Why is competence management important?

by Apr 27, 2022Competency Management

What are the benefits of skills management in an organisation? What benefits of skills or competence management can be attributed to the individual stakeholders? Yes, why is competence management important? These questions are answered in this article.

Advantages for executives

Managers are all employees in managerial positions who have responsibility for other employees. Employees who are assigned to human resources management are excluded.

Capture qualifications

Competence management or skill management makes it possible to record the qualifications, but also the experience and knowledge of individual employees. This knowledge of who has what qualifications is necessary to delegate projects and work tasks to the right people.

Identifying competence gaps

In order to fill up missing knowledge in a team, it is necessary to document current as well as required competences. Such a target/performance comparisonis crucial to identify and consequently close competence gaps. With regard to certifications, it is also necessary to record any outstanding certifications in a system (see certification management).

Find experts

Skill management allows you to search for qualifications or experience. For example, you can search for suitable employees in project management or find suitable experts for special work tasks.

Advantages for personnel managers

Human resource managers often bear the responsibility when it comes to recording competencies in the company. They are also the ones who often gain the most benefits from competence management.

Closing skill gaps

Competence management not only helps to identify competence gaps but consequently also closes them. Competence requirements are formulated when creating a skills management, skills catalogue, and target requirements for job profiles are defined, e.g. in the course of career planning. With the data gained from this, which is collected e.g. in a skills gap analysis, HR managers can take further training measures to close skills gaps.

Recording and promoting talents

Which talents or high potentials can be identified and promoted; this question can be pursued in the field of talent management. Talent management often describes a strategy or process of how to use the competence data set of a skills management system with regard to talents.


Succession planning is needed to be able to fill key positions or management positions internally. For this, it is necessary to know which qualifications are available in the company and which competence gaps exist.

Targeted recruiting

In order to know what requirements must be placed on new employees, it is necessary to know what competence requirements a new appointment should have. What qualifications do existing staff have and what knowledge or experience should be added to a new staff member?

“The competencies of the employees are the most valuable resource of any company”

Advantages for employees

In order to define the benefits of competence management for employees independently of the competence management system, we assume that it is a solution which is not yet based on self-service.


Career steps become comprehensible and transparent through the creation of a career plan. Qualifications and experience are used in skills management to identify career opportunities.

Advantages for top management

Both top management and the company, in general, can benefit from skills management – we clarify the question: Why is skills management important for top managers?

Counteracting the shortage of skilled workers

External recruiting is expensive and often not effective. Therefore, many companies are expanding their internal training in order to build up qualified employees within the company.

Competitive advantages

Those companies that manage to best promote the competencies of their own employees make themselves attractive not only as employees but also to their customers.

About the Author

Simon Löwy

Simon Löwy

Simon is co-founder of Skilltree. He writes in this blog on topics such as new work, human resource management and personnel development.

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