Factor analysis is used to identify observed variables like behaviors or competencies that can explain or show correlations with other observed variables.

Factor analysis could be a valuable tool in determining if employee competencies and behaviors have correlations with others that could be considered a "factor." This could be useful in determining employee fit for a specific role or job. For example, Suppose it was determined that skill, like math ability, was correlated with other competencies, like spatial arrangement. In that case, we may determine that individuals with high math scores may be well-suited to an air-traffic control role. Why is this important?