In today’s ever-shifting talent landscape, companies large and small are searching for more effective ways to attract, recognize, and retain their workforce. These opportunities come in various forms — new or improved systems, strategies, platforms, and processes. But one smart move is to double down on organizational competencies. In other words, it’s worthwhile for companies to identify, prioritize, develop, and more fully leverage their unique strengths.
What Are Core Competencies and Why Should We Care?
Organizational competencies are a combination of the essential capabilities, knowledge, and skills that create value and fuel a company’s success. They define “how” an organization accomplishes its goals.
Although core competencies are deeply rooted in an organization’s DNA, they don’t materialize on their own. Instead, they’re established and reinforced through years of business experience and cumulative institutional knowledge, along with ongoing training and development. And although competencies are fundamental, they aren’t necessarily rigid and fixed. Just as any business grows and evolves, core competencies can shift over time.
Examples of organizational competencies include:
- Customer focus
By investing in their core competencies, businesses can improve performance in ways that create and sustain a competitive advantage. In fact, recent McKinsey research concluded, “Companies that focus on their unique strengths and leverage them across the organization are more likely to outperform their peers.”
Linking Organizational Competencies With HR
The concept of leveraging core strengths is not new. However, it’s gaining renewed attention, as employers struggle to address the challenge of attracting and retaining talent in today’s post-pandemic world. In this increasingly complex, fluid global business environment, employers must find ways to differentiate themselves.
One approach is to recognize and support the symbiotic relationship between business strengths and HR. In other words, it pays to ensure that organizational competencies are an integral dimension of HR strategies and operations. For instance, a company could emphasize the importance of improving HR’s ability to:
- Build and expand the workforce by attracting and retaining exceptional talent
- Identify and address workforce challenges and opportunities
- Empower leaders to measure, communicate, and proactively improve staff performance
- Better understand, measure, and coach people based on their functional role, team mission, and broader organizational needs
By strengthening these competencies, employers can expect to see improvement in workforce performance as well as overall business outcomes. Why? Here’s what experts say…
4 Ways Organizational Competencies Elevate HR Results
1. Recruitment and Talent Attraction
One way organizations can improve HR outcomes by leading with strengths is through recruitment. Employers that clearly articulate their core competencies and differentiate themselves from competitors are better positioned to attract top talent.
According to LinkedIn CEO, Jeff Weiner, “When companies focus on their unique strengths, they are able to attract talent that is aligned with their values and culture.” In fact, research indicates alignment with culture is one of the most powerful ways to drive retention.
2. Employee Learning
Training and development is another area where organizational competencies can help HR make a significant business impact. Companies that create a culture of continuous learning and improvement are directly shaping organizational competencies.
This kind of investment not only addresses an organization’s existing knowledge and skills gaps, but also demonstrates a long-term commitment that resonates with staff. As John Doerr, author of Measure What Matters, says, “Companies that invest in employee development are more likely to retain top talent and see a positive impact on their bottom line.”
3. Performance Management
Organizational competencies can also play an integral role in performance management. By clearly defining strengths and expectations, employers can provide people with a roadmap for success.
This also helps managers provide targeted feedback and coaching to support employees as they strive to define and achieve their goals. According to Kim Scott, author of Radical Candor, “When managers are able to clearly define expectations and provide feedback that is both kind and direct, they can help employees develop their competencies and reach their full potential.”
4. Performance Support and Coaching
Finally, organizational competencies can help HR teams more effectively identify and support high performers, while also coaching up people who are not performing at their best. By relying on clearly defined competencies, HR practitioners can more confidently create a framework to evaluate performance and identify areas for improvement.
This can also help managers provide targeted coaching and support to help employees develop additional competencies and reach their full potential. As Marcus Buckingham notes in his book, First, Break All the Rules, “Companies that focus on developing employees’ strengths are more likely to see improvements in performance and engagement.”
Final Notes on Core Competencies and HR
In today’s challenging business environment, sources of competitive advantage are hard to find. This is why more employers are leveraging organizational competencies to inform and improve their strategic HR efforts. By linking their unique strengths to talent acquisition and retention, employee learning, performance management, and coaching capabilities, they’re seeing improved workforce metrics. What’s more, they’re seeing better business results, as well.