Employee Growth

What Is Job Leveling and How Does It Work? 

September 13, 2023
November 7, 2023
Sarah Lindenfeld Hall and Michelle Villegas Threadgould
Lattice Team

Job leveling, also known as job classification, is a system that HR and people management leaders use to define a job role, develop career pathways and internal mobility processes, and create clear levels or job hierarchies within an organization.

Job leveling helps candidates and employees understand exactly what’s expected of them in a particular role, how their role and responsibilities fit into the broader organization, and what skills are required to earn a promotion. With job leveling, employers map out each level of a specific role, along with the skills and responsibilities required to climb from one step to the next. 

Reaping the rewards of a job leveling system, however, requires more than simply developing those steps. As an organization’s needs and the markets shift, HR teams and business leaders must conduct regular evaluations to ensure they’re building the workforce their organization needs. Here’s why job leveling matters, and how you can build and maintain the right job-leveling structure for your workforce.

Key takeaways

  • Job leveling defines job roles, including the skills and responsibilities at each level.
  • Job levels encourage internal mobility through clear career pathways.
  • Employees can chart their career growth within an organization more easily with job levels.
  • Job levels require regular evaluations to ensure they’re still addressing business needs.

Benefits of Job Leveling

Job leveling should be part of an employer’s broader job architecture, an organizational structure that also includes job competencies, the skills or qualities required for success in each role, and career paths, which encourage mobility within the organization.

As part of that talent management formula, job leveling gives HR leaders a starting point when it comes to building out teams and organizations. With the right job-leveling structure in place, you can create an environment that fosters the success of employees within your organization.

Stephanie Alston, CEO of Black Girl Group, a staffing and recruitment firm that connects racially diverse talent to employers, lists four main benefits of job leveling: 

  1. Clarity and consistency. Job levels ensure organizations are operating with consistent expectations and criteria across a workforce, regardless of an employee's gender, race, or background, Alston shared.
  2. Career progression. With job leveling, employees have a clear understanding of the skills, competencies, and experience they need to move up in their current role or higher-level positions, she said. 
  3. Compensation and rewards. When pay scales are aligned with assigned levels, job leveling ensures employees are rewarded appropriately based on their responsibilities and contributions, Alston said.
  4. Talent acquisition and retention. With job requirements and a path to career advancement clearly defined, job leveling can attract top talent. That same transparent path for growth opportunities and career development can keep current talent on board as well, she shared. 

Amid layoffs and economic uncertainty, those benefits can be especially crucial to ensure the right talent stays on board, Alston said. Even at a time when promotions or significant salary increases may not be possible because of economic forces, a job-leveling structure can be a guide for employees as they work toward the next step in their career by earning new credentials or fine-tuning their skills. 

“Once things do change, [employers] don’t have to worry about [employees] leaving because you’ve done your job in your internal workplace to ensure that your employees are well-trained and that they are prepared to level up now that you have more money and financial resources,” Alston said.

Not everyone wants to manage...retain your employees by giving them two different paths.

Job Leveling Examples

There is no one-size-fits-all template for job leveling. It works differently for companies of different sizes and stages of growth. A startup with 40 employees likely will need fewer levels than a multinational corporation with 40,000. But there is one constant, regardless of the scope or size of the employer: Job leveling should always make room for employees who want to lead people and those who don’t.

Companies must build separate tracks for employees who are promising future managers and others who hope to grow only as individual contributors, becoming subject matter experts in particular topics or technologies.

“Not everyone wants to manage people,” said Dennis Theodorou, managing director at JMJ Phillip Executive Search, an executive search firm. “It’s important that you give yourself the opportunity to retain your employees by giving them two different paths.”

Here are three job-leveling examples with management tracks and individual contributor tracks, when appropriate.

1. HR Team Job Leveling Example

This job leveling matrix splits the job leveling tracks. It provides prospective managers and long-term individual contributors with opportunities to advance in their careers and enjoy pay increases within the same salary ranges, regardless of which track they’re on.

Level 1
Individual Contributor Track: HR Assistant
Notes: Supports HR team in all areas, produces high-quality work, and collaborates well with team members.
Level 2
Individual Contributor Track: HR Generalist
Notes: Takes on greater responsibilities, including answering employee questions about company policies.  
Level 3
Individual Contributor Track: HR Professional
Management Track: HR Manager
Notes: The HR Professional develops expertise in specific areas, such as performance reviews, compensation philosophy, or HR tech support. The HR Manager's duties begin to include direct management of some individual contributors. 
Level 4
Individual Contributor Track: HR Senior Professional
Management Track: Senior HR Manager
Notes: The HR Senior Professional is considered an in-house expert in their specific area, helps lead strategy in the area, and serves as a mentor. The Senior HR Manager takes on more managerial tasks, owning budget decisions, and making data-driven choices.
Level 5
Individual Contributor Track: HR Expert
Management Track: HR Director
Notes: The HR Expert and HR Director bring deep professional experience, tackling complex and business-critical job duties. Both are considered experts in their subject area and are sought after internally and externally for their expertise.

2. Marketing Team Job Leveling Example

This job leveling matrix is built for a larger team, charting entry-level to senior-level roles. 

Level 1
Job Title: Marketing Associate
Notes: Entry-level. Completes supporting tasks that contribute to departmental goals, produces high-quality work, and works well with team members.
Level 2
Job Title: Marketing Manager
Notes: Entry-level. Begins taking on key roles to build marketing campaigns. Has a clear understanding of how tasks impact the team’s mission. Organized and can think ahead. Considered a trusted resource by key stakeholders. 
Level 3
Job Title: Marketing Manager
Notes: Mid-level. Begins to lead key aspects of the marketing plan. Displays strong ability to execute plans, prioritizing which will drive the best results. Can think ahead to address any issue that surfaces. Recognized ability to drive value by key stakeholders.
Level 4
Job Title: Senior Marketing Manager with Specialization 
Notes: Mid-level. Owns specific aspects of the marketing plan and lead generation. Key decision-maker and influencer about how to tackle challenges. Executes cross-functionally on the plan, owning budget and making data-driven decisions.
Level 5
Job Title: Group Marketing Manager
Notes: Senior-level. Uses vision to lead strategic planning for all marketing campaigns. Manages project resources, owning significant budget and making data-driven decisions. 
Level 6
Job Title: Principal Marketing Manager
Notes: Senior-level. Leads the development of marketing plans that transform the brand and accelerate the pipeline.  

3. IT Department Job Leveling Example

For startups with a small workforce where employees might have multiple responsibilities, three levels may be sufficient. 

Level 1
Job Title: Software Engineer 1
Notes: Executes tasks as an individual contributor, maintaining a high level of quality.
Level 2
Job Title: Software Engineer 2
Notes: Owns project-level goals that involve multiple engineers, brings high-level communication and product innovation skills. Identifies and addresses issues as they come up.
Level 3
Job Title: Lead Software Engineer
Notes: Leads multiple software development projects. A sought-after communicator, collaborator, and innovator, guiding all aspects of the development process. Supports IT implementation projects, and mentors colleagues.  

How to Create Your Company's Job Leveling System

Building the right job leveling guide for your organization requires some introspection. And, like any talent management process, HR teams might lead it, but department heads, managers, and individual contributors should be part of the decision-making, too. 

With your job-leveling team in place, start the process by asking questions like these. 

1. What’s happening in the market? 

Among the companies that you recruit from and within your industry, determine the typical levels and career paths, along with the compensation structure that’s attached to them, Alston said. “Do market research on different job levels to be able to identify [if] this job description lines up to the industry standards and does this salary match.” 

2. What kind of company culture are you building? 

Consider your philosophy around career progression and organizational culture. Close-knit startups might prioritize less hierarchy and might expect their employees to juggle many different responsibilities across departments. That kind of culture would lead to a flat structure, with fewer job classifications. Conversely, in larger companies, job leveling can be very complex, with many levels and clear delineation between roles and duties.

3. Is each level clearly defined? 

Establishing well-defined levels that clearly differentiate between steps is critical, Alston said. At each level, ask yourself if the skills, knowledge, expected impact on the team or organization, and behaviors listed are unambiguous, so that employees understand why they’re at their existing level and how they can advance.

Experience is another factor that some organizations consider as they build out each job level. But don’t make the guidelines too rigid, cautioned Brian Anders, human resources director at WorkSmart Systems, which delivers HR services and expertise. Seniority can bring expertise, but not every longtime worker delivers the best work. “You’ve really got to factor in experience and performance,” he advised. 

“Stay responsive to feedback from employees to keep the leveling structure up to date.” 

The Importance of Communicating and Updating Job Leveling

Once the job leveling structure is complete, organizations must clearly communicate the framework, Theodorou said. Emphasize the career progression opportunities to employees during performance evaluations, one-on-ones, and team meetings. At the same time, ensure that job levels are integrated with every compensation and performance management evaluation. 

“The nice thing about job leveling is it enhances talent management by providing clarity, fairness, and growth prospects,” he said. “It aids in attracting top talent, managing employee development, and ensuring equitable compensation.” 

As you communicate each level, it’s important that managers can explain and employees can understand the following, Anders advised.

  • With each move up, how does the job description change? What job duties will an employee stop doing? 
  • What will they continue doing, and how might that change? A salesperson, for example, might be handling accounts up to $2 million at one level and up to $5 million at the next level. 
  • What new job responsibilities will they be expected to tackle? 

“You’ve got to level set what the expectations are in the new role,” Anders said. 

With your job levels in place, you’re not done. Any pivot to a new product, automation of mission-critical tasks, or changes in the market requires another look at your job-leveling framework to ensure it’s still meeting your needs.

Regular audits are required, Alston said. “Stay responsive to feedback from employees to keep the leveling structure up to date.” 

The more your job leveling process is informed by market comparisons and your hiring managers and other key stakeholders, the more it will be catered to the needs of your specific company, driving employee engagement and creating a more equitable workplace.

“It is worth your time, especially if you want to make sure that you’re focusing on retention within your organization, especially during times like this,” Alston said. “Now’s the time for companies to focus on how they can better manage their talent.” Ready to build career tracks that drive growth? Download our workbook 12 Simple Steps for Getting Started With Career Tracks.