The Competency Matrix: What It Is and How to Build One

Can you always judge your team’s competencies, skills and knowledge objectively? One of the biggest problems companies face is not knowing the full potential of the people they already have. A competency matrix can help. Here is how to build one and what you gain from using it.

What is a competency matrix and what is it for?

A competency matrix (also called a skills matrix) is a tool that sets out visually how far employees have mastered particular skills. It allows you to build teams whose competencies complement one another, to plan the training you need and to recruit in line with what the organisation currently requires. A competency matrix can also help with pay rises and bonuses, and with planning job rotation and succession for key people.

How do you build a competency matrix? A template.

Below is a short guide to help you create one. The template is fairly simple, and you can use it as a basis for a matrix of your own:

1. Map the competencies your organisation needs. They will probably differ from department to department, though some skills are universal.
2. Create a table with employees’ names down the rows and the competencies you have identified across the columns. You will enter a rating where the two meet.
3. Assign levels of mastery to each skill. You might use a scale from 0 (no knowledge of the subject) to 5 (expert knowledge, sufficient to train others) – what matters most is that the result is simple and clear to read.
4. Ask managers to complete the matrix for their own people.
5. Ask employees to rate their own competencies.
6. Hold a meeting at which employees and their managers agree a final rating together. Their assumptions about a given skill may differ, but the assessment should be as objective as possible.
7. Update the matrix not only when someone acquires a new skill, but also when a new competency emerges that the organisation needs in order to grow.

Building competency matrices – the advantages

Having a competency matrix, or several, brings many advantages. Four stand out:

• managing your talent pool: because skills and levels of mastery are easy to identify, spotting talent becomes straightforward. That allows you to plan succession and the company’s growth around the people you already have, or to choose the right training path,
• optimising your hiring plan: a competency matrix is rather like a stocktake of skills. Presenting it visually makes gaps easier to spot. That in turn helps you build a profile of the ideal candidate whose qualifications would fill what the organisation lacks,
• training matched to actual needs: knowing what you have and where the gaps lie allows you to refine your training programmes. This levels up knowledge across the team while also setting fresh challenges for the best in their field, so that they continue to find their work satisfying,
• building a positive organisational culture: a competency matrix is a tool not only for management but for employees. It makes it easier to discuss expectations and skills development. Building a competency matrix and keeping it current has a positive effect on engagement.

Building competency matrices – what to watch out for

The most important thing to grasp is that building a competency matrix is not a one-off task but a process. The organisation does not stand still: it keeps developing and setting new goals, and those goals call for new skills.

When you build the matrix, invite employees to help create it. They may have a perspective you lack from where you sit. It is worth including not only because it is valuable and can make the matrix for a given role more effective, but because employees who are invited to contribute will treat competency matrices as a tool that serves them too, rather than as something imposed from above.