Competency frameworks


Put simply, a competency framework is a structure designed to codify the skills and knowledge (collectively known as competencies) employees need to perform effectively in their assigned roles within a business.

If that sounds at all arcane or technical, it shouldn’t. A competency framework is something all business can and should consider putting in place. In the insurance sector, within which many of my own company’s clients operate, a growing awareness of the benefits has been reinforced by regulatory requirements that effectively necessitate having at least a basic competency framework in place.

A well thought-out framework that identifies competencies beyond the basic minimum can really set one firm apart from its competitors

The Financial Conduct Authority (FCA)’s Competent Employee rule stipulates that all regulated businesses “must employ personnel with the skills, knowledge and expertise necessary for the discharge of the responsibilities allocated to them.” Demonstrating compliance in this context clearly requires having some kind of structure in place which specifies some minimum level of competencies required of each employee, and which enables their employer to identify and address any skills gaps uncovered.

But competency frameworks can do far more than simply help a business stay compliant. Above and beyond setting out minimum acceptable performance benchmarks, they can also play an important role in helping individual employees, and hence the firms for which they work, to develop, grow and perform at a higher level. Codifying the competencies required of each role (and at each level within the business) can aid recruitment and ensure staff are always assigned to those areas where they have the most to contribute.

A well thought-out framework that identifies competencies beyond the basic minimum can really set one firm apart from its competitors. Identifying various levels of competency within each area of the business can improve staff performance and morale by setting out a clear career path: one that takes full account of the culture, aims and aspirations of the business as a whole.

Typically you will probably want to make a distinction between competencies relating to technical knowledge and skills on the one hand and more general business skills on the other.

In an insurance context, the former would include things like the principles and practice of insurance, relevant legal knowledge, an understanding of insurance products and services, compliance considerations, and so on.

Business competencies would cover areas such as management skills, marketing and communications skills, as well as broader financial and business knowledge. You might also want to identify certain ‘specialist’ competencies that relate to particular role types within the market in which you operate. Again, in an insurance context, this might include areas such as broking, underwriting or claims management.

You might also decide that it makes sense to subdivide each set of competencies into sets required at each of several different levels of seniority and experience – and perhaps also to link these to the various professional qualifications applicable to staff at different levels within your industry (attainment of which you may wish to stipulate as a precondition for career progression).

If you are looking for inspiration, there are a variety of framework templates you could use as a starting point. But unless you build yours explicitly around your own particular business objectives, you will miss out on many of the potential benefits. You need to ask yourself, right at the outset, exactly what you want your framework to achieve.

Is it purely there to ensure your employees have the basic knowledge and skills they need and thus keep on the right side of the regulator? Or do you also perhaps want to use it as part of your appraisals process to determine who deserves promotion or a bonus? Do you see it playing a role in training needs analysis? Or as a tool to assist with profiling new recruits?

Competency frameworks can do a lot more than simply keeping track of minimum standards. Increasingly, we find ourselves working with clients to create bespoke structures that play a central role in keeping entire businesses on track to achieve their organisational objectives: a perfect example of how doing more than the minimum required can pay significant dividends.


About Author

Avatar photo

SEARCHLIGHT INSURANCE TRAINING - Arranging training and consultancy for the Financial Services industry - Setting up and developing a new insurance company - Leading an asset finance company - Non-Executive director Specialties: - A versatile and innovative professional executive with proven track record - Experienced non-executive director - Experienced in takeovers and mergers - Liveryman at the Worshipful Company of Insurers - Chartered Insurer

Leave A Reply