With the need for faster and more globally competitive workplaces, businesses in Australia are constantly looking for ways to optimise their workforce and ensure employees are equipped with the right skills to meet organisational goals.
The LinkedIn Workplace Learning Report showed that 94% of employees prefer to stay longer on companies that invest in career development. One good investment for your team’s career development is a well-defined competency matrix. Companies with good competency frameworks see a 30% increase in employee engagement.
What Is a Competency Matrix?
At its core, a competency matrix is a tool organisations use to map out the skills, knowledge, and behaviours required for various roles within the company. It clearly represents the competencies necessary for employees to perform their tasks effectively and how individual staff members or teams align with those requirements.
A typical competency matrix template lists competencies such as technical abilities, leadership skills, communication skills on one axis and employees or roles on the other. It enables managers and HR professionals to identify skill gaps, track progress, and plan for future development needs. This clarity can also drive talent development, performance appraisals, and recruitment efforts.
Competency vs Skill Matrix: What’s the Difference?
While the competency matrix and skill matrix aim to assess employee capabilities, they are not the same. The competency matrix focuses on broader, more holistic performance measures, including behavioural traits, attitudes, and values, alongside technical skills. Competencies are often linked to organisational goals and culture, making them critical to long-term success.
On the other hand, a skill matrix typically focuses more on specific technical abilities or knowledge related to particular tasks or processes. It’s more tactical and looks at the “what” employees can do, whereas a competency matrix considers the “how” and “why” behind an employee’s performance.
For example, a skill matrix might assess an employee’s ability to use software or perform a specific technical task. In contrast, a competency matrix could evaluate a broader range of qualities, such as problem-solving, leadership, teamwork, or customer service skills.
How to Build a Competency Matrix
Building a competency matrix for your organisation involves several steps. Here’s a quick guide to get you started:
Identify Key Roles and Competencies
Define the core competencies for each role within your organisation. These competencies could be a mix of technical, managerial, and interpersonal skills essential for success in each position.
Define Competency Levels
Create a scale to evaluate each employee’s proficiency level in each competency. This could range from “beginner” to “expert” or use a more detailed scale such as “novice,” “intermediate,” and “advanced.” It’s important to establish clear definitions for each level so that assessment is consistent across the organisation.
Assess Employee Competencies
Using the matrix, assess each employee’s current competencies and map them to the required levels for their roles. Depending on your company’s needs, this could involve self-assessments, manager evaluations, or peer reviews.
Identify Gaps and Development Needs
The matrix will highlight skill gaps or areas where an employee needs improvement. This insight can inform targeted training and development programmes.
Review and Update Regularly
A competency matrix should be a living document that evolves with the organisation. Review and update the matrix regularly as roles change or new competencies emerge.
What Makes a Good Competency Matrix Template
For Australian businesses looking to optimise their workforce, using a competency matrix template is a good start. The key considerations to make when building or choosing a template are as follows:
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Align with Business Goals and Strategy
A competency matrix should directly support an organisation’s overarching objectives, such as fostering innovation, improving customer satisfaction, or achieving operational excellence. The matrix must reflect both current priorities and future ambitions, serving as a roadmap to ensure the workforce’s skills align with long-term corporate strategy. This alignment ensures that every role contributes to the company’s mission and helps maintain competitive advantage in a dynamic market.
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Understand Legal and Regulatory Compliance
Corporate companies in Australia operate under stringent employment laws, including the Fair Work Act 2009 and anti-discrimination regulations. It’s essential that the competency matrix is designed to promote equality and inclusivity, avoiding any bias that could marginalize particular groups. Ensuring compliance not only protects the organisation from legal risks but also reinforces its commitment to fair and equitable practices.
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Tailor to Workforce Demographics
Australia’s workforce is highly diverse, encompassing people of varied cultural backgrounds, age groups, and skill levels. A competency matrix should reflect this diversity by being adaptable and inclusive. Recognising generational differences in work preferences and expertise allows organisations to craft a tool that engages all employees effectively.
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Define Clear Competencies
Competencies must be defined with clarity and precision to ensure they are understandable and actionable. Categorising them into core (shared across all roles), role-specific, and leadership competencies helps streamline their application. Using straightforward language free from jargon ensures the matrix is accessible to employees at all levels, facilitating its effective implementation.
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Involve Stakeholders
Developing a competency matrix is not a one-sided process; it requires input from key stakeholders, including employees, team leaders, and HR professionals. Collaboration ensures the matrix accurately reflects the skills and behaviours needed for success within the organisation. Engaging with industry associations or consulting external benchmarks can also provide valuable insights, ensuring the matrix remains competitive and relevant in the broader market context.
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Emphasise Future Skills
In an era of rapid change, particularly with advancements in technology and shifts in business practices, a competency matrix should address future needs. Skills like digital literacy, data analysis, and sustainability expertise are becoming increasingly important in Australia’s corporate landscape. Incorporating these competencies into the matrix ensures the workforce is prepared for emerging challenges and opportunities, creating a culture of adaptability and resilience.
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Plan for Continuous Updates
Competencies evolve alongside industry trends, organisational goals, and employee development needs. A competency matrix should include a mechanism for regular review and updating to ensure its relevance over time. Whether prompted by a shift in corporate strategy or the introduction of new technology, these updates keep the matrix aligned with the organisation’s changing priorities, ensuring it remains a dynamic and valuable tool.
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Facilitate Training and Development
A well-designed competency matrix doesn’t just highlight existing skills; it identifies gaps and opportunities for growth. Linking the matrix to training programs allows organisations to provide targeted development pathways for employees. In industries facing significant skills shortages, such as tech and healthcare, this connection between competencies and training is critical for building a resilient workforce and ensuring business continuity.
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Leverage Technology
Technology can simplify the creation and management of a competency matrix. Tools like learning management systems or HR platforms provide the ability to track progress, generate reports, and facilitate updates. These systems also enhance accessibility, enabling employees and managers to engage with the matrix seamlessly.
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Focus on Usability and Integration
For a competency matrix to be effective, it must be user-friendly and easily integrated into existing HR processes. This means designing a tool that is intuitive and practical, encouraging regular use by employees and managers alike. By embedding the matrix into key workflows—such as recruitment, performance appraisals, and succession planning—it becomes an indispensable part of the organisation’s talent management strategy, driving both individual and organisational success.
Download Competency Matrix Template
The Importance of a Competency Matrix for Australian Companies
For Australian businesses, particularly those in highly competitive sectors or industries experiencing rapid change, a competency matrix is not just a tool for assessing current skills—it’s a strategic asset that drives growth and innovation. Businesses can ensure they are better equipped to meet future challenges by identifying and addressing skills gaps. Moreover, a clear competency framework helps organisations retain top talent by offering targeted development opportunities that align with personal and business goals.
In addition, in industries with increasing regulation or a need for highly specialised skills including healthcare, finance and engineering, a competency matrix ensures that employees meet the necessary standards while promoting a culture of continuous improvement.
Track Your Team’s Competencies Today!
A competency matrix is essential for any organisation that wants to stay ahead in today’s dynamic business environment. By mapping out the competencies required for success and tracking individual performance, Australian companies can align their workforce capabilities with strategic objectives, streamline learning and development, and build a solid organisational culture.
For decision-makers aiming to implement this framework efficiently, leveraging a Learning Management System (LMS) like eSkilled is essential. An LMS enables you to monitor your employees’ training progress and competencies in real-time. By identifying your team’s growth opportunities and strengths, you can create a tailored training plan that organises a clear and structured learning path for each team member. This approach not only enhances individual development but also aligns with your organisation’s strategic goals, ensuring that your workforce remains skilled and competitive.
Book a demo of our eSkilled enterprise LMS and see the difference today!
