Why a Strong Job Architecture is Key to Pay Transparency

The way an organisation is structured can have a direct impact on how employees are paid. And if that structure isn’t well thought-out? It can lead to inequities, disparities and pay gaps. With the EU Pay Transparency Directive just around the corner, employers need to think carefully about the way they define and delineate the different roles within their organisations. Read on to learn how a strong job architecture will be key to compliance with pay transparency legislation. 

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What is job architecture? 

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Job architecture is an organisational framework that sets out how roles are organised, defined and compensated within an organisation. You can think of it as a blueprint for your company: by looking at your job architecture, you should be able to get an idea of the roles that exist within it and how they fit together. 

Building a solid job architecture isn’t just about job titles, but about creating a shared understanding of what each role actually contributes to the business. A strong job architecture should encompass job levels and job families,  define a clear hierarchy and progression framework and outline the responsibilities linked to each role. 

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The link between job architecture and pay transparency 

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Maintaining a well-structured job architecture is key to ensuring equitable pay within an organisation because it creates a clear framework for pay decisions. This lessens the impact of factors like unconscious bias and discrimination.

This is particularly important right now because the upcoming EU Pay Transparency Directive is about to bring many employers’ pay practices out into the open. To avoid negative consequences once the new rules are in place, employers should be preparing now by ensuring their structures and processes are fair and equitable — and that starts with job architecture. 

Read on to learn more about how a solid job architecture could help employers meet their new pay transparency requirements.

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Defining work of equal value 

‘Equal pay for work of equal value’ is a fundamental principle of the pay transparency directive. Essentially, it means that employees should receive the same remuneration if their roles are sufficiently similar in terms of effort, skills, working conditions and other factors. 

This means that employers will need reliable, consistent ways of defining different roles so they can determine which ones are of equal value to the company. A well-designed job architecture can help here because its precise purpose is to document and quantify what each role contributes to the organisation.

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Providing clarity and understanding to employees 

Pay transparency isn’t just about publishing numbers — it’s also about ensuring employees understand the reasoning behind their pay. And it goes without saying that that reasoning should be fair and objective. 

When a company has a strong job architecture, each employee has a solid understanding of their role, how it fits in with the rest of the organisation and the progression paths available to them. This provides them with the crucial context needed to understand the different factors behind their compensation. 

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Avoiding internal discrepancies 

If your organisation doesn’t have a clear structure in place, internal pay discrepancies are bound to occur. These might be due to budget disparities between different departments, unfair hiring practices or even bias on the part of hiring managers.

Job title mismatches are another common problem: for example, you may have a ‘marketing coordinator’ in one department doing very similar work to a ‘marketing assistant’ in another. If pay is based on job titles alone, these two employees may be paid differently despite essentially performing the same role.

Job architecture allows you to ensure pay is consistent across the organisation by providing a proper framework for comparison between employees in different departments. This ensures that employees are paid according to the actual work they do, not outdated job titles or other irrelevant factors. 

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Responding to employee information requests 

As part of the EU Pay Transparency Directive, employees will have the right to request information about their compensation and how it compares to colleagues doing the same or similar work. This will be based on the concept of ‘work of equal value’, as discussed above. 

Responding to these information requests will likely represent a significant administrative burden to HR teams — many of whom are already under pressure. However, having a proper job architecture in place will make the process easier, since it will make it easy to determine which employees should be included in the comparison.

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Facilitating external comparisons 

While comparisons between different companies aren’t directly a part of the directive, the new rules will give employees access to information on what other companies are paying. And, if they feel they’re being underpaid compared to their counterparts in other businesses, they may well jump ship. 

More than ever, employers will need to accurately benchmark their salaries against the market to ensure they’re competitive enough to retain talent — which requires a proper job architecture. After all, if you don’t have a well-maintained system of job levels and titles aligned with market standards, you can’t be sure you’re comparing like for like.  

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How to build your job architecture: a step-by-step guide

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Not sure how to get started putting your job architecture together? Here are the steps to follow. 

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1. Conduct a thorough job analysis

The first step is to analyse the jobs that exist within your organisation. You could start by identifying job families, which might include top-level functions like HR, finance, IT, engineering and sales. Then, you can identify sub-families within these broad categories. For example, your HR department may be made up of smaller teams like recruitment, employee relations, training and development and payroll. 

At this stage, you’ll also need to identify the different career streams within your business. These are different paths that employees can take as they move through the organisation, which might include ‘management’, ‘tech’, ‘support’ and ‘professional’. This helps define the different hierarchies within your organisation. 

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2. Determine job levels and develop standardised job titles 

You’ll then need to identify the different job levels that exist (or could exist) for each role within each career stream. This is called job levelling. There are multiple ways you can do this depending on the size and complexity of your organisation. For example, a basic framework might include the following levels: 

Independent contributor (IC): 

• Beginner 
• Junior 
• Intermediate 
• Senior 
• Staff 
• Principal 

Management: 

• Team lead
• Manager
• Head of 
• Director 
• VP
• C-Level 

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Job levelling serves as the foundation for compensation structures like salary bands, which can help ensure fair and consistent pay across an organisation. Getting your levels right is important as it ensures employees in the same role and level will receive the same pay, even if they work in different parts of your organisation.

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3. Map existing roles onto your newly created job architecture 

The next step is to map all of your existing employees and roles onto the framework you’ve created. This process will likely reveal discrepancies such as: 

• Employees with the same job title but doing different work
• Employees doing the same work with different job titles 
• Employees who have been assigned to the wrong level
• Employees whose role has evolved beyond their job title 

It’s important not to rely solely on existing job titles or descriptions, since these might be outdated or inaccurate. Instead, you should consider each employee on an individual basis. 

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4. Document and communicate your structure 

The final step is to document your job architecture and communicate it within your organisation. First, you’ll need to provide specific training for the teams that will come into most contact with the new framework, like HR, recruitment and compensation. 

But it’s also a good idea to share your job architecture with your entire business since this can foster trust and understanding. Overall, your goal should be to ensure that everyone has at least a basic understanding of the roles, job levels, hierarchies and career paths that exist within your organisation. 

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Why now is the best time to work on your job architecture 

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There’s no getting around it: the clock is ticking on pay transparency, and employers don’t have long left to prepare. Much better to start getting ready now than to get caught out when the new rules are in force. 

While the EU Pay Transparency Directive will bring all sorts of new rules for employers in Europe, it can be summed up as follows: employers will need to be able to justify every decision they make about pay. 

Building an effective job architecture means clearly defining the roles, levels, pay bands, and hierarchies that exist in your organisation.  This provides a solid framework for every decision, helping you ensure each one is justifiable and fair. 

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Learn more 

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Want to learn more about pay transparency and the EU directive? Here are a few articles from our archive to get you started: 

• How Countries Are Implementing the EU Pay Transparency Directive
• Your Pay Transparency Questions Answered: Insights From Our Webinar
• Building a Business Case for Pay Transparency: 6 Steps to Follow
• Why Pay Transparency is Key to Employee Satisfaction
• 5 Barriers to Pay Transparency (And How to Overcome Them)

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