From theory to application: Thinking beyond skills in the financial industry workplace
Employers today are increasingly focused on how employees use their skills in real-world situations.
With skills requirements in the investment industry constantly evolving, an understanding of employers’ expectations can improve job candidates’ chances of success.
A key concept to grasp is the difference between how organizations look at underlying skills and how they consider how those skills are applied.
Companies today are increasingly looking to align their skills requirements with their own broader strategic objectives, and employees need to understand how they fit into this picture.
This can be a confusing landscape, since there is very little consistency of terminology to cover what companies mean by applied skills. One traditional concept was that of competency, which was typically taken to mean the combination of a skill and the associated behaviors and knowledge that allowed the successful use of that skill.
Today many practitioners and HR professionals are moving away from using competency as a term, preferring a range of other concepts such as behavior, capability, or proficiency.
Many of these terms are used interchangeably or to mean other things entirely. Proficiency, for example, is frequently also used in a precise way to indicate the level of ability that someone has in relation to a certain skill. While underlying skills will be catalogued in a skills taxonomy, proficiency levels will often be described on a skills framework, which is a further development of a taxonomy.
One reason that certain language varies or falls out of favor over time is that companies are keen to ensure that their approach to skills is as dynamic as possible. That may mean moving away from the kinds of predetermined definitions of how skills are applied that competency has often implied.
“We generally don’t hear many people using the term competency any more, and the reason the world has moved more towards skills and away from competencies is that skills are constantly changing,” said Frances Symes, Senior Manager in the Human Capital practice at Deloitte. “We are moving away from this idea of building a competency model that is supposed to last for years.”
Activating skills
For individual employees or candidates, though, the precise terminology is less important than awareness of the fundamental concept of a package of qualities that enable someone to deploy a skill effectively, a concept that often remains broadly consistent whatever language is used.
The UK’s Financial Services Skills Commission (FSSC), which produces its own Future Skills Framework, is one organization that still does use competency to describe the application of skills, as CEO Claire Tunley explained.
“Within skills, we look at proficiency levels, and then competencies we see as the ability to apply skills. For example, you might be able to code, but can you apply that ability to make a system or process better?”
For those in the marketplace for roles in the sector, it’s important therefore to be aware that possession of a particular skill will only go so far. More important is the ability to be able to demonstrate how you would use or have already used that skill to solve problems, meet client needs, or helped achieve another organizational objective.
“It’s important to be pragmatic – what matters most is not what something is called but clarity over what you mean by it,” said Bhushan Sethi, a consultant who is also Adjunct Professor at NYU Stern School of Business. “How are you defining it? Are you including things like experience?”
A skill might be the ability to analyze data. Capability or competency might be the ability to tell stories about that data to meet a business objective. Experience might be an actual instance of having applied that skill and capability in a financial services environment.
Employers are using the concepts of capability to evaluate their workforce’s skills through performance management, as well as to help guide learning and on-the-job coaching.
“If you as an organization have identified a capability like global acumen, it can encompass understanding of the supply chains of clients, or details of trade and tariffs,” said Sethi. “It gives you a common language to use to give people feedback and it legitimizes evaluating people on the application of their skills.”
From skills to tasks
Another shift that is emerging today in parallel to the preference for skills over roles is a move to break roles down into individual tasks. This move is very complementary to the preference for thinking about skills instead of roles, because companies can match up skills to granular tasks, creating a much more dynamic way of thinking about a workforce.
“Firms are thinking that there are new ways of bundling tasks together and assigning people to them, which is more efficient and allows more movement across different activities,” said Tunley.
The result is that employees may be asked to operate in a very fluid way depending on the skills they bring to a workforce. They may increasingly work across all parts of an organization depending on where the tasks sit that require their skills.
“When you start to consider what that means for job descriptions and employment contracts, it can initially feel like a lot to take in,” said Tunley. “But it makes sense when you think about the efficient deployment of talent that might otherwise be underused.”
Discover how experts in the financial industry are navigating the future of skills, and talent management:
The skills gap challenge: knowing what you have – and what you need
Why skills taxonomies and architectures are critical to navigating the financial industry’s future
What skills will finance workers and organizations need in an uncertain future?
In the age of AI, it’s human skills that employers want
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