Contemporary job architectures guide managers, compensation and recruiting professionals, and finance and accounting planning and management teams in assigning salaries and wages. However, ongoing evolution will drive changes that yield greater precision, adaptability, and efficiency in managing and upgrading these role-definition and compensation frameworks. Installing job architecture upgrades is core to sustaining the value proposition that compensation and HR teams offer the businesses they support.

Its elements create an infrastructure across an organization to identify jobs of equal value regardless of function, promote equitable pay within a job category, clarify role responsibilities and job requirements, and provide guidance to managers and employees on developing and growing targeted skills. However, the extent to which the job architecture upgrades are fully leveraged across HR and talent processes is often limited by a lack of understanding and formal process integration.

Understanding job architectures

A job architecture is the organization of jobs within an organization, a framework for grouping common skills and job holders in a way that enables a logical ordering and progression of the people and roles that they occupy. That grouping traditionally creates job families, which are commonly function-based (e.g., accounting and finance, engineering, marketing, manufacturing) and provide valuable insights into employee growth and advancement opportunities throughout their careers.

The job architecture includes standardized job title conventions (e.g., administrator, specialist, analyst, manager, director), grades, and market-based pay structures (minimum, target, maximum) used across organizational functions and roles. It houses job descriptions that outline role requirements and responsibilities, and creates a logical capability growth structure that results in career ladders. It further defines organizational levels, such that more skilled (capability range and proficiency levels) and responsible (e.g., managing others, strategies, goals, objectives) roles are placed and compensated at higher levels.

The benefits and value proposition of job architecture upgrades

A well-designed and comprehensive job architecture provides substantial value to managing people and associated labor costs. The value of a structured approach lies in the ease with which the value of work to be performed is determined, as well as in the elegance and trustworthiness of cross-functional comparisons. It supports robust planning and management of costs (salaries, bonuses, benefits, and payroll taxes) ranging from 15% to 50% of an organization’s total revenue.

It enables a simplified review and development of talent strategies for targeted or critical skill groupings via reporting based on job functions, levels, and titles across or within geographies, facilities, and business units. Analyses can be readily generated on talent trends across turnover, productivity, tenure, growth, development activity, deployment, engagement, and related activities and outcomes. It can also support workforce planning through data analysis on current workforce volumes, skills gaps, and projected staffing levels by role and job level.

From an employee perspective, a job architecture offers insights into how their contributions and skills are valued (via pay range placement), the development requirements (in job descriptions), and the pathways for advancement (in career paths and progressions). It provides guidance to employees and external candidates for presenting their professional credentials and skills when applying for jobs while supporting recruiters and hiring managers in reviewing and considering them. It also creates a sense of fairness when a structured, market-based approach is explained and promoted across the enterprise.

Advances in job architecture design and development

Some interesting innovations are emerging in association with job architecture upgrades. They involve a conceptual evolution towards greater specificity in evaluating jobs, changes in the makeup of work beyond traditional professional and functional boundaries, and the growth of AI applications in HR technology. Each case arises from significant shifts in labor market dynamics and what was originally termed the “future of work” (now existing in the “here and now”).

The movement towards skills-based assessment

The emergence of the skills-based HR crusade is powered by labor shortages, concerns about biases in employment decisions, and employer dissatisfaction with recent college hires, which has led to a reexamination of the college degree as a standard job requirement. This focus on skills in hiring, development, and talent management has emerged with the promise of a more precise indicator of a candidate’s and employee's readiness and ability to contribute and perform the required job tasks.

The categorization of job families is shifting away from a functional lens

Related to the skill-based talent management movement is the recognition that critical skills, once mainly limited to certain professions or functions, are now used across job families. Skills related to analytics and statistics, AI applications, project management, collaboration and cross-functional work, and user and customer experience are now required of employees across many business functions. As a result, and enabled by the increasing deployment of talent marketplace and related technologies, skills are expanding across traditional organizational and functional lines.

The growing use of AI

The technological applications of artificial intelligence are growing as fast as the vendor community and companies can create them. AI is being used in HR to assess and capture skills data on employees (from resumes, employee profiles, performance reviews, course completions, and certifications), identify capability overlaps that can identify non-traditional career paths (e.g., financial analyst to data scientist), recommend relevant learning and development (project, assignment, coursework) activities based on career aspirations, and identify mobility opportunities based on skills overlaps. In addition, job architecture upgrades should consider the design of Human-AI workflows and incorporate AI to develop job descriptions, perform equity analyses, identify shifts in market valuation, and design compensation structures.

These trends are gaining substantial steam and, as a result, offer opportunities to upgrade job architecture to increase effectiveness and integration with other HR disciplines and practice areas, including recruiting, career development, workforce planning, and learning and development.
 

Skills-based job architecture upgrades: capabilities and advantages

The push towards using skills (vs. job families or functions) as the basis for classifying jobs and determining their market value is gaining momentum and increased attention from decision-makers. Given that the World Economic Forum estimates that more than one billion workers will need to be reskilled, with 39% of their workers’ core skills needing to change, a finer assessment of which skills require updating is crucial. Deloitte found that 93% of organizations report that moving from a (whole) job-centric structure to a skills-based model is critical for their success.

While only 20% of organizations report being prepared to transform, skills-based organizations achieve significant success. They are 107% more likely to deploy talent effectively, 98% more likely to have a reputation as talent developers, and 97% more likely to retain their highest-performing employees.

The benefits of job architecture upgrades are substantial and include:

• Generates a better understanding of individual strengths and capabilities. Skills can be acquired across multiple years, organizations, jobs, and social, volunteer, and educational experiences, and as such, are often not observed, exercised, or understood in an employee’s current or recent work roles. Skills-based strategies allow individuals to claim (and provide evidence of) skills developed and refined in previous experiences unrelated to their current role or duties. It also provides a more robust way to locate expertise that would otherwise (and is often) hidden and inaccessible to leaders.
• Enables more specific and targeted capability matching. When a job description focuses on the skills and their application required, a more effective and accurate assessment of candidates' and employees' relevance to a set of job requirements can be made. Consider the general requirement of the B.S. degree. Using those results in a series of overly broad and generalized assumptions about an individual's capabilities. And many of those might not even be relevant or differentiating for a top job candidate or performer.
• Creates a deeper and more detailed understanding of skill and talent gaps. Skills-based job architecture upgrades provide a better view of the aggregated skills (and their spread across the organization) and the resulting talent supply, against which internal supply vs. demand assessments can be conducted. It also provides unique insights into where overlaps of common skills occur across job families, enabling potential opportunities to reallocate talent as business needs emerge and change.
• Lessens the dependence on hiring in restricted labor markets. A skills-based approach creates the foundation for a long-awaited opening of doors to greater internal mobility. It supports employees' promotion and advancement aspirations, creates a culture of continuous development, and enables the increased hiring of earlier-career workers (as replacements) at a lower salary/wage level who can subsequently be encultured and developed into the next generation of workers.
• Enhances pay equity. Focusing on skills, associated proficiency levels, and experiences creates more refined and equitable support for pay decisions, as the relative organizational value equivalencies can be better determined. This is particularly important in a world where increasing numbers of young people bypass college due to the costs of attendance, borrowing, and uncertainty about how much an education prepares one for work. This has the potential to support the hiring and retention of historically underpaid segments of the labor force, which are increasingly critical as population shifts continue.
  
  

Elements of a skills-based job architecture

Skills-based job architecture upgrades require up-front planning and the establishment of foundational elements in the organization's technology infrastructure and HR platforms. These start with the definition of all the skills that are (and will be) applied in performing the work in each function and position, a mapping of skills to each role, and the development of tools, methods, and repositories for collecting and storing the relevant data. These lead to the creation of updated job descriptions, evaluations, and (financial) valuation strategies that are then applied to the updating of the job architecture, titles, and pay structures. Elements to be created include:

1. Skills library and taxonomy

The initial step is to define the range of skills that exist and are to be applied to task performance across the enterprise. A skills library is an organized catalog of all skills that can be exercised across job functions and role levels and, as such, is intentionally exhaustive. It can be generated by:

1. Reviewing all job descriptions and extracting each unique skill as described. This arduous and time-consuming task can miss skills needed for some jobs due to insufficiently detailed job descriptions and a lack of awareness of evolving or future skill requirements.
2. Acquiring access to an existing database and selecting those that do or might apply to the work conducted. These are available as embedded resources in some commercially available HR or Talent systems and can alternatively be accessed through sites such as the free, open, crowd-sourced Lightcast.io. They require curation for the larger organization, often involving a review by managers and experts across functions.
3. Using AI or specialized APIs (application programming interfaces) that scour job descriptions, job postings, resumes, employee profiles, performance reviews, individual development plans, and other related documents to develop a listing of skills.

A skills taxonomy is a hierarchical framework that categorizes and organizes skills into groups and subgroups based on their relationships and similarities. This brings greater clarity to the library, as the grouping makes it easier to apply for hiring at different capability levels, define advancement requirements, and produce guidance for development pathways. This is often created after skills are mapped to each job, as relationships between skills become clearer.

2. Skills mapping

This involves identifying the skills associated with job performance for each role. It can be conducted by the compensation team in conjunction with line managers via group work sessions or surveys. It can also be initiated using AI, APIs, or skills intelligence software (see below). However, when this is developed, remember that the automated methods always require expert validation and judgment before finalizing. The key is to keep reviewers’ minds open to previously unseen trends and future skill needs, ensuring the accurate and timely inclusion of all potential skills that can be applied to each role's work.

3. Job profiles or descriptions

These skills-based versions go beyond the traditional job description and outline the skills, abilities, and capabilities required to succeed. They emphasize the skills and proficiency levels necessary to excel in a role and are more common now that college degrees are no longer required in many roles. They clarify essential or minimum skills, associated proficiency levels, and preferred or valuable skills that may differentiate top candidates from those meeting only the basic requirements. These may include categories of skills required for the role, such as:

• Technical skills
• Behavioral or soft skills
• Critical vs. secondary skills 
• Certifications and credentials
• Other experiential requirements 

The skills should be articulated and documented with descriptions of measurable or observable behaviors (e.g., “Ability to conduct a performance improvement discussion with empathy, constructive approach, respectful language, and specified plans and timelines for meeting job requirements.”).

4. Employee profiles

Skills cataloging is not unique or new to employees in some industries, such as consulting or public accounting, and those workers are subject to regular project assignment rotations, related suitability/matching assessments, and valuation based on the breadth and/or depth of skills and expertise. As a result, a two-step process is recommended for generating and maintaining updated views of each employee’s skills and skill proficiency levels.

The first step is to solicit employee input by selecting claimed skills from the library or taxonomy, followed by validation by rating their proficiency level for each. Two typical proficiency rating scales include:

• Beginner, Advanced Beginner, Intermediate, Advanced, and Expert
• Aware, Trained, Applied, Proficient, and Mastery

In the validation phase, confirmation of skill and level of proficiency is most robust when validated by an external source(s). This can be achieved through managerial skill ratings during annual performance reviews or development planning activities, through skills or capability tests (stand-alone or embedded in training programs), or by earning professional certifications.

5. Technology integration

Skills-based job architecture upgrades involve leveraging existing (HRIS, TMS, LMS) technologies, along with the possibilities offered by newer, emerging ones that focus on or rely heavily on skills. Such a move requires integrating systems and processes for use in compensation design and administration, recruiting and talent mobility, learning and development, succession planning and management, and career development strategies and activities.

One critical value of integration (especially of the combined data in a warehouse or other common repository) is generating insights and recognizing talent- and business-related trends in people-related activities. That supports the use of advanced analytics and AI to support decision-making.

The emergence of “skills intelligence” platforms and capabilities that analyze HR data, enabling organizations to quickly and easily assess and manage their workforce's skills. Depending on the vendor and platform, capabilities include individual skills assessment and tracking, organizational skills inventories, skills mapping support, job matching algorithms, skills gap analyses, development path recommendations, and skills demand analyses. Other related technologies include talent marketplaces and skills assessment platforms.

Challenges and considerations in skills-based job architecture upgrades

Valuation of skills

A key issue in using skills for job architecture upgrades is how to market price the value of individual skills and related proficiency levels. It is crucial to understand how to reward and recognize the holder of a series of skills and how to evaluate their financial worth to the organization. A quantitative (e.g., statistical) method can be used over time to assess the relative value of a given skill or combination of skills. Still, it is recommended that a step-wise approach be used for implementation. A focus on evaluating the value of the required skills in the market and how well each individual applies them during a performance period should create a bridge to full skills-based pay.

Process redesign

Tools and methods used in the compensation function and for broader administrative purposes will require updating. For example, creating tools for managers who request new job titles, processes for evaluating market alignment, conducting pay equity analyses, and modeling future pay increases and budgets should all be considered.

Cultural transformation

Job architecture upgrades related to skills-based vs. traditional job-based pay structures, assessments, performance evaluations, promotions, and cross-organizational and functional transfers will need to be addressed. The use of leading change management strategies and approaches is essential, as such a change will impact every employee in the organization, from the CEO to entry-level workers.

Ethical and transparent data management

Collecting and using employee data related to their skills and capabilities can be invasive to some, especially given the low levels of leadership trust currently observed in the workplace. Open and transparent communications and policies regarding the collection and use of such personalized information should be essential. However, 90% of surveyed employees are comfortable with their employers collecting and using data about them and their work, as long as they receive some benefit(s) in return. Guidance on career options, recommendations for development and mobility, acknowledgment and rewards for their growth, and skills addition should offer plenty of motivation.

Relevant Practices & Tools

Advanced Total Compensation Practices that Foster Competitiveness and Transparency Across the Organization. >

Transparency in compensation is neither a best practice nor a luxury; it is a necessity in today’s workplace, especially as new generations of talent join the workplace... more »

Aligning the Compensation Strategy with the Future of Work to Attract and Retain Talent Effectively in an Evolving Workplace. >

Large-scale layoffs in technology, media, and other industries continue to make people anxious about artificial intelligence (AI) wiping out many jobs in subsequent years... more »

Identifying and Sourcing Market Data to Support Decision-making and Future Organizational Plans. >

Organizations seeking effective and relevant compensation benchmarks must identify and compare the same elements to avoid negatively impacting their decision-making process... more »

Leveraging Career Development Technologies and Resources for Enhanced Opportunity Identification. >

Current technologies offer the promise of tremendous efficiencies in the development and handling of career development processes and insights... more »

The Skills Taxonomy Tool: Define and Organize Job-relevant Skills Used in Different Jobs Across a Company. >

A tool to categorize and define the abilities needed to perform jobs across the enterprise. It is a catalog that can be used in collecting and assessing the individual and aggregate availability of skills... more »