Skills vs. competencies – what’s the difference, and why should you care?

“Skills” and “competencies” are two terms you’ll most probably come across when searching for your next job. It might seem as if these two words are interchangeable – but it’s actually not quite right to describe “competency” as a synonym of “skill”.

There is a very real difference between these two terms. If you’re looking for a new job or are keen to understand how you can advance in your career, it’s important that you recognise the differences between the two. Realising the difference will help you to:

Review job descriptions more effectively, so that you can more accurately understand which skills and competencies the employer is looking for, and why.
Add skills and competencies to your CV in a way that resonates with the reader.
Explain what your skills and competencies are in a job interview, and directly relate them to the job you’re applying for.
Understand any skills gaps and which competencies you may need to build on to advance your career, both now and in the future.

How do skills and competencies differ?

What are skills?

Skills are the specific learned abilities that you need to perform a given job well. Examples, depending on the specific role, range from handling accounts and coding to welding or writing tenders. There is a distinction to be made between hard skills and soft skills – a hard skill is a technical and quantifiable skill that a professional may demonstrate through their specific qualifications and professional experiences, a soft skill is a non-technical skill that is less rooted in specific jobs. An example of a hard skill could be computer programming or proficiency in a foreign language, whereas a soft skill may be time management or verbal communication.

What are competencies?

Competencies are the knowledge and behaviours that lead a person to be successful in a job. Examples of competencies include the improvement of business processes, strategic planning and data-based decisions. Competencies explain how an individual’s behaviours bring about the desired results in their role. As with skills, there are various types of competencies – including core competencies, which are those that any successful employee requires to be promoted through an organisation.

The following breakdown further summarises the differences between skills and competencies:

Skills

Definition: Specific learned abilities that you will require to perform a given job successfully

Examples: Handling accounts; coding; welding; writing tenders; computer programming; foreign language proficiency

Competencies

Definition: Knowledge and behaviours that lead you to be successful in a job

Examples: Analytical ability; problem-solving; initiative; negotiation; improving business processes; strategic planning; data-based decisions

How can skills and competencies factor into your job search?

So, it’s now time to apply what we’ve learned so far about skills and competencies to each stage of your job search – and beyond.

Job descriptions

Most job descriptions can be broadly considered to be either skills-based or competency-based. They differ in that skills-based job descriptions typically consist of the job title, responsibilities and skills required, whereas competency-based job descriptions tend to take a more holistic approach by also considering the behaviours that will lead to success in the job.

To go into more detail, a skills-based job description is the more ‘traditional’ approach and therefore the one you may be most familiar with. It’s the kind of job description that outlines the responsibilities of a position by listing the tasks to be completed and the skills required to do so. It specifically focuses on the candidate’s qualifications and experience, without considering their merits as a whole person.

A skills-based job description, then, might state a preference for you to have a BA in accounting or finance, at least three years of accounting experience and strong proficiency in Xero or Excel.

As for competency-based job descriptions, their approach is based on the premise that past behaviour predicts future performance. Such job descriptions make a connection between the skills, knowledge and behaviour of the candidate – in other words, how they apply their skills and knowledge, instead of merely what skills and knowledge they possess. This type of job description therefore provides more context than a skills-based one, which helps to explain why it is more common in today’s world of work. It is a more inclusive way of communicating what the candidate requires to do the job well.

So, a competency-based job description might also include the need for analytical thinking, teamwork and a client focus. Such job descriptions emphasise the qualities of the worker as well as the skills they require and tasks they’ll take on.

Your CV

Next, you’ll need to update your CV in a way that lets both your skills and competencies shine through.

As always, when you’re applying for a role, you must first review the job description. This will enable you to pick out the relevant opportunities to mirror the skills and competencies in the job description with those on your CV. So, determine whether the job description is skills- or competency-based, or a mix of the two, so that you can tailor your CV to what the reader is looking for.

Identify the skills and competencies you possess that are required to perform the job you're applying for. Then list them under your professional summary, as per our CV template.

You should also incorporate your relevant skills and competencies in the work experience section of your CV – for example, in the case of a previous finance role, competencies such as conflict management, change management and strategic agility may be relevant in addition to your technical and soft skills. Remember to also communicate the quantifiable results you were able to deliver because of your competencies and skills.

The job interview

When it comes time for a job interview, you need to share both your relevant skills and competencies verbally.

Along with asking specific questions to determine your technical and soft skills, expect to be asked competency-based interview questions. We’ve previously provided advice on how to answer competency-based interview questions. Remember, competency-based questions aim to test for specific attributes. You may be asked to explain how you resolved a tricky work situation in the past or how you previously worked alongside other team members to achieve a good result.

Don’t forget to highlight your learning mindset in your interview it's an important competency in our landscape of rapid change. How willing are you to learn, for example, the skills and competencies that you don’t already possess, or will need in the future?

How to develop your career by upskilling your skills and competencies

Understanding the difference between skills and competencies isn’t just important during the job search process. It can also help you realise which areas you need to build on and develop to further your career. One way you can do this is by regularly conducting a personal skills and competency analysis.

Whether you conduct this analysis on your own or with the support of your manager, it involves considering the jobs you aspire to – both now and in five to 10 years’ time – and consider which skills and competencies you need to learn in order to become a suitable candidate and reach these goals. The key is to be honest and curious so you can identify the areas that you can develop in.

Understanding your skill and competency gaps will enable you to go about proactively upskilling in your own time. You can also ask for stretch opportunities at work. Importantly, you could make this the start of a habitual cycle of reflection, adopting a mindset of lifelong learning.

And, if you are seeking a new job, remember that the job interview is a great place, via smart questioning, to find out if your potential employer will be able to support you in your personal development and upskilling in a truly meaningful way for you.

You need different skills and competencies at different stages of your career

It’s also important to understand that at each stage of your career, different skills and competencies will be important for ensuring your success.

At the start of your career try focussing on building your technical skills and expertise. As your career progresses, you are likely to move away from certain day-to-day tasks, and towards projects in other areas of the business.

These later stages of your career are where such competencies as the ability to influence, negotiate and strategise will need to be developed. But at the same time, you will also need to ensure you do not neglect the harder technical skills that you require to continue thriving in your profession.

Never overlook the importance of skills and competencies

Skills and competencies are not just buzzwords littered throughout job descriptions. They give us the tools to be successful. So, if we don’t understand the difference between them, how can we advance our career, both now and in the future?