Many of the world’s most successful companies have a clear focus on their core competencies. These are activities that deliver unique value to customers and create brand loyalty.
Examples of core competencies include producing the highest quality products, offering outstanding customer service, or providing innovative technology. Core competencies also provide access to a variety of markets and industries.
In business, focusing on core competencies is essential to success. It allows companies to differentiate and attract customers by focusing on what makes them unique in their industry or market. It also helps them avoid unnecessary expenses.
However, businesses must be careful in identifying their core competencies. According to the strategy pioneers, something can be a core competency only if it is valuable, rare, and difficult to imitate by competitors.
One way to identify your company’s core competencies is to survey your customers and employees. Ask them what you do well and compare the answers to what your competitors do well. The overlap between your responses and your competition can help narrow your core competencies.
In addition, the benefits of partnering with a PEO can help you find more hours to focus on your core business activities by taking care of the administrative tasks that keep your doors open. A PEO has teams of professionals who are experts in HR compliance, payroll, benefits, risk management, and safety, worker’s compensation, and more. A PEO’s bulk purchasing power also helps them pass savings on to their clients.
Attract and Retain Top Talent
In a tight labor market, top talent is attracted to companies that can provide meaningful work and align with their own larger purpose. Money may be a part of that equation, but research shows that employees are more interested in jobs where they feel like they are contributing to something bigger than themselves.
Your core competencies make your company unique and set it apart from competitors. They should be a source of competitive advantage, significantly contribute to perceived customer benefits, and have applications in various markets.
Identifying your core competencies requires looking at both your hard and soft skills. Your hard skills include your industry-specific knowledge and expertise, while your soft skills include your ability to communicate, build relationships, and make decisions.
In a business environment where it is challenging to attract and retain top talent, hiring a PEO can help. A reputable PEO can handle various recruiting tasks, including placing job ads, conducting background checks, and interviewing candidates. They can also ensure that your company adheres to best practices and applicable employment laws when enrolling new hires.
In a business, focusing on activities that increase revenue is essential. Yet, many business owners need help with administrative tasks that take time away from revenue-generating activities. Partnering with a PEO frees business owners to concentrate on the aspects of their company that drive growth and profitability.
The idea of core competencies has roots in management theory influenced by the work of, who defined them as “harmonized combinations of resources and skills that distinguish a firm in the marketplace.” These are not physical assets that can be easily replicated or replaced; instead, they represent “business processes that combine the talents of employees throughout the organization to produce products and services at a lower cost and better quality than competitors.”
An excellent way to identify your company’s core competencies is to survey customers about what sets you apart. For example, an airline remains competitive in the airline industry mainly due to its low operational costs and outstanding customer service. Similarly, it can maintain an edge in the retail sector despite competing with massive department stores through its exceptional branding and marketing efforts.
Increased Customer Satisfaction
Identifying a business’s core competencies can help the company stand out and become more appealing to customers. For example, a restaurant’s core competency might be its ability to provide excellent customer service. This unique ability could make a massive difference in keeping existing customers and attracting new ones.
Another way to identify a company’s core competencies is to ask its employees what they think the business does exceptionally well. For example, employees might say that the restaurant serves delicious meals. This insight can give the restaurant clues as to which products or services should be prioritized over others.
The same approach can be used for individuals who are looking for jobs. To help them stand out, job seekers should pinpoint their core competencies and use them to find employment that will make them happy. Knowing their core competencies can help businesses improve onboarding and training programs and offer the health, wellness, and financial benefits their employees value. That, in turn, can increase employee satisfaction and retention.
Increased Employee Engagement
Core competencies are what set businesses apart from their competition. They are a unique advantage that enables a company to deliver unmatched value to customers and are hard for competitors to imitate or replicate. Examples of core competencies include:
- Continual innovation (e.g., QuickBooks’ ongoing software enhancements).
- Offering products or services at a lower price point than competitors.
- Providing a superior experience for customers.
Another type of core competency is internal employee engagement, which allows employees to see how their work contributes to the company’s goals and vision. This helps employees feel connected to the mission of their job and is an essential factor in reducing employee turnover rates.
A PEO can help improve employee engagement by eliminating tedious, time-consuming tasks that detract from employees’ ability to focus on core duties. PEOs also offer a variety of resources that can be used to recruit, hire, and train new employees and support best hiring practices. A recent study found that employees of PEO clients were 8 points more likely to be highly engaged than those who did not work for a PEO client.