The Complete Guide to Competency Training for Organisations

The Complete Guide to Competency Training for Organisations

Traditional training sometimes feels like throwing things at the wall and hoping that one of them sticks — it is capital intensive, surface level, and fails to provide a full proof means of verifying that the employee has gained mastery of a specific skill. 

Competency training and development is a better approach to improving employee performance. It is targeted and allows you to focus on skill gaps that actually impact your business. 

In this article, we will discuss the pros of competency training and why it’s a better approach for organisations. We’ll cover the following:

  • An overview of competency training
  • Competency training vs. Traditional training methods
  • Benefits of competency-based training
  • How to implement competency-based training effectively

What is competency-based training? 

The National Skills Commission defines competency training as “a structured approach to training and assessment that is directed toward achieving specific outcomes. It is about assisting individuals to acquire skills and knowledge, so they are able to perform a task to a specified standard under certain conditions.” 

Competency training exposes students and employees to new knowledge so they can develop the core skills for specific tasks like problem-solving or teamwork. These skills are then tested in a competency assessment, allowing instructors to objectively evaluate how much the student knows and how well they can apply that knowledge to solve workplace challenges. 

How is competency training different from traditional training?

While traditional workplace training takes a one-size-fits-all approach, competency training focuses on bridging specific skill gaps in employees to improve the organisation’s growth. 

Below are the fundamental differences between both training methods. 


Competency training evaluates how employees can apply specific skills to solve company problems. Say the training focused on logical thinking; the employee is put in a real-life scenario where they need to apply logical thinking to resolve a brewing crisis. 

On the flip side, traditional training mainly consists of theoretical assessments that test knowledge levels rather than the application of knowledge. 


Learners are rarely involved in the development of traditional training modules, resulting in: 

  1. A mismatch between the training modules and actual skill gaps
  2. The adoption of rigid techniques that make workplace learning difficult 
  3. Low learner engagement 

Competency training solves this problem by involving learners in module planning from the beginning. Learners assess their skills collaboratively with their trainers, identify skill gaps, and brainstorm on the best training methods for bridging these gaps. This collaborative approach makes competency training more effective than traditional training methods. 


Traditional training primarily uses summative assessments to test how much students know. Summative assessments use a standardised rubric — like an examination marking scheme — to measure a learner’s performance. It is administered at the end of the course or instructional unit. 

On the other hand, competency-based training relies on formative assessment to measure performance in real-time. Formative assessments are ongoing evaluations that help instructors measure mastery of competencies as learners progress from one training stage to the other. For example, learners might be asked to complete quick scenario-based tasks to show how well they can practice the skills learnt in a previous module. These real-time assessments allow the instructors to spot and address knowledge gaps immediately — so every learner gets carried along — rather than waiting until the end of the training period to spot these gaps. 

Learning pace 

In traditional training, the instructor sets the pace of the training — including the length of the training and the duration of each session. The training advances at the instructor’s pace regardless of whether or not a learner requires additional classes to master a particular competency. 

Conversely, competency training is learner-paced, creating more instructional flexibility. Say a learner hasn’t quite mastered a particular competency — in that case, they can request additional training rather than automatically advancing to the next module. Learner-paced training ensures students access personalised instructor support to support skill development and mastery. 


Competency Training Traditional Training
Assessment Formative like scenario-based tests and group discussions Summative like end-of-term examinations
Collaboration Yes, students and teachers design learning modules and methods No, mostly instructor-led
Performance-based Yes No
Learning Pace The instructor determines the pace The learning pace is personalised to suit the student’s needs

Why should organisations use competency-based training?

By allowing employees to focus on specific skills, competency training: 

1. Reduces training costs 

Competency training is often cheaper than traditional training because it focuses on equipping employees with skills specific to their positions — rather than generic workplace skills. 

Competency training begins with a skill gap analysis tailored to the company’s goals for a given timeframe. Upon identifying these gaps, the organisation creates targeted training programs to bridge them. This results in effective, small-scale programs that meaningfully impact employees and the business. 

The organisation can use the money saved on training costs for other business expenses like employee benefits or market expansion programs.

2. Increases employee efficiency 

Competency training helps employees master the core skills required for their roles so that they can complete work tasks on time and with minimal error. 

Say an employee is in charge of maintaining inventory for workplace safety equipment but always requests new supplies late because of the employee’s poor organisational skills — in that case, the company can organise competency training to teach the employee how to optimise their workflow and improve inventory management.

Increased employee efficiency boosts productivity. Let’s take a step back to the example we shared — if the same employee masters inventory management, you wouldn’t have to slow down production because workers cannot access safety gear as needed. You can scale your production volume and make more money. 

3. Allows for objective employee assessment

Competency training levels the playing field for employees, ensuring that their performance isn’t judged (entirely) by their weaknesses. Instead, employees get a fair chance to improve their skills, boost their productivity and move up the ladder.

Unlike traditional training that applies a one-size-fits-all approach to measuring employee performance, competency training personalises employee assessment. It entails identifying the specific needs of employees and creating targeted development plans to solve these needs. 

Skills gaps are not uniform across an organisation, so it isn’t easy to measure competency objectively with one rubric. An employee might be great with logical reasoning but need to work on their communication skills. If you measure their overall performance with only a logical reasoning rubric, they get a pass mark — you won’t find out that they lack good communication skills. 

Tip: Learn more about assessing your employees capabilities.

How to implement competency training effectively

Competency-based training involves assessing an individual’s current level of competency, then setting goals, designing learning activities and evaluating outcomes.

Conduct a Competency Gap Analysis

A competency gap analysis is a thorough evaluation of an employee’s strengths and weaknesses to find critical gaps that can hinder employee performance in the short and long term. 

To conduct an objective competency gap analysis:

  1. Write your organisation’s goals for a specific timeframe, like a quarter or a year. 
  2. Write out the core skills required for each goal. Say your goal is “record only 1% of workplace accidents” — in that case, a core skill will be verbal hazard communication. 
  3. Create a practical skill assessment — like an accident response drill.
  4. Administer a personalised SWOT analysis to get firsthand feedback from employees regarding their safety skill levels. 
  5. Analyse the results and responses from the skill assessment and SWOT analysis. 
  6. Assign grades to each employee using a point system or letter grading
  7. Fill out grades and training recommendations in your competency matrix

Create a competency matrix

After conducting a competency gap analysis, the next step is drafting a competency matrix. 

A competency matrix is like a scoresheet for recording how proficient an employee is with multiple skills. While a competency matrix doesn’t allow you to go into the intricacies of each skill level, it acts like a high-level overview of an employee’s strengths and weaknesses, so you can identify the most critical areas to focus on during competency training. 

A competency matrix comprises four key elements: 

  • Name of employees 
  • The skills/competencies being assessed 
  • Ratings 
  • Training recommendations 


Here’s a sample to guide you. 


Logical Reasoning  Workplace Safety Organisational Awareness  Recommendation


A D A Workplace safety training


B B A Primary: Workplace Safety Training

Secondary: Logical Reasoning



C A D Organisational Awareness Training 
Employee D D A A Logical Reasoning Training

Set your competency standards 

Competency standards are the skills, qualifications and performance criteria required for a particular profession. For example, RTO instructors must have vocational competencies to the level of instruction before they can teach and assess learners. They act as the single source of truth, without which delivering high-quality competency training becomes impossible, especially in large organisations. 

Competency standards determine the type of instructors you hire for the training, how employee performance is measured and the training duration. As such, it must include the following information (regardless of industry or organisation): 

  1. The performance evidence that learners must provide to be deemed competent in the skill — like specific tasks to be completed 
  2. The knowledge evidence to be deemed competent in the skill — like written tests 
  3. The conditions for training and assessment — including where the training will take place and the types of assessments 
  4. The unit-specific requirements that assessors must meet including licences and qualifications.
  5. The required industry experience for instructors who will assess the competency

You don’t have to create competency standards from scratch. Download and customise this competency standards template to suit your organisation’s requirements. 

Evaluate results

Evaluate results at the end of the training to know what you did right and what needs to be improved in the future. 

For immediate feedback, administer a survey to instructors and learners to get a firsthand account of their training experience. In the medium and long term, review employees’ performance to see if there has been any improvement since they wrapped up the competency training. 

Use competency management software to scale your training process 

In small organisations, it is easy to track and implement competency training manually. However, as your business scales, manual processes break, and you spend more time fixing them than administering effective competency training to improve employee performance. At this point, it’s best to invest in competency management software. 

Competency training management software like Cloud Assess empowers organisations to manage the end-to-end process in competency training, including practical competency assessments, compliance, and employee performance tracking. 


Learn more about how Cloud Assess works.

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