COSO Principle 4: The entity demonstrates a commitment to attract, develop, and retain competent individuals

COSO Principle 4 sits in the “Control Environment” domain of SOC 2’s common criteria and is routinely underestimated because it reads like HR language. In an audit, it behaves like a control reliability requirement: if the people who design, operate, and monitor controls are not qualified and supported, the rest of your control environment becomes fragile.

Operationalizing this requirement means you treat workforce competence as an auditable system. You will document the competence expectations for roles that impact your SOC 2 scope (engineering, SRE/IT, security, support, finance ops, HR, and any control owners), then implement hiring and onboarding gates, targeted training, and retention practices that reduce single points of failure. You also need evidence that these activities occurred during the audit period, not just a statement that they exist.

This page gives you requirement-level implementation guidance you can put into motion quickly: a practical build list, artifacts to retain, audit questions to expect, and a 30/60/90-day plan sized for real compliance teams.

Regulatory text

Requirement (SOC 2 Trust Services Criteria, CC1.4 / COSO Principle 4): “The entity demonstrates a commitment to attract, develop, and retain competent individuals.” ¹

What the operator must do

You must be able to show, with evidence, that your organization:

1. Attracts competent individuals for in-scope roles (role definitions, hiring standards, screening, and selection practices).
2. Develops them (onboarding, ongoing training, role-specific enablement, and competence measurement).
3. Retains them (performance management, succession coverage, and practices that reduce control failure due to turnover or skill gaps).

For SOC 2 purposes, auditors typically interpret “competent individuals” as the people who design, implement, execute, and monitor controls that support the Trust Services Criteria. The test is practical: can those people perform consistently, and can you prove it. ¹

Plain-English interpretation

“Competence” is the organization’s ability to staff control-relevant work with people who have the right skills, training, and oversight, and to keep that capability stable over time. For a CCO or GRC lead, the fastest path is to treat it like a lifecycle control:

• Before hire: define expectations, evaluate against them, document outcomes.
• Start of employment: ensure onboarding covers security, policies, and role expectations.
• During employment: deliver recurring training and verify completion; coach and correct performance issues.
• When people leave or change roles: maintain continuity for control owners and reduce single points of failure.

Who it applies to (entity and operational context)

This applies to service organizations undergoing a SOC 2 engagement. ¹ Practically, it applies wherever people actions can create or reduce risk in the SOC 2 scope:

In-scope populations (typical)

• Control owners for security/privacy/availability processing controls (policy owners, access review owners, incident response coordinator).
• Engineering / DevOps / IT staff who administer systems, deploy changes, and manage access.
• Security staff who manage vulnerability management, monitoring, and incident response.
• Support / Customer operations staff with privileged tools or customer data access.
• HR / People Ops for joiner-mover-leaver processes and background screening workflows (as applicable to your system and policy scope).

Operational contexts where auditors probe hardest

• High privilege access (admins, cloud owners, database admins).
• High change velocity environments (continuous deployment, infrastructure-as-code).
• Lean teams with key-person dependencies (one person runs access reviews, one person owns incident response).
• Material use of contractors or third parties performing operational work.

What you actually need to do (step-by-step)

Step 1: Define “competent” for each SOC 2-relevant role

Create a Role Competency Matrix that ties roles to:

• Required skills/certifications (if any), experience bands, and tools.
• Required policy training and security training.
• Controls the role performs or supports (example: access provisioning, logging review, incident response).

Keep it practical. Auditors want to see that the definition exists and is used consistently, not that it is academically perfect.

Deliverable: Role Competency Matrix (by role, owner, last updated date).

Step 2: Standardize hiring and internal transfers for in-scope roles

Implement a minimum hiring package for in-scope roles:

• Job description with competency requirements.
• Interview plan mapped to the competency requirements (technical + behavioral + security awareness where relevant).
• Hiring decision record (scorecard or structured notes).
• For internal transfers: confirmation the person meets the competency requirements or has a documented development plan.

Control intent: you can show you “attract” competence rather than inheriting it by accident.

Step 3: Build onboarding as an auditable checklist with role-based branches

Create an onboarding workflow that includes:

• Security and acceptable use policy acknowledgment.
• Secure development training for engineers (if applicable to scope).
• Access provisioning approvals tied to role (joiner process).
• Role-specific enablement: runbooks, escalation paths, incident response overview, change process training.

Make onboarding evidence easy: HRIS checklist export, ticketing workflow, or a simple signed onboarding tracker.

Step 4: Run ongoing training with completion evidence and exceptions

Define a training set aligned to your risks and controls. Common categories:

• Security awareness and phishing/handling guidance (content can vary, but track completion).
• Incident response responsibilities for on-call staff and coordinators.
• Access control and data handling for privileged and customer-facing teams.
• Change management and SDLC expectations for engineers.

Then implement:

• Training assignment logic (who must take what).
• Due dates.
• Exception handling (extensions, leave of absence).
• Escalation path for non-completion.

Audit reality: completion evidence beats a training policy every time.

Step 5: Prove competence is maintained (performance management + corrective action)

Auditors often ask, “How do you know training works?” You do not need a complex measurement program, but you do need a mechanism to identify and address competence gaps:

• Performance reviews that include role expectations (even lightweight).
• Documented coaching/corrective action for repeated control failures (example: repeated missed access review deadlines).
• Targeted retraining after material incidents or repeated errors.

Step 6: Add retention and continuity controls for key roles

This is where SOC 2 teams commonly get tripped up. “Retain” does not require you to guarantee low turnover; it requires you to manage the risk turnover creates:

• Named backups for critical control owners.
• Runbooks and SOPs stored in a controlled repository.
• Cross-training for at least one alternate for critical processes (incident response lead, access review owner, change approver).
• Offboarding that includes access removal and knowledge transfer where feasible.

Step 7: Document control design and retain operating evidence

Turn the above into a control narrative that an auditor can test:

• Control objective (competent workforce supports reliable control operation).
• Control owner(s).
• Frequency (ongoing; training recurring; hiring/onboarding per event).
• Evidence sources and retention location.

This aligns with the recommended practice to document control design and keep operating evidence for CC1.4. ¹

Required evidence and artifacts to retain

Use this as your audit evidence checklist:

Governance and design

• Role Competency Matrix (current and prior version if updated during period)
• Training policy/standard (who, what, when, how tracked)
• Onboarding checklist/workflow definition
• Control narrative for workforce competence (CC1.4 mapping)

Operating evidence (sampled by auditors)

• Job descriptions for sampled hires in scope
• Interview scorecards or structured hiring notes for sampled hires
• Background screening completion evidence (only if in your program scope and performed)
• Onboarding checklist completion for sampled employees
• Training completion reports (LMS exports), including exception logs
• Performance review completion tracker (or equivalent)
• Evidence of cross-training/backups (on-call rotation lists, backup assignments)
• Runbooks/SOP repository index + last updated metadata
• Offboarding tickets showing access removal for sampled departures (ties to joiner-mover-leaver)

Common exam/audit questions and hangups

Questions you should be ready for

• “How do you define competence for roles that operate controls?”
• “Show evidence that new hires were screened and onboarded for security expectations.”
• “Which trainings are mandatory, and how do you enforce completion?”
• “Who is the backup for your access review owner / incident response coordinator?”
• “How do you handle contractors who perform operational work?”

Frequent hangups

• HR owns the process, but Security/GRC can’t produce evidence. Fix with a shared evidence folder and a simple evidence request cadence.
• Training exists but isn’t role-based. High-privilege roles should have additional training expectations.
• Over-reliance on one person. If one engineer is the only person who can execute a control, auditors will question sustainability.

Frequent implementation mistakes and how to avoid them

Mistake	Why it fails in SOC 2	Fix
“We have a training policy” with no completion evidence	Auditors test operation, not intent	Use LMS exports or attestations; keep completion logs per period
Competence defined only for security team	Control operation spans IT, engineering, support	Build a role matrix covering all control-operating roles
No documented backup for key control owners	Turnover creates control gaps	Assign backups, cross-train, document ownership in a RACI
Hiring is unstructured	Hard to prove you “attract” competence	Standard scorecards and role-based interview plans
Contractors ignored	Contractors can introduce the same risk	Include them in onboarding, training, and access governance

Enforcement context and risk implications

No specific public enforcement cases were provided for this requirement in the supplied source catalog. For SOC 2, the practical risk is audit qualification or control exceptions when an auditor cannot verify that critical controls are operated by competent staff, or when turnover/training gaps correlate with missed control activities. ¹

Operationally, weak competence and retention practices increase the likelihood of:

• Misconfigured access and delayed deprovisioning
• Missed monitoring and incident response steps
• Change errors due to inadequate SDLC discipline
• Inconsistent evidence production during the audit period

Practical 30/60/90-day execution plan

First 30 days: define and inventory

• Build the SOC 2 in-scope role list and identify control owners.
• Draft the Role Competency Matrix for those roles.
• Inventory training currently assigned, where it’s tracked, and gaps by role.
• Decide evidence systems of record (HRIS, LMS, ticketing, GRC tool, shared drive) and lock retention rules.

Exit criteria: you can name every control-operating role and what competence means for each.

Days 31–60: implement repeatable workflows + evidence capture

• Standardize onboarding checklists with role-based branches.
• Implement mandatory training assignments and tracking (even a spreadsheet is acceptable if controlled and complete).
• Create a backup/coverage register for critical control owners.
• Publish runbook/SOP expectations and a place to store them with change history.

Exit criteria: you can produce evidence for a sampled hire, a sampled training completion, and a control owner backup.

Days 61–90: test operation and close audit gaps

• Run a mini internal audit: pick a sample of employees and prove end-to-end evidence (hire → onboard → trained → role access).
• Validate contractor coverage (onboarding, training, access governance) where in scope.
• Add an exception management process for overdue training and missed onboarding steps.
• Document the CC1.4 control narrative and map artifacts to it.

Exit criteria: an auditor can follow your evidence trail without custom work from HR, IT, or Security.

Where Daydream fits (without adding process debt)

If you’re chasing evidence across HRIS, ticketing, and spreadsheets, Daydream can act as the evidence hub: control narratives, evidence requests, and period-based evidence collection for CC1.4 can be organized so you can answer auditor sampling quickly and consistently.

Frequently Asked Questions

Does COSO Principle 4 require specific certifications (CISSP, CISA, etc.)?

No specific certifications are stated in the requirement text; it requires competent individuals. ¹ If you require certifications for certain roles, document that standard and apply it consistently.

Are contractors and temps included?

If they perform in-scope operational work or operate controls, treat them as in-scope for onboarding, training, and competence expectations. ¹ Auditors commonly sample non-employees who have access to production systems or sensitive data.

What’s the minimum evidence set to pass a SOC 2 test for CC1.4?

Keep a role/competency definition, proof of onboarding and training completion, and hiring/selection artifacts for sampled roles. ¹ Add backup/coverage documentation for critical control owners.

Our training is ad hoc (lunch-and-learns). Can that count?

It can, if you can show assignment, attendance/completion, and content relevance to the role’s responsibilities. Auditors need consistent evidence across the period, not informal claims. ¹

How do we handle missed training deadlines?

Track overdue items, document follow-up, and apply escalation consistently (manager reminders, access gating for privileged roles where appropriate). The key is showing the process works and exceptions are managed, not ignored. ¹

We’re small. Do we need formal performance reviews?

The requirement expects you to develop and retain competent people. ¹ If you don’t have formal reviews, implement an alternative: periodic check-ins with documented outcomes tied to role expectations and control responsibilities.

Related compliance topics

• 2025 SEC Marketing Rule Examination Focus Areas
• Access and identity controls
• Access Control (AC)
• Access control and identity discipline
• Access control management

Footnotes

1. AICPA TSC 2017