The digitalization of HR is sparking a renaissance of competence management.
For many years, competence management was an unfulfilled promise of HR.
A complex, bureaucratic system of organization – with dubious benefits for the company – except for the satisfaction of collective bargaining systems.
Digital HR tools are now taking a new approach and really promising added value.
There is hardly a company in the past 20 years that did not have its own department or at least the function ‚competence management‘. In my past, they produced endless lists with hundreds of competencies and whole mountains of job profiles. And in highly complex evaluation systems, these mountains were aligned with tariff systems and their groupings. Complex career maps, links to seminar catalogs, certificate databases and incentive tables were the derivatives of this work. Many managers stood in awe of this complex HR bureaucracy and kept asking themselves: Is this really necessary – and what is the real benefit for us? Sometimes rightly so!
Where was the problem?
There are a number of reasons:
- Competence itself is a rather vague concept in everyday business life. Depending on the definition, it can mean professional knowledge, experience, methodologies, certificates, complex skills or even personal characteristics, attitudes, motives, etc.
- Capturing competencies in a nominal or even scalable form adds another layer of complexity. Who decides how whether someone has a competency – or not?
- Assigning competencies to roles and job descriptions, transferring them into areas of responsibility and tasks, into minimum requirements for advertised positions – a constant issue for every HR professional! In Germany, you are also deeply involved in co-determination and collective bargaining law.
- And what do you do with it anyway? Competency-based development systems, performance management, target systems – in theory, everything can be plausibly derived from it. But in practice, the whole thing creates a bureaucracy of processes and interfaces that have to be managed. And every change makes the system appear rigid and inflexible.
- The introduction of such systems ties up resources and takes time. When asked which of these has really helped the business to move forward, the response is often a helpless shrug. No sooner has it been introduced than it is no longer relevant because the organization has already moved on.
As organizations become more agile, companies have moved away from the detailed administration of individual skills in each job profile. This is seen as an expression of an all too ‚blue‘ bureaucratic culture. Agile companies try to shake this off –
but then find out that at some point, even self-directed and agile companies find themselves dealing with detailed role descriptions again (Holacracy). So, is it not possible to do without them altogether above a certain size?
Instead of the detailed skill databases, simple competency models have emerged that capture attitudes and cultural factors (e.g. agility, collaboration or ownership) and then store these with examples of behavior – as a common cultural ‚language‘ in the company.
Why is this changing – or even getting better – in the context of digitalization?
The core problem with these old bureaucratic competency monstrosities was the fact that they were mostly Excel/PDF-based instruments. And these had to be coordinated and rolled out in manual process steps with a large group of stakeholders.
This initially made things slow and inflexible.
Intelligent HR tools are now bringing speed into the process. And the instruments are networked in real time. HR suites create low-threshold access for managers – the competency profiles of all employees or job profiles are now available at your fingertips.
Competency databases are self-explanatory and simply structured. The more complex HR tools are automatically linked to job exchanges and rating systems run automatically in the background.
Competency-based processes such as performance management or succession planning can be designed by simply ‚picking and dropping‘ – if necessary, even uniformly for a global user community. And many large HR suites already come with pre-set competency profiles or processes that only need to be adapted. Clear dashboards create transparency and an overview of your own resources. Connected digital learning platforms make the good old ‚training needs analysis‘ look like a typewriter compared to a smartphone.
Digital HR tools are actually in the process of gradually fulfilling an old promise of competence management!
HR Suite – or ‚best-of-breed‘?
However, not every organization has the capacity to acquire a comprehensive HR suite such as SuccessFactors or workday or SABA in the next few years. These systems already integrate competence management into different workflows – albeit with very different approaches. You should take a close look at this beforehand!
The ‚engine‘ behind it is always the same: cloud technology. Only this makes the systems highly flexible and the various sub-processes networkable. And cloud technology also comes at a price.
However, a few difficult and laborious months of implementation stand between this brave new tool world in ‚Apple design‘ and the gray ‚here and now‘ with the antiquated HR tool landscape. An HR IT integration is usually an extensive change program.
However, there are also a number of smaller tools that offer simply structured databases of competencies and pre-defined job profiles, also in a cloud-based format. And like the ‚big ones‘, they allow a simple query of competencies (superior, employee) and also enable the systematic post-processing of this data. HCM4all is one of these tools, whose system core is competence management. Such a ‚best of breed‘ solution often costs only a fraction of a suite and is ready for use within days.
Renaissance for competence management
In addition to cloud technology, there is another factor currently boosting the topic of competence management: digitization and the shortage of skilled workers – which, with increasing restructuring pressure in the future, makes strategic competence development indispensable.
“Which of my employees can I develop in the future and in which direction if we change our business model?“ … is the big HR question of the coming years! Without strategic skills management, this question can no longer be answered practically for the majority of companies with more than 1000 employees.
In addition, social media is making the skills markets more and more transparent. If recruiters on Xing or LinkedIn can assess and appreciate my skills better than my own company, then why should I stay there? Skills management is therefore becoming a competitive and retention factor in the recruiting markets.
Last question: where are we headed?
However, all these tools that I have just written about do not yet take into account the turbocharger ‚artificial intelligence‘.
There are already the first successful startups that automatically scour job databases with millions of profiles and thus create ‚competency-based‘ job profiles of the future ‚on demand‘. Completely automatically – for every need. And of course they can then fish the corresponding candidates out of social media and match them with the best profiles. Skillconomy is one such company. These are already the smart headhunters of the future.
And when it comes to the question of non-technical skills: attitudes, attitudes, personality, etc. – that too has long been standard. As is well known, just a few clicks on Facebook or self-written texts are enough to create a personality profile. The big HR suites have also boomed because the personal data behind them is so valuable. Data protection or not.
Those who think: none of this concerns me – we manage it ourselves best, should also consider what could be done with such technology and freely available data in the context of a due diligence in an (unfriendly) M&A project.
All these questions make it necessary to think about strategic competence management in your own company in good time. For example, in a small strategy workshop.
Smart competence management will become the new currency for corporate success!
