Skills and competency management

Mark Homer

Skills management
If you're managing your skills, you're managing your business.

The author Mark Homer is Director of John Matchett Ltd, a software and training company based in Banbury, UK. Keywords Skills, Competences, Gap analysis, Training management Abstract Many leading companies are looking at ways to link skills development to strategic objectives as well as to demonstrate compliance with industry regulations. The greatest cost of learning is the time people are not working at their jobs. The solution is to minimise the time spent in training and focus people specifically on just the skills they need. It is important, therefore, to identify the skill gaps of employees in terms of the organisation's specific business goals and strategies. Competency management is now recognised as a key process to ensure that the individual and organisation training plans are linked to business goals. This article will illustrate how skills and competency management systems can help organisations improve the effectiveness of their training. Electronic access The research register for this journal is available at http://www.mcbup.com/research_registers The current issue and full text archive of this journal is available at http://www.emerald-library.com/ft

Industrial and Commercial Training Volume 33 . Number 2 . 2001 . pp. 5962 # MCB University Press . ISSN 0019-7858

A recent news item tells us that the UK is having to recruit IT experts from India because we do not have the necessary skills ourselves. If UK companies had adopted well-thought out skills management systems, we would not have had to resort to this drastic solution. This is a true story: a consultant worked for a worldwide IT consulting firm (one of the ``big six'') as a team leader for three years. He had programming and management experience in the HR area. He had a good background in PeopleSoft. When the project ended the consultant expected to be snapped up quickly as his skills were very marketable. He had to wait for six months before he found a project, for which he was ideally suited. However, he discovered that the same project had been looking for someone for six months! This meant that the project was already six months late, and the consultant had already been six months not earning revenue. The project finished six months late, and the consulting firm had to pay a fee to the client to compensate for the missed deadline. If the company had used a competency management system, the consultant could have been found in 20 minutes, not six months. People skills are probably the most important foundation for a company because they impact on every aspect of corporate process and, ultimately, profit. Ask yourself this question: what skills do you have that your current employer is not aware of? What skills do your colleagues have that their employers have never asked them about? It happens too often that an individual will apply for a job and send in his CV. This CV is then filed away and never looked at again while that individual works for the company. This results in classic situations where that same individual might complain that he was never considered for a particular promotion or different job within that same company because the employer is simply not aware of the additional skills he has. Most people come to a new job with portable skills (e.g. ability to speak a foreign language, professional designations, academic degrees, facilitation skills, etc). 59

Skills and competency management

Mark Homer

Industrial and Commercial Training Volume 33 . Number 2 . 2001 . 5962

We are now seeing more benchmarking techniques coming in, sometimes known as competency related pay. Over the past 18 months competency and skills management have become increasingly hot topics. Historically, employers have been struggling to define their competency models and therefore found implementation of skills management a problem. However, libraries of competencies have now been developed which can be tailored to apply to particular vertical markets, specific organisations or the entire organisation. This means that the HR manager or the training manager is not starting out from scratch to define the skills he needs, because he now has a defined, well-thought out structure. The judicious management of skills can have an impact on every business. But the organisation does not necessarily have to be a large company to benefit from this approach. Obviously, not all the competencies in the skills database are of relevance to particular organisations. They can pick and choose the skills that they do need, and add their own skills, which may be the use of a specific item of machinery or an in-house computer system developed for that company. Some organisations are aligned to curricula that is commonly accepted, particularly in the IT industry, such as the Oracle, Cisco or MicroSoft qualification route. There are skills dictionaries available which include skills in IT, marketing, sales, management, engineering, accountancy and HR which are included within the available competency libraries. Which vertical markets have been most receptive to skills management so far? These would typically be those organisations which are heavily involved in training and development; companies planning to align skills development with their key organisational goals and objectives; companies which wish to dramatically streamline their resourcing and recruiting practices; companies which experience large staff turnovers and where staff retention is a problem; organisations which have experienced extensive corporate expansion; businesses that are undergoing technological, geographic or fundamental cultural change; firms that understand the value of succession planning. All these companies have come to realise the benefits of being able to search the skills profiles of their current staff. They can 60

save themselves costs in the long term and increase organisational performance and profit. Examples of organisations using skills management include the following: . Whittman-Hart (W-H) is an IT management consultancy providing ebusiness solutions for fast growing and middle-market companies. W-H is empowering these employees to reach their career goals, and in the process, help Whittman-Hart reach its aggressive growth goals. The Whittman-Hart Institute for Strategic Education (WHISE) recently launched WHISE Campus, a Web-enabled virtual university that includes a competency-based career management system. WHISE Campus is designed to meet the following goals, identified in Whittman-Hart's strategic growth plan: . clarify new standards and expectations for employees; . improve the alignment of individual skills with business opportunities; and . encourage and support employee development and career ownership. Whittman-Hart has developed a leading edge competency management system. ``The system motivates employees to take charge of their careers by helping them easily understand the skill gaps between where they are today and where they want to be and then showing them how to close those gaps'', said Connie Molitor, Director of WHISE, in a recent interview. ``By building their skills, employees are positioning Whittman-Hart to serve our clients better. This has been the catalyst of Whittman-Hart's growth, and this will continue to spur our growth in the future''. Another key to W-H's growth has been its ability to attract and keep quality technology professionals by ofering them challenging work opportunities and innovative career development programs. The competency framework strengthens this advantage by expanding the number of career options and career pathways available to employees. It will also form the foundation for W-H's career model by establishing a company-wide dictionary of skills and competencies that serves as a basis for all W-H job profiles. These profiles can then help integrate business processes such as career pathing,

Skills and competency management

Mark Homer

Industrial and Commercial Training Volume 33 . Number 2 . 2001 . 5962

performance management, recruiting and selection and resource deployment. ``Managers and employees alike have repeatedly commented that they now understand the value of using a single language to support multiple processes'', said Molitor. ``Our competency management system is an important part of Whittman-Hart's commitment to lifelong learning and ongoing career development. Our goal is to offer our employees a professional development system unlike any other in our industry, and this systems brings us one step closer to that goal''. Whittman-Hart have grown to double their size and have recently changed their name to MarchFIRST. The competency management system is linked to an extensive range of courses from a company called SmartForce. As the employees go through the assessment process for their job roles, they develop a skills inventory. So when MarchFIRST wins a contract, they set up all the profiles for the ideal people they need to staff that project team, then they can access a list of all the people available in their organisation with those skills. Obviously, this leads to projects being finished more quickly. Other organisations that are implementing competency-based processes include: . American Airlines have established a corporate university to support the development of 130,000 users throughout the world. They use a competency management system (CMS) to manage the development of their employees. They are currently implementing the CMS for their first level supervisors. Job profiles have been developed for each of the seven different first level supervisory positions. Competency models and proficiency levels were developed. This enabled the American Airlines corporate university to define what training was needed for the first level supervisors. This emphasis on training and development will permeate throughout the whole company so everyone will be able to see how they could progress their careers from a skills development perspective. . A Fortune 500 company with a $1 billion training budget, used competency based 61

processes, and thus reduced their training costs by 50 per cent. AT&T was able to increase sales per person per year by an average of $220K. Belk Department Stores Services Inc. reduced staff turnover from 25 per cent to just over 10 per cent. Petro-Canada increased its job skills use from 30 per cent to 90 per cent. Placer Dome consolidated 113 salary ranges into five broadbands. A large US Government organisation with 2,400 users is using skills management linked with training to find and address their skill gaps. They have set up their return on investment measures against the skill health statistics in their system. They can now align skills and development activities to their goals and objectives throughout the organisation.

How can skills management save companies money?

It is most important to identify which particular set of key skills is required for the business to achieve its strategic goals. Equally vital is the ability to ``health-check'' that organisation's skills on a regular basis and define where the gaps are and how they can be filled. Changes in skill health statistics can be aligned within organisational return on investment measures. Skills management can save a company money through effective resourcing. Imagine the cost of recruiting staff: typically the process works through advertising the position, receiving the CVs, selection criteria, rejection of most of the CVs, shortlisting and final job offer; training of that individual. Imagine the scenario when you go first to the skills library: reviewing the potential competences you already have in your business; looking at how much it would cost to develop an existing employee to the position that is required; implementing a succession plan for the organisation. In this way, crisis management can be avoided, because by health-checking the skills of the organisation, you can identify whether there will be a particular shortfall in a crucial area and how to pre-empt the problem. This gap analysis involves matching the shortfalls to training solutions. Vendor

Skills and competency management

Mark Homer

Industrial and Commercial Training Volume 33 . Number 2 . 2001 . 5962

training maps have been developed in the industry which include on-line, e-learning, CBT and also instructor-led training content. These vendor training maps are cross referenced against the skills in the various competency models. These links between skills and training interventions add tremendous value to users who can immediately see what training they need in order to develop their competences. Further, the vendor training maps add value to an organisation's investment in courses libraries. Are personal qualities taken into account in skills management? The answer is that any aspect of a competency can be measured. Any aspect of personal development or ``soft skill'' can be defined and evaluated. An example would be: the ability to give presentations. First, you would define what this skill means, and you would define behaviour at one or more proficiency levels. A person would assess their skill level based on the behavioural anchors established. The essence of successful skills management is an evolving process of reevaluation of competences. They are evaluated at reviews, after a training course, after any development managers are regularly involved in the review process. The maintenance of a working skills database does not become such a chore when it is constantly kept up to date, since competency-based

processes are normally tied to regularly occurring business processes. A culture can be evolved where people are regularly maintaining their own personal skills profile along with their personal development plan. This becomes a task which is important and beneficial for the manager and the employee to own and develop. It provides the company with very valuable data and it enables employees to benchmark their career and satisfy their aspirations. A fast way for the individual employee to build up his own personal skills profile is for him to compare his skills and proficiences to those in a job along his career path. He can then see instantly where he meets the job requirements and what skills he is missing. As well, employees may search the skills dictionaries, and the organisation may ``assign'' strategic skills to the employee.

Conclusion
Skills management is a process that is gaining popularity in all areas of human resource management. The capability to assess competencies and determine skills gaps enable organisations to implement more costeffective and meaningful training and development practices, determine changes in individual and team performance, and select better candidates.

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