Why Does Job Architecture Matter?

Job architecture is a critical business tool. Cataloging each position in your company and defining organizational levels provides useful business intelligence and facilitates financial reporting. However, a well-designed job architecture does much more. It supports critical human resource (HR) programs that attract and retain employees, and it underpins equitable, transparent pay.

Often, the creation of job architecture is driven by the implementation of a new human resource information system (HRIS) (e.g., Workday). These systems require multiple data inputs, including defined positions, organization levels and salary structures. The mistake many organizations make is believing that implementing a new HRIS is simply a matter for IT or for those who configure the systems.

Let Compensation Lead

While IT professionals can manage system installation and configuration, they should not lead the cataloging of your jobs or design their architecture.

“The best outcomes are when the compensation team leads the process,” says Hali Croner, President and CEO of The Croner Company. “Compensation involves HR; HR talks to line managers; together they design the architecture that services the business. IT is your partner for implementation,” she explains.

With the compensation team at the helm, organizations are more likely to develop a job architecture that has stakeholder buy-in, defines job families, aligns titles with organizational levels, outlines career progression and facilitates consistent salary ranges and compensation benchmarking.

Supports Strategic Initiatives

Job architecture underpins many HR and people initiatives beyond compensation, starting with a shared understanding of organizational levels and career progression opportunities. Clearly articulated career pathways support retention and can guide performance management.

A good job architecture also reduces the time and manual work spent on annual processes such as headcount reporting and planning. For example, the consistent position hierarchies provided by a well-developed job architecture enable organizations to identify talent gaps crucial for succession planning. They also help companies assess leader-to-employee ratios and potentially identify over- or underrepresented organizational levels.

In the realm of compensation, a good job architecture allows a company to readily assess competitive standing of pay, perform compensation benchmarking and complete compensation survey submissions. It is an essential building block for key compensation requirements, such as preparing salary and hiring ranges, assessing pay equity and promoting pay transparency.

With the support of an in-place job architecture, your team can focus on strategic efforts.

Identifies Career Paths

Businesses can leverage job architecture to transparently present available roles to employees. Clear, consistent leveling across the organization promotes a shared understanding of possible career paths. Building into the architecture sufficient levels by job function enables managers to discuss opportunities for career progression and also for lateral movement. Transparent career pathing supports employee growth, engagement and ultimately retention.

“A robust job architecture lets employees know what is possible for them – either moving up in the organization or across,” explains Lisa Dyakovski, Senior Consultant, The Croner Company.

“It defines the requirements and the rungs on the ladder. It also illuminates lateral moves employees can make to broaden their skill sets.”

Such specificity is a valuable tool for managers when discussing employee development, especially when accompanied by written career matrices. “With well-defined career matrices that document expectations for the roles at each level, managers can more easily explain the steps an employee needs to take to receive a promotion,” Dyakovski adds.

Facilitates Pay Equity

By classifying employees into a precise job architecture, similarly situated employees are readily identifiable. Then, using separate software or analytical tools, companies can identify outliers in pay after controlling for key factors, including function, geography, education and tenure or years of experience.

Often, prior to developing or updating the job architecture and employee assignments to roles in the architecture, the data about employees and their roles are messy and inconsistent, preventing meaningful pay equity analysis. A clean job architecture with consistent employee mapping enables companies to perform more accurate pay equity analyses by providing visibility into like jobs. Having confidence in the company’s ability to identify employees performing like work through meaningful data from the job architecture, rather than by title alone, ensures that pay equity adjustments can be considered regularly and with confidence.

Keeps Pay Competitive

The job architecture also is a great starting point for another major workstream – market pricing jobs and developing relevant salary ranges for those jobs. The job architecture serves as a catalog for all roles, most of which have an external market benchmark available in compensation surveys. The market rates from these benchmarks inform salary and hiring ranges. They ultimately provide organizations with data and clarity about the competitiveness of their compensation.

A robust job architecture supports consistent salary survey benchmarking methodologies. With consistent organization levels and clear job families in the job architecture, each survey’s levels and families may be systematically aligned with the architecture. This reduces discretion in selecting job matches and potential matching biases.

For example, most surveys – e.g., Croner, Radford, Willis Towers Watson, Mercer, Empsight and IPAS – use defined organization levels and job families. Compensation teams can create level alignment “keys” that show how each survey’s level aligns with the company’s job architecture, then systematically pull data from the applicable job family at the predetermined level to populate market data before determining a final market rate.

Market rates are critical also to informing the development of salary ranges, a major element of the HRIS system and needed today to comply with many pay transparency regulations.

Supports Pay Transparency

What’s more, a job architecture facilitates salary range postings to help companies comply with pay transparency legislation in certain U.S. states. By grouping jobs, a company can reasonably know what to pay for a position, and then readily develop and post a hiring range for that role. As companies embark on “Pay Transparency 2.0” – i.e., communicating more widely about pay programs – the job levels, families and career paths articulated by the job architecture inform many of the discussions.

Compensation Team’s Critical Role

To leverage opportunities for efficiencies, your compensation team must play a major part in the development, implementation and maintenance of the job architecture, supporting all the roles in the business – not just market pricing, salary structures and posted hiring ranges. If you would like assistance convincing your leadership of the benefits of a strong job architecture and thinking about its design, The Croner Company can help.

The Croner Company’s surveys and consulting services are relied upon by organizations at all stages of growth to establish and modify pay practices and align compensation with mission, values and market.

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