In recent years, universities have been developing more robust competency-based classes for students in Science, Technology, Engineering, and Mathematics (STEM). Competency-based education (CBE) is based on outcomes and is student-centred, creating a better learning experience. This paper provides context for competency-based education over a knowledge area (KA), knowledge unit (KU), and learning outcome (LO) mindset. Additionally, we compared the traditional educational approaches and CBE using a software engineering competency list as assessment criteria. This study provides a thorough review, emphasizing the transition toward competency-based approach in software engineering education and training. The five main reasons education institutes turn toward CBE are: Firstly, CBE supports lifelong learning. Second, it fosters an empowered and inclusive learning culture. Thirdly, it provides appropriate teaching and support on a timely and individualized basis. Fourth, it employs instructional ideas that are matched with students' needs and objectives. Finally, CBE places a premium on transparency and sets out explicit expectations. Our findings indicate that competency-based education is the outcome-driven approach in today's engineering education. It encourages students to know what to do upon graduation rather than what they know.