Organisational structure and design affects every aspect of a business, including talent mobility, compensation programmes and even the speed of innovation. There are several compelling reasons why companies should take time now to evaluate their global job leveling structures, including:
Hyper-growth leads to workforce expansion and diversification: When your headcount grows fast, it quickly becomes imperative for companies like yours to not only understand how each new job you add fits into existing systems, but also to assess the similarities and differences between job roles and underlying skill sets as the business changes.
Rapid industry convergence: Companies are constantly crossing into adjacent industries. As such, non-traditional technology companies that are hiring employees with new types of technical skills are revisiting their job architecture and levelling structures to ensure they are categorising new jobs in a way that reflects the hiring and growth priorities of the organisation.
Internal pay equity: Creating fair and transparent job levelling structures ensures salary structures reflect market pay and allow a company to spot pay inequities that might have remained hidden. With each passing year, legislative and societal pressure is mounting to make pay fairness for all a priority.
Rising M&A activity: Many companies revisit their levelling structures following a major transaction as a way to integrate workforces; however, a growing number of companies are seeing the benefits of having an effective levelling structure in place to prepare for M&A before a deal is signed.
In light of this dynamic, over the past several years, we’ve seen a steady shift away from highly regimented job levelling models. HR and talent leaders want job levelling tools that have enough built-in flexibility to handle cultural differences, local and regional regulations, diverse business needs, and changing talent requirements.
Applications in Asia
The dynamic business environment across Asia produces a high degree of regional differentiation, which makes tailoring job levelling to the unique needs of every market where you operate even more important. For example, China and India are beginning to show more prominent pay premiums for technical job roles, much like the US, while Japan and Korea seem to show a technical premium only at upper management levels, not at entry levels.
It’s important to take these types of differences into consideration when developing global levelling structures. For example, we would recommend keeping technical and non-technical job roles separate for salary range development if you operate in multiple countries where premiums don’t follow the same patterns.
Companies operating in Asia also tend to prefer working "tweener grades" into their job levelling models. These grades are intermediate steps within a global career level that have their own specific base salary or fixed compensation ranges. This allows for more frequent performance reviews and pay adjustments. This type of approach is sometimes used in China and India where the jump in pay from one official job level to the next is steep, and the promotional velocity for lower-level employees is typically expected to be rapid.
Here’s how tweener grades can be developed specifically for Asia within the context of a larger global levelling system.
In this example, Grade 6 is subdivided into two tweener grades, 6a and 6b, in order to accommodate more frequent performance assessments. The overall fixed compensation range remains the same; however, additional pay ranges now exist within this span.
When designed correctly, job levelling greatly simplifies how global workforces are organised and managed by introducing a common grading language across all employees and functions, while still differentiating for performance and specific market realities. Job levelling also creates an infrastructure that is easier to maintain as a company continues to grow its workforce and geographic reach.
Most companies that turn to job levelling find the approach to be more transparent, fairer and easier to communicate to employees. In an era where many companies are concerned with and actively root out pay inequities, as well as the deeper structural issues that can sometimes lead to them, job leveling is a system that can support this important effort.
The full version of this article first appeared on Radford's website.
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