4 steps to create & use a competence matrix

Creating competence matrices

A competence matrix is a useful tool for visually mapping your staff’s core competencies. This article first explains what a competence matrix is, then how you can use it and lastly, and lastly how you can create one for your business in four simple steps.

What is a competency matrix?

competency matrices are similar to skills matrices, except – as the name suggests – they focus more on the competences that are existing or missing within your organization and less on skills.

The terms ‘competence’ and ‘skill’ are often used interchangeably, but they don’t actually mean the same thing. A skill is more specific and is often a component of a broader competence. Read more about the the differences between skills and competences in our article on this very subject.

As a quick summary, competencies are built on 3 components: the acquired knowledge, the acquired practical skills and the acquired social skills that the employee has gained to reach the set goals of the organization, targets of the team and his or her own goals. Just like skills, competencies are divisible into smaller parts. This makes it possible to make an overview of these parts in a clear competency matrix.

How to use a competency matrix?

Because matrices are a form of visualization, they provide a far clearer picture of the competences existing within a company or department.

This, in turn, allows HR departments or Team Managers to work more efficiently, for example, when training staff, But a competency matrix also gives practical guidance when putting together teams, or mixing and matching staff members for specific projects. Next to efficiency, competency matrices also help focus on the long-term goals of the organization.

  • Long-term competence matrix: A good point to start working with a competence matrix is by creating an ideal competence matrix for the entire organization in collaboration with higher management. In this matrix, all competencies should be included that are necessary to grow the company according to the long-term vision for the company. This can be translated into specific competency matrices for all departments, or even per employee.
  • Status quo competence matrix: The most practical way of using a competence matrix is by tracking the competencies of a department, a team or an individual. In practice, we see that it works best if multiple people within an organization take responsibility for keeping the matrices up to date.

After creating these two competence matrices, you will have a clear view of the existing and the needed competencies of the organization. Next in line will be the analysis of what the differences between these two matrices imply for the strategy of the organization.

Next steps:

  • Competence gap: The difference between the desired and the present competencies is called the competence gap. Based on this, managers and HR can more effectively decide who needs to do which trainings when. The growth of existing competencies and the closing of the competence gap can both be translated into leading KPI’s for HR or higher management. These KPI’s give a top-down perspective on the speed of the competence growth and so make it possible to conclude if the organization is going fast enough to stay (or become more) competitive within the larger market.

Most organizations either translate this ‘competence gap-KPI’ into a percentage of skills that are present out of the total amount of desired skills for optimal growth. Or they use the percentage of missing skills in the competence gap that needs to decrease over time through trainings and hiring new people.

  • Individual growth plan for employees: when the competence gap is set organization-wide, it is also possible to translate this to individual growth paths for employees. Teams should first be put together strategically and with all the individual competencies in one overview, it is now easier to determine and work together on strategic individual growth paths. These growth plans should include SMART-formulated goals for the employees to give direction and transparency on how to be successful in the organization. Time and again, we see how this has a positive influence on employee motivation and decreases employee turnover at our customers’ organizations.

Tip: AG5 skills intelligence software can keep track on these metrics, matrices and individual growth plans for you. Curious to practice first in Excel? Download one of our free MS Excel skills matrix templates and simply replace skills with competences along the top row and enter the corresponding roles/jobs down the left-hand column.


4 steps to creating competency matrices

Having read the potential of using up to date competency matrices, now it is time to get started. But where should you start if you are looking to create competence matrices yourself? First download the template above, and then follow the hands-on steps below to create your own.

competence matrix

Step 1: Ask yourself these fundamental questions

The way you want to design and use competency matrices depends on the questions and future ambitions of your organization. Before you start designing your matrix, it is vital to ask yourself and the leadership in your organization these five fundamental questions.

  1. What competences do my staff need?
  2. What competences do they already have?
  3. Is there a gap between what they need and what they have?
  4. If so, how are we going to acquire and master the missing competences?
  5. How and where can we formally demonstrate that staff have acquired and mastered certain competences?

Tip: To get the most complete picture possible, we suggest discussing the questions above with representatives of different layers of your organization, including HR and higher management. This helps with getting a good baseline measurement that everyone will agree on. It will also help in getting everyone involved in and working with competence matrices later on. Sure enough, middle-management might need to help in keeping the competence matrices per team up to date and higher management should be aware of the importance and value these matrices bring to keep day to day operations and productivity on track.

Step 2: Create a list of core competences

The second step involves creating a list of the competences currently present and required within a department or for a specific role or job. What do staff members need to have mastered in order to perform these jobs or roles properly?

This step gives a good view of which competencies are more widely needed and which are needed for certain specific tasks. But also on who in your organization has rare and valuable skills and needs backup in case he or she reports sick.


Step 3: Categorize specific competences

This step involves categorizing your general list of competences into those specifically required for a given department, an organizational unit, or for a specific role.

Generally speaking, these fall into one of three categories:

  1. Job‑related – competences relating directly to an ability to perform a certain task.
  2. Technical – skills, knowledge, and/or qualifications required to fulfill a specific job role.
  3. Value-based – values or ideals deemed important for the organization as a whole.

Depending on your type of organization, one or other of these categories may be more important to you. For example, are qualifications a mandatory requirement to perform a certain operation? If so, then these will play a more prominent role in your competency matrices.

It is also important to determine when someone has mastered a competence and how many functional levels there are within this competence.

Step 4: Merge into a matrix

Enter the details above into a matrix. List the names of your staff in the left-hand column and the selected competences along the top row. Insert a score or proficiency level in the resulting grid, reflecting the extent to which each staff member has acquired and mastered a certain competence or task.


Downsides of using a paper matrix

Of course, nothing is stopping you from simply creating a skills matrix with pen and paper. However, we see that this method creates more problems than it initially solves. Matrices become too complex and multi-layered and are therefore hard to adjust on paper. Not just because it is not as practical as Excel or software, but mostly because it just takes too much time.

Therefore, many professionals opt to start with using a spreadsheet, such as MS Excel, as this offers them greater flexibility and functionality. A major disadvantage of spreadsheets is that they soon also become overly complex, unwieldy, and very difficult to share with others. It’s not always clear who has the latest version and they are also easy to break (since you will need formulas)!

Special skills intelligence software

Fortunately, we have created special-purpose skills intelligence software that solves all these paper- and Excel problems.

AG5 helps you to keep your matrices up to date and allows multiple users to access and edit their information in an easy way. Now you can have a good view of multiple layers within your organization and everyone can log in whenever they need. Managers will receive automatic alerts when individual certificates expire and employees can track their individual growth in the mobile app. Watch how this works in practice or schedule a free demo!

Because AG5 replaces paper and Excel templates, it is easy to include in daily operations. This is important in the actualization of becoming a skills-oriented organization. Watch how the skills intelligence software works in practice or schedule a free demo!



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