The terms "skills" and "competencies" are often used interchangeably, but they are not necessarily synonymous. Competencies may refer to sets of skills, but "competency" is more of an umbrella term that also includes behaviours and knowledge, whereas skills are specific learnt activities that may be part of a broader context. By looking at several examples of both competencies and skills, the difference may become clearer.

Problem solving is a competency that requires several skills, knowledge and behaviours to be performed well. For example, to solve problems effectively one must have the skill to define the problem, have knowledge of all possible solutions, and exhibit behaviour that enables him or her to make a decision.

Event planning is a skill that can be taught to anyone with the ability to learn it. Several steps may be considered when planning an event, and different tasks must be completed for different kinds of events. All of these things are hard skills, but may be part of an overall competency like leadership or problem solving.

Many people refer to their strong communication skills, but communication is really a competency that relies on a combination of certain skills, behaviour and knowledge. To communicate effectively, for example, a person may need to understand cultural diversity, have advanced language skills, and behave with patience.

Through reading books, taking classes and practicing, it is possible to learn how to give effective presentations. Presentation skills are more easily absorbed by some people than by others, but a presentation is still a task one can learn how to perform. Presentation skills may be part of a larger competency such as communication.