Job analysis – in praise of an analytical approach

3/12/2024

Irja Rae, Figure Baltic Advisory partner

As the 2024 salary survey approaches, we recognize the classification of jobs into job families as one of its most integral yet challenging components. Selecting the appropriate job family and level is essential for aligning each position’s salary with the correct market comparison group and making informed salary decisions based on survey data. Moreover, each job family level’s associated point value facilitates the organization of the internal structure of positions. Without understanding each role's responsibilities and the degree to which a job has evolved over any given year, correctly identifying the job family or level becomes a formidable task.

Consequently, the preparation phase for the survey presents a prime opportunity to carry out job analysis, particularly for roles shrouded in uncertainty. Given the rapid salary growth over the past two years, these uncertainties may now be widespread across organizations. Despite some views that job analysis is an outdated practice, unnecessary for contemporary organizations, a closer examination may prove otherwise.

Job analysis is a structured approach to comprehensively define a position’s duties, the competencies needed to fulfill these duties, and the role’s connection to other positions within the company. The outcomes of a job analysis are foundational for recruitment, training, development, and, importantly, salary management. In the current climate, where cost-effectiveness is increasingly prioritized, job analysis offers decision-makers essential insights into whether tasks are conducted efficiently and if roles are tailored to the organization’s genuine requirements.

Furthermore, job analysis is instrumental in deciphering the differences in work performed at various career stages, its impact on other roles within the company, and the level of autonomy and decision-making required by each job. Regrettably, this critical process is often neglected or performed irregularly and without a systematic approach.

The emphasis on skills in today's job market has become more pronounced. Reflecting on a statement from myself at a salary seminar four years prior, “skills are the new oil,” it becomes apparent that job analysis clarifies that skills are not isolated; they are defined by the demands of the job, ensuring their relevance and practicality.

Consider the role of a Financial Analyst during the period of intensive financial reporting—from tax declarations to corporate economic analyses—making it an indispensable function. A Financial Analyst’s primary responsibility is to examine financial data to evaluate the company’s fiscal health and aid in strategic decision-making. This includes scrutinizing financial trends, returns on investments, and potential risks. Job analysis ascertains the specific types of financial analyses required, such as cash flow, profitability, and cost-efficiency studies, and how these support the company’s objectives. Emphasizing the role’s linkage to the organization is crucial.

What competencies are necessary? A Financial Analyst must possess strong analytical abilities, work adeptly with large datasets, have an extensive understanding of financial reporting and modeling, and grasp economic principles. Equally important is the capability to interpret intricate financial data and convey it in a comprehensible manner to both financial and non-financial stakeholders.

Job analysis also uncovers the significance of communication and teamwork, as financial analysts frequently collaborate with various departments and specialists both within and outside the company.

The analysis extends to working conditions, such as the work environment, regular working hours, and the need for adaptability in urgent situations.

Furthermore, it investigates the interplay with other positions, defining how a Financial Analyst’s role supports and enhances the work of accountants, financial managers, and investment managers, ensuring decisions are informed by precise and timely data.

Flexibility regarding time and location is also evaluated, determining the feasibility of such flexibility for specific tasks.

It is prudent to identify the criteria for exemplary performance within each role, as this informs how managers might evaluate an employee’s work.

The distinction between job analysis and job evaluation is their focus: job analysis seeks to comprehend the role, whereas job evaluation utilizes this information to gauge the job’s relative worth within the organization. Together, they offer a detailed understanding of job requirements and the value of each role, promoting alignment between HR practices and organizational objectives, which is vital for job satisfaction, employee retention, and enhancing overall organizational performance.

Recommendations for conducting job analysis include:

1. Engage diverse stakeholders. Managers, current job incumbents, and HR professionals should participate in the job analysis and evaluation process. Their involvement guarantees a comprehensive understanding and endorsement of the results.
2. Implement a systematic method. Adopt consistent and methodical procedures using tools like interviews, surveys, and job shadowing to gather all pertinent information reliably.
3. Continually refresh the analysis. As organizations and job functions evolve, it is critical to periodically reassess and update job analysis and evaluation findings to ensure that the salary system remains relevant and aligned with both organizational needs and market trends.
4. Prioritize transparency. Clarifying how job analysis and evaluation are conducted, the criteria used, and the implications for salary determinations fosters trust and satisfaction among employees.
5. Integrate findings into HR strategies. The insights from job analysis and evaluation should inform broader HR initiatives, such as recruitment, training, career planning, employee satisfaction, and overall performance improvement.