Job Leveling: How it works, and free leveling frameworks
Job levels provide a clear roadmap for employees, showing them the concrete steps they need to take to progress within an organisation. From an HR perspective, they can also enhance everything from salary negotiations with new hires to performance management and succession planning. Read on to learn more about the many benefits of job levelling — plus how to build a robust, scalable levelling framework for your organisation.
What is job leveling?
Job levelling is the process of organising roles into levels according to their complexity, skill level and other factors. This provides a structured framework that helps HR teams, managers and employees to better understand the overall structure of their organisation.
A job levelling framework should apply throughout the organisation — not just in one particular department. This helps to ensure consistency across the business and helps employees to understand how everyone fits together.
In most organisations that use job levelling, each role and level has a particular pay range attached to it. This ensures that employees receive the same pay for doing the same or similar work — even if they work in different departments.
The importance of a strong job levelling framework
A strong job levelling framework can have many benefits for an organisation — here are some of the main advantages:
- Creates a shared understanding of roles and responsibilities: Job levels create a common language for talking about roles, career progression and compensation across an organisation, ensuring consistency across different departments.
- Allows for accurate salary benchmarking: Well-defined job levels allow companies to accurately benchmark salaries against the market — in the knowledge that they’re truly comparing like for like. This ensures pay is fair and competitive.
- Supports equitable pay: A core principle of pay equity is that employees should be paid the same for the same work — and that’s much easier to ensure when roles and levels are clearly defined. That means job levels make pay equity issues less likely to arise.
- Helps employees understand growth opportunities: A job levelling framework shows employees the different career paths available to them, plus what is expected of team members at each level. This helps them understand how they can progress through the organisation.
- Increases employee engagement and retention: Job levels reassure employees that their compensation is based on a fair and consistent structure. It also gives them visibility over their future opportunities for growth. Both of these factors can improve morale, engagement and retention.
- Enhances talent management: Having clear expectations for each role and level within an organisation can also make talent management easier. For example, managers can use the levelling framework as a basis for discussions about performance. It can also help with succession planning, skill development and identifying high-potential employees.
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How to implement job levelling
Most organisations start off small and grow gradually over time — and there’s usually no need for a levelling framework in the early stages. However, once a business reaches a certain size, job levelling becomes a necessity for consistency, fairness and pay equity. Here are the steps to follow to implement a job levelling framework for your organisation.
1. Define the different career tracks within your organisation
In most companies, there’s more than one progression path available to employees. For example, some focus on honing their technical skills, becoming subject matter experts in a particular area. Others choose to develop their leadership skills and eventually move into management roles instead.
The first step in building your levelling framework is to determine which tracks exist within your organisation. The simplest option here is to have just two tracks: independent contractor (IC) and management. However, some companies have additional tracks like tech, executive and support.
2. Set levels within each career track
The next step is to define the hierarchy of levels contained within each track. It’s common to assign a number or code to each level. How many levels you have in each track is up to you — smaller companies might only need 2–3 levels, whereas larger, more complex organisations will likely need more.
It’s important to think not just about the levels that currently exist within your organisation, but also those you’ll need to introduce in the near future. For example, if you’re expecting a period of significant growth, it’s likely that you’ll need to add more levels of management than you currently need. Planning for these additional levels now can help make for a smoother transition.
3. List key competencies and criteria for each level
Your levelling framework should also define your expectations for each level of execution. For example, each one should be associated with a certain amount of responsibility, business impact and autonomy. You may also want to think about the skills and competencies needed for each level.
However, it’s important to remember that a levelling framework is designed to improve consistency across your organisation. That means it’s not about listing the specific skills for each role. Instead, you should think about the requirements that apply to any role at a given level. For example, a team leader position inherently requires some leadership skills, while an entry-level IC role probably doesn’t.
4. Review job titles and descriptions
Once you’ve defined the levels that exist within your organisation — as well as those you might need in the future — you’ll need to map your existing roles onto your new framework. You’ll probably find certain inconsistencies, like employees working in essentially the same role in different departments with different job titles.
Keep in mind that job titles and descriptions may not be enough to accurately classify a role, since they’re often outdated. It’s important to consider each job one by one to determine where it fits within your newly created framework.
5. Benchmark each role and level and assign a salary range
Different companies define salary bands differently, but at Figures, we understand them to be the amount you’re willing to pay for a particular role. Within that salary band, you should have a different salary range for each level. This ensures that employees doing the same work at the same level will receive approximately the same compensation — even if they work in different departments.
Of course, salary bands and ranges shouldn’t exist in a vacuum. Many companies use tools like Figures to benchmark their salary bands against the market, ensuring their pay is fair and competitive. Well thought-out job levels are crucial to benchmarking, since they allow you to ensure you’re comparing like for like.
Job levelling examples
There’s no one right way to define your levelling framework — it all depends on the size, complexity and needs of your organisation. Figures clients can choose between two different frameworks when setting up their organisation on our platform. We’ve outlined them below to give you an idea of what your job levelling framework could look like.
Example #1: Simple framework
The simple framework is most suitable for smaller organisations with a headcount of up to 200–250 employees. While these organisations may be growing, their overall structure remains relatively simple. The simple framework is divided into two tracks: IC and management.
The simple framework - duplicate it here
This option will be a good fit for companies with a headcount up to 200/250 employees.
→ Your organization is growing, some layers of management are appearing along the way, but the overall structure remains “simple”.
Level hints are here to help you understand the main differences between the level you’re looking at and the previous one, in case of hesitation!
Independent contributor (IC) track
- Junior: These are entry-level employees who work entirely within their own team and have limited autonomy. They typically work on specific tasks based on detailed directions from more senior peers or managers. These roles involve very little advanced problem-solving.
- Intermediate: These individuals work mainly within their own function but may interact with employees in other departments. They have more autonomy than junior employees, but still rely on senior colleagues for complex decisions. They may contribute to larger projects and work towards company-wide achievements.
- Senior: These employees work with peers across departments and within the leadership team, and have an impact across different parts of the business. They are mostly autonomous, though they may require light supervision or technical validation from others. They own and solve complex tasks and may lead small projects by themselves.
- Staff: Staff-level employees partner with senior leaders and have a strategic impact across the organisation. They are free to make their own decisions and are recognised as subject matter experts within their fields. They own and lead large, complex projects involving team members from different departments.
Management track
- Team lead: These are entry-level managers who coordinate and supervise the activities of a small team of 2–4 people. They still have operational responsibilities and split their time between these and management tasks. They are held accountable for their team’s performance, but are not the main decision-makers for their department.
- Manager/Head of: These individuals are accountable for the performance of a larger team or multiple teams representing a wider business unit (such as sales or marketing). They are not the final decision-makers when it comes to setting the team’s strategy, but may build roadmaps based on the company’s overall goals.
- VP: These higher-level managers typically manage an entire department and have several levels of management beneath them. They are the final decision-makers for their department and contribute to company-wide strategy decisions with other business leaders. VPs are also responsible for approving staffing and budget decisions.
- C-Level: These individuals occupy the highest level within an organisation, and have a strong influence on the company’s overall strategy. They lead entire subsets of the company and have full autonomy. C-level executives should act as role models for the entire company, embodying its culture, values and principles.
The advanced framework - duplicate it here
When organisations expand beyond about 200 employees, they typically need to add more nuance and detail to their structure, which means adding new job levels. Our advanced framework is quite similar to the simple framework above, but includes one additional level in the IC track and two additional levels in the management track — you can see what the whole thing looks like below.
Independent contributor (IC) track
- Beginner (IC1)
- Junior (IC2)
- Intermediate (IC3)
- Senior (IC4)
- Staff (IC5)
Management track
- Team lead (M3)
- Manager (M4)
- Head of (M5)
- Director (M6)
- VP (M7)
- C-Level (M8)
How to choose a framework?
You already have an existing leveling framework
Congratulations! You already have your own leveling framework, and no matter what it looks like you will be able to match it to ours!
It’s time to chose between Simple and Advanced, the framework that is the closest to yours:
- You might have the exact same structure as one of our two frameworks, then it’s an easy choice!
- If you notice some differences (you might have 5 IC / 5 managers levels for instance), then we’ll recommend that you use the Advanced framework, it will be easier for you to i. map your employees today, and ii. scale your use of Figures and possibly your internal tools with more levels in the near future.
- If you have more levels than our Advanced version, it’s likely you will have to regroup some of your levels into ours, for that you can check our high level definitions.
In any case, if you have a doubt or need help on the matching, feel free to contact us so we can provide support.
You don’t have a leveling framework and want to create one
Until then you didn’t need a proper leveling framework due to your company size or model of organization, but it’s now time for you to structure things out!
You can base your decision on several criteria, the most common combo of things you should think about being:
→ The size of your company, and the headcount growth you are anticipating
- If your company is currently less than 200 employees and you’re not planning on growth in the coming 12 months, you might want to keep things simple, and use a framework with fewer levels (the simple framework)
- If your company is about 50 people or more and you are planning for substantial growth (let’s say at least x1.5) in 12 months or if you already have more than 200 people, then you should think about starting things of directly with the Advanced framework. Even if you might not use all levels from the get go, you will soon enough realise your organization’s structure is evolving quickly and need more granularity than a Simple framework can offer you. Instead of adding levels later on (which is not always an easy task), better think of them from the beginning, and not re-do the job in 6 to 12 months to fit your new needs.
You don’t have a leveling framework and don’t want to create one
The size of your team or your current organization might not need for you to create a leveling framework just yet, and that’s fine!
Depending on the size of your team, chose the Simple or Advanced framework when you set up your company’s account.
- For companies of less than 200/250 employees, we recommend to chose the Simple framework, as you probably don’t need more granularity and don’t have that many layers of management.
- For companies above this headcount, the Advanced framework will be more appropriate as you’ll be able to differenciate more precisely your employees based on scope, level of responsibility or influence, which your organisation most likely requests you to.
Find out how to implement your leveling in your compensation strategy!
The importance of job levelling in the pay transparency era
The EU Pay Transparency Directive was approved in 2023 and will come into effect across all member states by June 2026 at the latest. Among other things, the directive will require employers to put in place fair, objective job categorisation methods, allowing them to meet the requirement of ‘equal pay for work of equal value’.
The directive doesn’t provide specific guidelines on job categorisation, except that decisions must be made according to fair, objective and gender-neutral criteria. Job levelling will play a huge role in helping employers to categorise employees fairly and consistently across their organisations.
Learn more
Learn more about organisational structures and their impact on compensation and pay fairness with these articles from our archive:
