Successful talent management depends on knowing who is doing what in your company. This means you must describe the existing jobs with the true value they bring to your organization, structure them into interdependent groups, and – if possible – match each job with a grade and compensation level.
All this information together constitutes your job architecture. Companies review their job architectures with regularity because it’s not only essential for talent management but for strategic planning in general. But this regularity is being torpedoed more often than not by an increasing number of periods of change. Some like high growth or mergers and acquisitions are foreseeable. Others are not but the need to review your job architecture as a pillar for talent management and strategic planning stays the same.
Here are the seven most common situations when you should skip your rhythm and update your job architecture to maintain your competitiveness.
1. High Growth Leads to the Creation of New Jobs
When a company increases in size, its job architecture usually becomes more complex as many new roles arise. This means new jobs, job families, functions and maybe even grades in case a company expands to new markets or service areas. In the best-case scenario, all the new jobs fit perfectly to the existing job families, making the addition easy with no impact on the compensation structure. However, if there is no existing or only an outdated job architecture, then integrating new jobs will require a lot of work. It will also require quick decision making, with the danger of creating inconsistencies such as adding the new jobs to a job family where they don’t fit well or adding new job families which are defined differently than the existing ones… These likely scenarios will then lead to a lack of overview for the Management and to pay inconsistencies between jobs and job families.
Dealing with growth is therefore a typical situation for reviewing a job architecture to make sure it is scalable to support employee growth. Defining a structure with job families, sub-job families, jobs, and grades that exist today and that will be needed in the future will ensure your ability to keep the conversion capability of your talent management.
2. Ensuring Fair Pay Through Your Pay Structure
Whether due to fair pay legislation or to the desire to act just, compensating employees fairly is a priority for most organizations. A job architecture is one of the best tools to get there. How?
There are different aspects to consider when defining a compensation structure. For example, it is possible to approach each job individually and design a pay structure that is based on an individual salary benchmark. This however will lead to differences in structures and pay levels between jobs within job families.
Another approach would be to define pay by mapping levels to functions that represent the value chain of the organization. However, some job families in a function might have a different market benchmark (e.g., machine learning engineers vs. technical support engineers). So, mapping levels to functions might lead to compensating some jobs under their market benchmark and vice versa.
A job architecture helps you in any of these situations, whatever your specific goals are:
- It provides you with visibility over all your jobs, functions, and levels, enabling strategic decision making about compensation.
- It enables the comparison of pay for comparable jobs, thus identifying disparities in salaries.
- It adds objectivity to decisions about raises and promotions.
The bottom line is, revisiting your job architecture might will not solve all your compensation issues, but it is certainly the place to start to simplify decision making.
3. Providing Employees With Growth Opportunities
Without a well-thought job architecture, it is usually the case that only these levels exist in a company, that have currently filled positions. Let´s take the example of the job family “Marketing”. In our case only 3 levels exist as no one in the company is more senior than the manager and thus no career path above that level is defined. This means that the marketing manager has no notion of how to evolve within his function and reach another level. This can lead to dissatisfaction and the Marketing Manager leaving the company for lack of development options. Indeed, according to a Willis Tower Watson study from 2018, over 70% of “high-retention-risk” employees want to leave because they see no future advancement in the current job. In another study from Career Addict from 2020, four out of five employees report that a lack of progression would influence their decision to leave their jobs.
The job architecture contains jobs and levels – currently occupied and currently not occupied – which can be used to define career paths. For each job family several possible levels should be defined, with clear documentation about the differences and requirements to reach the next level. Potential career paths can also be defined for lateral moves (between functions or job families). The job architecture makes it easy to analyse the requirements (skills, competencies, experience…) of a job, comparing them with the ones of other jobs (in the same job family or in a different one) and understanding what it takes to make a move. This will be helpful in providing motivating career paths for employees and opportunity to grow as well as promoting more internal talent mobility, ultimately leading to more engagement, retention, and development.
Even compensation paths can be defined in a job architecture. Having a consolidated levelling scheme will remove the “compensation” barrier to internal talent mobility and will encourage employees to remain in the company.
4. New Technologies Lead To Drastically New Types of Jobs
This argument is rather new but a non-negligeable one. The exponential evolution of technology is leading to new ways of working, new products and services, thus new jobs and skills needed. These of course must be integrated into the organizational design of a company. The difficulty is that the new jobs are skills are mostly different than traditional jobs. How so?
- They change more quickly as they include the use of new, developing technologies and therefore must be reviewed more frequently. Their descriptions might also be structured differently (e.g., higher focus on competencies, qualifications, tools…).
- Their organizational structure is often defined by flatter hierarchies and structures.
- The career paths are usually different. For example, in technology related roles, there are often for “dual career paths” where employees can climb up the career ladder without necessarily accumulating responsibility for staff.
For organizations working with new technologies, it is therefore essential to structure traditional and new jobs each with their own specifications but all together in the same structure.
5. Maintaining Competitive Pay Levels
A major use of job architectures are external salary benchmarks to make sure that salaries are competitive enough to attract the right talent. The salary benchmarks are usually performed using purchased market data. This however only makes sense if the existing job architecture (job, job families, grades) is comparable to market standards. But the market standards change. If a job architecture was defined a decade ago but never updated to reflect changes in the environment, then compensation will start differing from the market at some point and the company will lose competitiveness.
6. Implementing a New HRIS
Implementing an HRIS (Human Resources Information System) can be a chance for greatly improving Human Capital Management practices. That is however highly dependent on the quality of job data:
- Are job profiles accurate, actual, and consolidated?
- Are grades well-defined, consolidated, and mapped to the positions?
- Does the job data model fit the system’s structure and data fields?
Any HRIS-implementation begins with the supplier asking for your job architecture to be brought into the new software. Not having high-quality job data ready will lead to a delay in the implementation project. It’s not so much about data conversion and migration into a format that can be exported to the system. It’s more about bringing unstructured data into a system where it can’t be structured any more. No one will realize until major problems arise. No one will realize why certain practices don’t seem to work. The better solution would be to build or update a job architecture before implementing a new HRIS.
7. Dealing With a Large Merger or Acquisition
Two of the main reasons for mergers and acquisitions not meeting their objectives are neglected HR challenges and failure to manage changes in the organizational structure. You can quickly spot the challenges that occur when merging the organizational structures of two different companies:
- SAME TASKS, DIFFERENT JOB TITLES: Adds up the jobs of one company to the other without consolidating the job titles or descriptions, leading to duplicated jobs in the job catalog.
- DIFFERENT TASKS, SAME JOB TITLES: Makes comparability of jobs and grading difficult.
- DIFFERENT GRADING framework and scales: Leads to disparities in compensation and career progression.
- HIGH VOLUME of job data to analyse, define, consolidate, and assign to the employees: Results in high manual effort and increased risk of errors.
Consolidating the job architectures therefore plays a decisive role in identifying synergy potential of an M&A deal, by enabling comparison of jobs, fair compensation, lower turnover, and cost efficiencies.
Job architectures compete with individual solutions that can better solve specific problems. But none of these solutions can solve such a large number of problems simultaneously and to such a high degree. A healthy job architecture will not solve all your problems, but it’s the absolute right place to start to improve all your HR practices and for HR to directly contribute to strategic problem solving. Have a look at The Ultimate Guide to Job Architecture Design” to learn more details about how to get started.