How to Create a Comprehensive Competency Model From Scratch (+ Free Templates)

Competency models, or competency frameworks, are essential tools for HR professionals. These powerful tools map out the skills, knowledge, and behaviors required for success in a role.

Follow this comprehensive step-by-step guide to create a well-structured, and future-proof competency model. You will find examples and free competency model templates to assist you in your process.

Step 1: Define the purpose of creating the competency model

Before you start creating a competency model, ask yourself:

• Who will use this—a specific department, leadership, or the whole company?
• What are the user needs from the competency model—to assess performance, develop specific competencies, or address competency gaps?

The purpose of your model will determine what information and specific competencies you should include in the model.

The goal of competency models can be:

• Performance: Run fair performance reviews, analyze skills gaps, streamline compensation structure
• Engagement: Promote horizontal mobility and create transparency around expectations at different levels
• Recruitment: Coordinate recruitment efforts to existing or missing competencies and ensure consistency across recruitment practices
• Career development: Enable more strategic training programs, succession planning, and career growth in your organization

Having no clear goal in mind and rolling out a company-wide competency model might result in zero usage, time waste, and a loss of trust in the framework or even HR practices among employees and managers.

Step 2: Pick a relevant system for your organization

Your system will define the types and the amount of competencies, the levels for each, and whether you distinguish between leadership and individual contributor competencies.

Structuring your model

Depending on your goal, company size, and company structure, decide to structure the model around:

• Company values: All chosen competencies will directly tie to one of your company values
• Job families or departments: Each job family will have a set of shared competencies (e.g., marketing, engineering)
• Roles: Each role will have distinct functional and technical competencies (e.g., Content marketing, SEO, Product Marketing, Paid Ads, Email marketing, etc.)
• Core competencies: All roles and departments share the same competencies
• Individual contributor/leadership tracks: Leaders would have additional competencies compared to individual contributors

You can also mix and match the various structures. For example, you can combine core competencies shared across the entire organization with role-specific technical and functional competencies. Use the different types of competencies as building blocks for your model.

Defining the total number of competencies per role

The total amount of competencies will largely depend on the goals of your competency model within the talent management processes. However, as a general rule of thumb, we recommend keeping the model to a maximum of 12 competencies for individual contributors and 15 for leaders.

Leveling competencies

Consider how many levels you want to include in your model. The more levels, the easier it will be to get more nuanced reviews. However, defining every single level will require more effort to ensure that each level is distinctive and clearly defined.

Here are some options you can use for leveling competencies:

3-level framework:

1. Basic
2. Competent
3. Expert

6-level framework:

1. Beginner
2. Developing
3. Competent
4. Proficient
5. Advanced
6. Expert

Step 3: Conduct extensive research

Once you have a rough idea of how the competency model should be structured, you can collect information to guide you when selecting and defining competencies.

Start with internal readily-available information

Even if your human resources team has never worked with competencies before, there will still be a good amount of relevant information you can collect from documents such as: 

• Business plans, strategies, and objectives: Use these to understand your organization's future direction better and anticipate the need for new competencies (e.g., machine learning, large language models, etc.).
• Predictions for the future of your industry or organization: You should account for any significant shifts when designing your framework to ensure relevance
• Organigram: Get an overview of your organization's current structure: departments, hierarchies, etc.
• Key workforce data: Understand your current workforce beyond headcount, including retention and engagement data, manager-to-direct-report ratios, average seniority, etc. 
• Job descriptions: Understand current roles within the organization; look at existing roles, but also roles that your team is currently recruiting for to make your framework more future-proof

Use observation as a data collection tool for this stage. Make notes about the common competencies you notice in top employees and influential leaders in your organization.

You can turn to online research: 

• Collect information online from job advertisements from companies of similar size or similar industry
• Research readily available competency frameworks from various companies 
• Refer to the list of 325 competencies defined by the U.S. Office of Personnel Management (OPM)
• Review our competency model examples section below

Involve internal subject matter experts (SMEs)

HR professionals cannot have in-depth knowledge about every department and project in their organizations. As a result, talking to internal subject matter experts is vital for creating relevant and comprehensive competency frameworks. 

Research methods for collecting SME insights

Select one or more of the following research methods for collecting insights from SMEs. 

Interviews and focus groups: Have one-on-one interviews and focus groups with subject matter experts across departments and ask them about their work, responsibilities, and most needed skills and knowledge.

Executives can provide information on core competencies that reflect the organization's values, philosophy, and strategic goals. 

Managers and high-performers from relevant business departments can highlight the skills, knowledge, and behaviors necessary for success in those roles. 

Surveys and questionnaires: A survey is one of the easiest ways to collect information. Questionnaires also empower you to have more employees give input than an interview, making quantifying this data easier. 

Behavioral Event Interviewing (BEI): Conduct structured interviews to uncover behaviors that distinguish high performers.

Questions to ask your SMEs

Gain clarity on roles and responsibilities

• What are the primary responsibilities and tasks for this role?
• What does a typical day look like for someone in this role?
• How does this role contribute to achieving the organization's strategic goals?

Understand performance key performance indicators (KPIs)

• What metrics or indicators are used to measure success in this particular job?
• How do these KPIs align with the overall goals of the organization?
• Can you provide examples of exceptional performance in this role?
• What specific actions or behaviors contributed to this high level of performance?

Identify the skills and knowledge that make employees successful in their roles

• What technical skills are essential for this role?
• Are there any specific tools or technologies in which individuals in this role must be proficient?
• What soft skills (e.g., communication, teamwork, problem-solving) are critical for success in this role?
• Can you explain how these soft skills are applied in daily work?

Identify behavioral competencies

• What behaviors distinguish high performers in this role from average performers?
• How vital are attributes like initiative, adaptability, and attention to detail?

Understand future trends that could shape the must-have competencies

• How will this role evolve in the next 3-5 years?
• What emerging skills or knowledge areas will become important?

Step 4: Compile and organize your research data

You will collect extensive information while researching, so the more structured you are, the more accessible and usable this data will be for the next steps. 

Set up a digital folder structure to store all collected information. Use cloud-based tools like Google Drive, SharePoint, or dedicated HR software.

For each category, create summary documents that distill the main points. Use bullet points, tables, and charts to make the information easily digestible.

Once you start compiling your data, break down the information into key categories such as technical skills, soft skills, behavioral competencies, and industry trends.

Shortlist the most crucial core competencies

Highlight any recurring themes or critical competencies that appear across multiple sources.

Rank competencies based on their importance and frequency of mention across sources. Use a scoring system or a priority matrix to help with ranking.

For example, if most top performers acknowledge having "emotional intelligence," you can mark it as a core competency for your organization.

Define role-specific competencies

Define the role-specific competencies for the various departments, teams, and roles.

Identify the most relevant role-specific competencies by consolidating information from job descriptions, SME interviews, and performance data.

A more straightforward way to approach this task is to start with job descriptions for each role and map competencies to tasks. However, you must ensure they are updated and reflect current roles.

You can use our competency mapping template for the task.

Create definitions for each competency 

Once you have identified all relevant competencies for your organization, it’s time to develop competency definitions. Ensure that each competency definition includes specific, measurable components. 

For example, you can define written communication as “the ability to convey ideas, information, and messages effectively through written language. It includes clarity, coherence, conciseness, and correctness in written documents, emails, reports, and other forms of written communication.”

Identify the behaviors and actions that showcase competency mastery

Finally, identify specific behaviors and actions that demonstrate each competency in practice. Define different levels of mastery for each competency to differentiate between novice, intermediate, and expert levels. 

Clearly outline the behaviors and skills associated with each level to provide clarity to employees and evaluators.

For example, a basic mastery of written communication would imply writing simple and clear messages with basic grammar and spelling accuracy. In contrast, an expert would set standards for written communication across the organization, ensure consistency and quality in all written materials, and develop guidelines for effective written communication practices.

This final step ensures reviewers have clear benchmarks and objective and measurable evaluation criteria.

Step 5: Compile competency profiles in your draft competency model

Use a template to ensure consistency across profiles. Include sections for primary responsibilities, technical skills, soft skills, and behavioral competencies.

Ensure quality with this checklist

Follow this checklist when defining your final list of competencies for each profile:

• Relevant: Competencies directly relate to the tasks and behaviors for specific jobs
• Objective: Competencies include observable behaviors, and their descriptions are clear and actionable
• Measurable: You can measure and evaluate competencies according to a standardized scale (proficiency levels)
• Manageable: The number of competencies does not surpass 15 per role
• Differentiated: Competencies are sufficiently distinguished from one another to minimize overlap and confusion
• Trainable: Competencies can be trained, developed, and applied in day-to-day work

Use a competency matrix

Use a competency matrix model to map out the required competencies against different job roles within your organization.

You can visually display which competencies are necessary for each role and the proficiency levels required.

Step 6: Define your implementation plan

Develop an implementation plan that outlines the steps for rolling out the competency framework, including training for managers and employees.

Include a timeline, responsible parties, and specific actions for each step.

Phase 1: Training and communication

Employees and managers may resist adopting a new competency model because they are comfortable with existing processes or fear increased scrutiny. Prevent and address resistance with change management strategies. 

Develop comprehensive communication and training sessions to educate all stakeholders about the competency model. 

To reach everyone, use multiple communication channels, such as emails, intranet posts, town hall meetings, and team briefings. 

Ensure managers understand how to use the model in performance evaluations, development planning, workforce planning, and other relevant HR processes.

Offer resources such as guides, FAQs, and example scenarios to help employees and managers understand the new system. Develop a checklist or toolkit for managers to use during performance reviews and development planning.

Ensure all employees know the competency framework, its purpose, and how it will be used. Use microlessons and quizzes to ensure everyone understands the new process. 

Phase 2: Pilot rollout

Select a few departments for initial implementation. Standardize processes and provide clear guidelines to ensure consistent application across all departments. 

Establish a system for collecting feedback from managers and employees about the competency framework.

Collect feedback on the pilot rollout process:

• Start by reminding the participants about the primary goal behind creating the model
• Involve team members from different demographics, genders, experiences, and career levels in the review process
• Evaluate whether any key competency needs adding or removing
• Ensure that managers and employees share the same understanding of competencies and the purpose of the model

Phase 3: Implement changes based on pilot feedback

Based on the feedback received by all the stakeholders, make the necessary changes. For example: 

• Add missing competencies
• Remove anything marked as redundant
• If suitable, edit the competency definitions and names to enhance clarity and consistency across the entire organization

Phase 4: Full rollout

It’s time to implement your competency framework organization-wide. 

Be ready to answer questions and offer additional guidance for those struggling to adjust to the new system. Make sure your internal HR policies reference the new competency model.

Your system's rollout is not a race. Take the time to ensure clarity at each step for managers and employees. 

According to our internal research, building a comprehensive competency framework can take up to 16 months. 

Use Deel Engage to shorten your process. Our learning scientists already did the research for you with comprehensive templates and manager workshops.

Step 7: Develop a review mechanism to keep the model updated and relevant

The rapidly changing business environment can quickly render competency models obsolete. Be prepared to adjust the framework based on feedback and changing organizational needs.

Regularly review and update the competency model to ensure it remains relevant. Use surveys, focus groups, and one-on-one meetings to gather feedback and identify areas for improvement. Involve business leaders in ongoing assessment and refinement to align with evolving business strategies and industry trends.

Competency model examples

One of the most important aspects of creating a competency model is finding examples of how different organizations use it. 

Checking complete frameworks will help you better understand how to structure your competency model, how many competencies to include, how to define them, etc. 

Here are ten examples of competency models and resources that you can use as inspiration:

1. World Health Organization (WHO) - Global competency model
2. The Organization for Economic Co-operation and Development (OECD) - Competency framework
3. IBM -The Data Science Skills Competency Model
4. The Conference Board - Competency model for Diversity and Inclusion practitioners
5. Illinois Institute of Technology - Information Technology competency model
6. UNESCO - Competency framework: core and managerial competencies
7. The International Atomic Energy Agency (IAEA) - Competency framework for managers and staff
8. University of Pennsylvania - Competencies framework for performance appraisals
9. IBM Commerce - IT Job Skills and Competencies Framework

Deel Engage: Your one-stop-shop for everything competency

Implementing a well-designed competency model is crucial for fostering a skilled workforce and achieving long-term organizational success.

However, developing competency models, especially a comprehensive company-wide model, can take up to 16 months.

Deel Engage will help you establish clear expectations and a path forward for everyone in your organization using competency models and career frameworks. You will get:

• Competency-based career progression frameworks: Showing everyone what they need to get to the next level, individual contributors and leaders alike
• Competency-based performance assessments: Measure performance on a competency level to identify skill gaps and growth opportunities
• Competency-based training: Deel Engage provides hundreds of learning resources with competency tags, so your workers will find the right training materials for their roles and needs to add to their development plan
• AI assistant: Fast track competency framework creation

Talk to our experts about creating a custom competency model for your organization.