Running your people programs without job architecture can be like building a house without a blueprint. A well-defined job architecture helps companies go from startup to scaleup by aligning talent strategies with business objectives.
Here's why you need job architecture and the risks you face without it.
What is job architecture?
A company's job architecture acts as the blueprint – it brings clarity to roles and how they fit into the overall organizational structure. Job architecture often helps define reporting structures, role progression, job responsibilities, and competencies.
“At its most basic, job architecture is a summary of all the roles that exist in your organization,” shares Katie Aldred, Consulting Partnerships Lead at Pave.
Why is job architecture essential for growing organizations?
Job architecture helps teams plan for the future by establishing job hierarchies, defining career paths, and clarifying job functions. Organizations rely on job architecture to navigate the ins and outs of recruitment, performance management, and compensation planning.
Without the right groundwork in place, HR and compensation teams may struggle to pay employees equitably, define career paths, and scale comp structures – ultimately hindering company growth.
"The earlier you set your job architecture, the better. You don’t have to go the whole gambit and create a ton of jobs and ladders, but setting the foundation helps relieve stress later on.”
– Kaylyn Reid
Head of Total Rewards and Analytics at GoFundMe
3 consequences of ignoring job architecture
1. Pay inequity
Without a job architecture framework, companies can create pay equity issues.
“If you don’t have an understanding of what people are doing, you don’t have a basis for comparison if two people are doing the same job,” says Katie.
This leads to pay disparity, creates distrust in compensation practices, and affects employee morale. Pay inequity is an issue across the board, but it impacts women more than men. Women only earn 84 cents on the dollar compared to men and are often “paid less than men, even within the same job,” shares Dr. Paula England, Professor of Sociology and Dean at New York University Abu Dhabi.
Job architecture may not completely solve the gender pay gap, but it does enable teams to define roles, which can help create more equitable and fair pay structures.
Looking for help determining your salary ranges? Check out our latest guide.
2. Unclear career paths
Without job architecture and clear career paths “you’re doing your talent strategy a disservice,” says Katie.
Job architecture provides a framework for career progression by outlining job responsibilities, levels, and tracks. Without well-defined jobs, you can’t communicate potential career paths to employees. As Katie shares, “If you don’t know the ascending or lateral career options, you can’t tell people about them.”
The inability to communicate potential career moves to employees has a massive impact on motivation and retention. 63% of respondents in a Pew Research Survey cited lack of opportunity for advancement as a reason for leaving their jobs.
Employees will seek work elsewhere if they aren’t continuing to learn and grow in their current roles, and turnover can be costly for the business.
Losing employees due to lack of clarity on career progression not only affects team morale, it also affects your bottom line. Sourcing and hiring new candidates is much more expensive than retaining existing ones. According to SHRM, many employers estimate the total cost of hiring a new employee to be 3-4x the position’s salary.
“You can either go out and buy your talent or grow it from within,” says Katie.
Job architecture enables you to articulate lateral and forward career path options, and establishing clear career paths is good for employees and business.
3. Ineffective compensation strategy
Job architecture can be the foundation for your compensation structure. You can align your job architecture to your cash, bonuses, and equity frameworks.
“If you don’t have job architecture in place, you’re creating more work for yourself because you don’t have that foundation to tie everything to,” shares Katie.
In its early stages, a company may set salaries and titles on an ad-hoc basis. While this can work initially, it won’t be feasible as the company scales and needs a more structured role and compensation strategy.
Creating a job architecture foundation from the beginning will enable you to grow more quickly as you gear up to hire 10, 20, 30, or more employees. “As you scale, you can slot people into their compensation ranges easily,” says Katie.
A job architecture roadmap better prepares you for the future.
Set your business up for success with job architecture
Job architecture is fundamental to building a team of high performers and helps your business get from point A to point B. With job architecture, you can pay equitably, and create meaningful career paths and compensation strategies. So, as you’re thinking about organizational structure, remember: the best-designed house needs a clear blueprint.
Once you have a clear job architecture to support your compensation strategy, Pave can help you handle the rest. Request a demo to access market data for job families, manage bands, and bring your comp philosophy to life.
Learn more about Pave’s end-to-end compensation platform
