Competency based training has been around since World War II, when the US military developed it to train defence personnel. Its main difference from more traditional forms of education was that it put the emphasis on what a person could do as a result of the training (that is, the output), rather than on how the training was delivered or how long it took (in other words, the input).

In Australia, competency based training has been widely used over the last couple of decades to train and assess people in workplace skills. It now forms the basis of virtually all accredited training in vocational skills.

Under this system, when a person is assessed as 'competent' in a particular competency, they are recognised as being able to perform a task to the standard that the industry believes is acceptable.

In some cases, a person may have already acquired the ability to do the job properly through past experience or previous studies. In these instances, their existing skills are able to be acknowledged through a process called Recognition of prior learning (RPL). This is a fundamental aspect of competency based training, and it helps to ensure that the training a person receives is focussed on the gaps in their skills or knowledge, rather than on things that they already know.