5 signs your job architecture could be due for a rebuild (and why you might want to)

5 signs your job architecture could be due for a rebuild

Posted by Gregory Stoskopf
and Lynda Phenix on August 12, 2015.

It’s not uncommon for the underlying infrastructure of an organization’s jobs—what we call job architecture; also referred to as job structure, catalogue, or leveling—to become outdated and weak.

Growth is a common culprit, particularly through M&A activity. Organizations might adopt the job titles of merged or acquired employees without harmonizing them into a master set of job titles and leveling jobs across the organization. The danger is that a “senior manager” in one organization may have had different responsibilities and a different place in the organizational hierarchy than a senior manager in another organization. It could also be that one organization’s senior manager performs duties akin to an operations manager in another, but the two are considered to be at different levels and compensated differently.

Another common scenario is that an organization may have simply created titles for individuals or jobs as it grew, without first creating or following a set architecture. Over time the organization itself may have been redesigned as it matured, but the job architecture didn’t keep up.

When job titles and classifications proliferate without a clear understanding of the responsibilities associated with the job, the value of the job, or its place in the organization, accurate HR planning and reporting becomes next to impossible.

Problems with job architecture often surface when organizations embark on an HR technology implementation or when compensation programs are redesigned. Human Resource Information Systems (HRIS) can only be as accurate as the data in them. If HRIS data do not reflect the current organizational design and accurate job titling/classification, there is a risk that data will not be accurate in areas such as workforce planning, compensation analysis (thus having jobs with different titles doing the same thing, but being paid differently), and succession planning, to name a few.

Additionally, outdated job progression lessens the effectiveness of key talent programs such as recruiting, learning and development, and performance management. With multiple titles for the same job, it’s hard for employees to understand how jobs and careers progress, and hard for organizations to effectively entice and recruit people, prepare them to advance in their careers, or manage their progression.

For example, an organization could have finance-related employees across several departments or business units, perhaps referred to as Financial Analysts, Financial Specialists, and Business Analysts. All may be doing the same thing, but might not be paid the same. This could have resulted from M&A activity or simply, and probably more commonly, a lack of a centralized job/position management process.

Better practice is to have a consistent job architecture and one set of standards. So, in this example, all of these titles might be consolidated into Financial Analyst, with a career path consisting of Associate Financial Analyst, Financial Analyst, Senior Financial Analyst, Manager Finance, Director Finance, VP Finance, CFO.

Job architecture needs vary by organization size and industry, but here are five general signs your organization may be ready for a job architecture rebuild:

  • More than 50 percent of employees are classified in “single incumbent” jobs, meaning they have unique job titles, though much of the work they do is the same. For example, individuals may be uniquely classified as Accounting Analyst, Accounting Specialist, Operations Accountant, Accounting Adviser, and Project Accountant, even though they perform very similar roles.
  • Compensation programs show signs of pay disparity—same work, different titles, different compensation.
  • Managers frequently exert pressure to “regrade” jobs to enable promotions for their staff, which can create unnecessary job titles and add stress to compensation budgets.
  • Employees lack understanding about how careers progress in the organization.
  • Job titles have lost their meaning and provide no clear guidance on promotional opportunities—e.g., What is the difference between a VP and a Director?

A general rule of thumb for job title consolidation is to have the total number of titles equal 10 percent of your employee population; so 100 titles for 1,000 employees, 250 titles for 2,500 employees, and so on. Again, this will vary by industry.

Organizations are often hesitant to embark on a job architecture rebuild — it can be time- and labor-intensive. But there are ways to scale and manage the effort to suit the organization’s needs and goals. And the benefits typically outweigh the costs. You can read more about the process in our new publication, Job architecture: Laying the building blocks of effective Human Capital Management

Gregory Stoskopf is a director in the Human Capital/Talent Performance and Rewards practice of Deloitte Consulting LLP, with a focus on broad-based compensation, performance management, and talent management consulting. He is a frequent speaker and author on compensation and talent topics within the HR profession.
Lynda Phenix is a specialist master in the Human Capital/Actuarial, Risk and Advanced Analytics practice of Deloitte Consulting LLP, with a focus on broad-based compensation, performance management, and general human resources consulting. She specializes in job architecture in support of projects in pay program redesign, mergers and acquisitions, technology adoption, and organization design.

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