Why a Competency Management System is great for your business!

Posted on 17/08/2023

Handling corporate-level human resources can feel overwhelming and you can often feel out of touch with staff on the ground. A well-oiled Competency Management System is a game-changer when it comes to understanding people, their job roles and freeing up your time for strategic thinking.


We want to take you through the key benefits of running an HR system tailored to your business needs.

What is a Competency Management System?

At its very core competency management is the practice of identifying the specific skill sets required for individual jobs and analysing employee performance against job, department or even business KPIs.


Great competency management is about using those insights to develop and manage both job functions and the individual. It’s about identifying organisation gaps and filling them with well-trained, well-rounded and happy staff.


A Competency Management System is your one-stop solution for collecting this vital real-time data and automating important HR tools like your learning management systems (LMS).

The benefits of using a Competency Management System

Human resources management relies on intuition, good people skills and above all strong systems. Using a Competency Management System as part of your approach benefits your business in the following ways.

1. Helps you to make decisions based on real-time data

As an HR professional, you need to make personnel decisions quickly, more importantly, you need to make them in favour of what is right for the business. This means assigning the most competent person to the right role and managing their performance and development.


Make the wrong decision and management will soon let you know!


This is why understanding human resource data in real-time is critical and effective reporting is your answer. The right system set-up will give you access to personnel files and important stats within seconds, and it can even show you the bigger picture when it comes to team performance too.

2. Identifies gaps quickly

When an employee leaves and we start looking for a replacement we can often fall into the trap of dusting off an old job spec. The problem here is that we haven’t accounted for how the job has changed over the time an employee has been with us. We also haven’t accounted for what we have learned during the life cycle of the departing employee.


A competency-based management system can help you track all of that and spot exactly where gaps have appeared. The system can go further than this, it can help you sift through your prospective candidates, by matching skill sets with factors like safety.


Let’s take an example.


One of the jobs we have recently showcased at mselect is an Electrical Engineer for an international oil and gas operator in Basrah. Quite rightly this supervisory role requires a BSc in Electrical Engineering and eight years of on-the-job experience. Let’s imagine the last employee who filled this role had all of these qualifications but wasn’t great at communicating with the site coordinators. As a result, incidents could have triggered serious safety issues for the company if problems weren’t communicated effectively.


Using a competency-based management system we could spot this problem quickly and highlight it as something we need to improve on with our next selection.

3. Helps improve employee retention

87% of learning and development leaders (L&D) said that their functions have become more strategic in 2022, leading to heavier involvement in organisational change (according to a LinkedIn workplace learning report). Is this recognition that training and retaining the right talent in teams is becoming more and more vital to company growth? We believe so.


This is where a good Competency Management System comes into its own. Why? Because we can use it to spot gaps in diversity, equity and inclusion. We can identify candidates for creative and skill-based training. And we can integrate this system with our LMS to make sure we are delivering on skill-building and business strategy targets.


According to that same LinkedIn report, we also heard from employees who say that learning helps them stay up to date in their field, seek promotion and meet career goals. Proving there is an appetite to stay with current employers if job development is an available option.

4. Promotes stronger teams and company growth

After Covid, the world has seen a shift in both the way we work and how we handle employee wellness.


78% of employees said that the pandemic negatively affected their mental health according to a report by Oracle and Workplace Intelligence. Even more shocking was that 68% of those surveyed said that they would rather talk to a robot over their manager about stress and anxiety at work. We believe this is a management or HR gap your Competency Management System could help you spot.


In 2021 the corporate wellness market was reportedly worth US$ 56.9 Billion and between 2022 and 2027 it is set to increase by 7.9% to US$ 85 Billion, according to early estimates by imarc. A coincidence? No. We believe that this market will increase further as organisations invest in wellness solutions to help retain and motivate staff.


Using a competency system in conjunction with your corporate wellness program would vastly expand upon your work, because in understanding competencies and reviewing performance you can better spot natural stress points.


A stronger, well-balanced and confident employee is someone who is proactive, committed and supportive within a team, leading to an increase in profits by 29%.

5. Prioritises employee autonomy

Part of the beauty of a centralised competency system is that it allows employees to be autonomous. All they need to do is log in to one portal to access attendance records, salary details, update personal data, view their performance and interact with learning tools. They can even use it to give you feedback.


What does this mean for HR personnel? It means many of the LMS functions, wellness program steps and employee documentation can be automated. Leaving you to do what you do best - strategy and human intervention.

Final thoughts: You need to build the right Competency Management System for your organisation

As your business scales it becomes naturally more difficult to be as hands-on with staff as you would like and finding the time to strategically plan your next recruitment dwindles. We believe a Competency Management System is the puzzle piece that you are missing.


Automation and personnel autonomy through a centralised system creates more time for human resource planning by giving you real-time data at your fingertips. Performance reviews, appraisals and recruitment become easier and as a result, you retain more talent through tailored training and wellness improvements.


A happy and committed team ultimately strives for truly sustainable growth. That has to be worth its weight in gold as a return on investment!


Need help setting up an HR system that will work with your unique business needs? Or maybe you’d like to outsource and make use of ours? We can help you with both. Contact us today for a free consultation.