to a variety of questions.
  • Chefs need to hone a variety of skills, including butchering, grilling and sautéing, but they can’t lead and manage a kitchen with these alone. They also need to be prepared to tackle menu design, pricing and inventory management. They need to be able to effectively communicate with both customers and staff. And they need culinary knowledge, confidence and the ability to craft new dishes.

Why Competencies Matter in the Workplace

We’ve established what competencies are, but why should organisations care? What difference do they make? Put simply, competencies matter because they’re what drive business outcomes.

Building on competencies can make training more scalable because they provide clear, repeatable pathways for development. They can help organisations identify the right people and teams for the right jobs more easily and quickly. Competencies can also be motivating for learners, as they’re often tied to tangible outcomes and goals for growth.

Does your organisation still need to put considerable effort into helping its people develop the right skills? Absolutely. But you need to know why they’re developing them. What gaps are they filling? Which goals are they tied to? How are you tracking progress and giving people opportunities to use their skills, knowledge and behaviours?

Aligning skills with competencies can help your organisation answer those questions and round out its training and business strategies.

Developing competencies to drive growth

As Dematic’s business grows, it needs to ensure that new employees can quickly gain the competencies they need in order to contribute high-quality work.

Learn more

Frequently Asked Questions About Competencies and Skills

  • If you focus solely on a person’s skills, you risk overlooking other important attributes required for a job. They may look good on paper, but they may not yet have the right knowledge, attitude or work habits to meet expectations.

  • Competencies are made up of skills—plus knowledge, behaviours and attitudes.

  • Skills are crucial parts of competencies, but competency is not a skill in itself.

  • Key competencies and skills vary depending on the job, career stage and industry. A job or task analysis can help you determine which competencies and skills are required for a particular position.

  • You should focus on cultivating skills to develop competencies and equip your employees with the knowledge, behaviors and attitudes required to effectively apply new skills and improve workplace performance.

  • Both. In some instances, people may need discrete skills to take on or advance in a role. In other cases, they’ll need broader sets of competencies (skills, knowledge, attitudes and behaviours) to be successful.

  • For each position, your organisation should encourage managers and L&D teams to work together to identify the competencies most critical for success. Then you can more easily identify skills gaps and pinpoint where employees need to focus their training and professional development.

  • Once you know what competencies are required for existing and future positions, you can more easily isolate skills gaps. Now you know where to begin reskilling or upskilling to prepare people for those positions, and you can confirm the need for a larger investment in your company’s L&D program.

Written by:

Haley Wilson

Haley Wilson is a Content Marketing Manager at D2L, specializing in the corporate learning space. She holds an Honours Bachelor of Arts degree from the University of Guelph as well as a Master of Arts focused in history from Wilfrid Laurier University.

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Table of Contents
  1. What Is a Competency?
  2. What Is a Skill?
  3. Examples
  4. Why Competencies Matter in the Workplace
  5. FAQs