15 best practices for HR leaders to create job levels & career paths that boost retention

It’s a timeless question for candidates, but how would your employees answer, “Where do you see yourself in five years?” If most don’t have a clear answer based on your organization’s policies and procedures, you have a career pathway problem. And likely, a retention problem as well.

Lack of job clarity, which can make employees feel like they have no opportunities for advancement, is the reason 63% of people say they quit in 2021, according Pew. It’s a persistent issue. The 2022 Career Optimism Index finds that 43% of workers don’t see a clear path to advancing their careers in their current roles.

On top of that, a lack of role clarity is one of the top 5 reasons for employee burnout, says Gallup. And employees who experience burnout are:

• 2.6x more likely to be looking for a new job
• Half as likely to discuss how to approach performance goals with their manager
• 13% less confident in their performance

While job clarity is important year-round, it’s especially critical in Q1, a season commonly associated with high attrition.

If your company’s career paths have you worried about losing top talent, it’s not too late. Sixty-nine percent of employees say they would stay at their job if things could change.

In this article, you’ll learn best practices for creating well-defined and equitable career pathways that motivate employees to grow and stay. When you’re done here, check out how merit cycles and pay transparency can also boost retention.

Check that your pay data is also motivating your team!

Best practice #1: Start with job levels

While new and smaller organizations can make do without a formal job leveling framework, it’s essential for larger organizations. A job leveling framework helps employees understand their roles and see what they must do to get promoted, making it easier to envision a long tenure at your company.

Job levels set the seniority, expectations, and responsibilities for a specific role. For example, engineer, senior engineer, and lead engineer are different levels of a role. Each job level has its own competencies, responsibilities, and salary band or pay range. The number of levels per role varies by organization.

Job leveling can be a complicated process. To help get you started, we’ve included a step-by-step guide at the end of this article. On your way there, you’ll find more job leveling tips for your HR toolbox. Start with best practice #2 below.

Best practice #2: Ask what makes someone successful in THIS organization?

Companies have different metrics for success. In addition to competencies, think about the needs of your company. Group answers by themes and use them as a basis for your leveling.

“Start with the end in mind,” suggests Jamy Conrad, senior director of people at TrustRadius, suggests starting with the end in mind. “What do we want our culture to look like?”

Verify that your pay data is also empowering your team!

Best practice #3: Make it measurable

Don’t make the framework too specific. For example, a checklist may not account for all the knowledge and skills an employee needs to master a role, and could lead an employee to believe they’re ready for a promotion when they’re not.

At the same time, don’t make the framework too vague. “Must know how to manage people,” leaves a lot to interpretation. But “Manage a team of 5 or more” is quantifiable.

Best practice #4: Document and communicate the criteria for bonuses and promotions with employees.

Documented processes and criteria give your managers and other decision-makers an objective framework for determining employee pay. Employees get a clear picture of how they can progress, allowing better career decisions.

Best practice #5: Don’t ask candidates for salary history.

When you base compensation on someone’s previous salary, you risk continuing unfair or inequitable pay practices (not to mention breaking the law). That leaves workers— especially women and minorities — perpetually underpaid. For women, this wage gap could mean up to $2 million in lost wages over a lifetime.

Instead, craft an offer based on relevant market data and your compensation philosophy.

Is your pay data buoying your team!

Best practice #6: Get input from managers, not just executives

Managers are the ones who will see the roles and levels in action daily. Throughout the process, ask managers if the levels, competencies, and descriptions make sense to them. Do they support what managers see and experience? Do they reflect the company culture?

Best practice #7: Confirm internal alignment

Your framework may have evolved since stakeholders last reviewed it. Before roll out, confirm that all stakeholders agree with the final version. It’s easier to make adjustments before you’ve placed employees in your new levels.

Best practice #8: Train managers on how to use & explain job levels

Train managers on how to apply the framework during hiring and promotions.

“Sometimes companies will hand managers the leveling framework and it doesn’t get pushed over the finish line because managers don’t know how to apply it,” says Ashley Brounstein, OpenComp’s head of people.
Equally important, train managers on how to explain job levels to employees in a way that’s clear and relatable. “Employees want to know, ‘What does this mean for me in my specific role?” says Brounstein.

Empower managers to have confident conversations about compensation to avoid the dreaded answer, “That’s what HR told me.”

Best practice #9: Share the framework with employees

Workers want to know that pay at their company is not random. A job leveling framework (along with salary bands and your compensation philosophy) can show employees there’s a strategy behind pay decisions.

How you share your framework, and how much of it you share, is up to your company. What’s important is making everything easy to understand. Include examples and definitions of any technical terms that may be unfamiliar to employees.

Best practice #10: Revisit your framework often

“This is a living document,” says Matt Toeller, vice president of global total rewards at Harness. “What you have in place now is not what you’re going to need later.”

Make a review of your leveling framework a regular part of your compensation program process. Update your framework as needed.

Once your job levels are ready to go, you can set your focus on developing career pathways.

Best practice #11: Ask employees what they want from their careers

Don’t make assumptions about someone’s career goals. While some workers have their eyes on promotions, others might be satisfied in their current role and simply want more work-life flexibility in recognition of great performance. By learning about individual motivations, you can tailor plans and support.

If an employee doesn’t know what they want, be ready with suggestions that can help them discover a career path that they’re excited about, says Brounstein. Ask questions like: What are your strengths? What are you good at? What are you curious about?

Best practice #12: Make career plans simple and flexible

“Organizations make career pathways more complicated than they need to be,” says Conrad.

Goals may evolve and trends for a role may shift. Design career pathways to allow for modifications along the way. This includes giving people an opportunity to change their minds if they discover they’re no longer interested in a particular path. It’s easier for smaller organizations to be flexible, but that doesn’t mean pathways have to be set in stone at larger organizations, says Conrad.

Best practice #13: Consider individual situations

The most motivated employees aren’t necessarily the ones who raise their hands. For example, an employee may want to take on a special project but can’t work the extra hours needed because they have young children. In circumstances such as this, how can you provide opportunities that suit that employee’s situation?

Best practice #14: Make the goal-setting process and objectives and key results (OKRs) transparent

While career pathways are about individuals, everyone is driving toward the same department-specific and company-wide goals. By knowing the ultimate goals, you can identify where the employee can contribute, where there are gaps in knowledge or skills, and what kind of support you can provide.

This ties back to goal-setting conversations and how an employee can build knowledge as they progress up the ladder. It’s not about checking off boxes in the job description.

Best practice #15: Check in often

Frequent check-ins, conversations with managers, and regular feedback can help keep employees on track, both in formal reviews and informally during 1:1s. These interactions can also help managers spot problems and learn where an employee might need more help.

Offer guidance, but ultimately, employees must own their career paths. Encourage them to identify their own stretch goals and, like a coach, steer them in the right direction if the goals are too ambitious or not ambitious enough.

How to create a job leveling framework

Step 1: Meet with top execs and stakeholders

Ask execs and stakeholders to help define the competencies (skills and behaviors) of each level within the framework. Remind them of the difference between a competency and a quality. A competency, such as communication, can be measured objectively. A quality, such as fairness, is subjective.

Step 2: Recommend competencies

Propose competencies for every job level based on your conversations, taking into account business needs, strategy, and culture. You can have company wide competencies and layer on others that are specific to certain roles or functions.

Step 3: Write descriptions for every job level

Descriptions can help you measure proficiency for each competency. Aim for a clear distinction and scale of complexity between levels without getting too rigid. No two levels should have the exact description.

Step 4: Apply a salary band to each level

If you’ve already completed salary benchmarking and decided what you can afford to pay relative to the market, assign a salary band (also known as a pay range) for each job level.

Want more help?

If the idea of constructing a job leveling framework sounds daunting, don’t try to reinvent the wheel. There are plenty of templates and resources that can make the process a breeze. OpenComp’s Services team also specializes in developing Job Architecture Frameworks, so feel free to reach out.