Grade

Grade system – The first step for building a team

Your next employee already wants to know much more about the available career paths and salary bands at the company than what is typically written in job advertisements.

LinkedIn’s 2024 research revealed that 60% of job seekers list salary transparency as their number one expectation, while only 40% of recruiters include salary ranges in job postings. This ratio reflects international data, and the discrepancy is likely even greater in Hungary before wage transparency becomes mandatory.

The Grade System as a Priority Board Topic

According to Payscale’s 2024 report, the proportion of companies that publish salary ranges in job ads has increased to 60%, marking a 15% year-over-year growth.

Based on SHRM data, the introduction of wage transparency by 2026 and the resulting pay clarity reduces employee resignation intent by 30%.

The case of the Next retail chain already anticipates £30 million in retroactive wage adjustments.

These data suggest that if a well-structured grade system is not embedded in the foundation of an HR strategy, the company will increasingly face a competitive disadvantage in both recruitment and retention.

Case Study at a Manufacturing Company

  • Annual turnover: Before the introduction of the grade system, annual turnover was 21%. This dropped to 9.6% one year after implementation.

  • Onboarding time: The average onboarding time decreased from 47 days to 26 days over a year.

  • Annual wage cost accuracy: The variance between budgeted vs. actual wage expenses dropped from 8% to 2%. As a result, the CFO and HR no longer had to make urgent corrections, enabling much more confident growth decisions.

What Happened? – The 4 x D Model

  • Diagnose: A grade audit replaced endless Excel reviews.
    Tip: Always measure everything to know where the real pain points are.

  • Design: A 5-level grade ladder was introduced, linked to competencies and benchmark salary ranges.
    Tip: Limit the grade map to a maximum of 6 levels, supported by a competency matrix and benchmark salaries.

  • Deploy: A full-quarter internal communication tour was launched. Key HR, finance, and leadership stakeholders visited every location to introduce the system in a clear and two-way manner. The tour included knowledge transfer, Q&A, local adaptations, leadership training, and documentation.
    Tip: Roll out the system with leadership training, Q&A sessions, and an internal Wikipedia.

  • Drive: Monthly review of KPIs: turnover, internal mobility, and wage forecast accuracy.
    Tip: Don’t just implement it—keep it alive. Use a KPI dashboard to ensure sustainability.

How Can the Grade System Work as Soon as Tomorrow?

  1. Start with a quick internal audit. In the HR system, verify whether it’s clear for each employee exactly which position and salary band they are in, and on what basis they were classified. If the answer is uncertain, the system lacks sufficient transparency.

  2. Select two measurable KPIs that closely relate to the grade structure (e.g., onboarding time or internal applicant ratio). These KPIs should be officially included in leadership reports for ongoing review.

  3. Create a simple infographic about the grade levels: visualize which competencies are expected at each level and where the salary bands lie. Share this via the main internal communication channel so that it’s easily accessible for everyone.

  4. Appoint a Grade Ambassador – an experienced mid- or senior-level manager whom employees can approach with questions. This ambassador serves as the face of the system, gathering feedback, clarifying misunderstandings, and notifying leadership when adjustments are needed.

Recruiting Candidates Matching the Grade Levels

It is crucial to recruit people who match the grade levels, as this ensures the organization’s long-term stability. Professionals aligned with the structure can create value from day one.

According to our consultants, a well-structured grade system typically results in improvements at four stages of the recruitment funnel:

  • Searches close faster

  • Offer acceptance rates increase

  • Fewer resources are spent per hire

  • The number of “mis-hires” (leaving during probation) drops dramatically

Jobcapital can support your company by mapping out the grade system together and precisely identifying which competencies, salary bands, and leadership styles match each level. Our thousands of interviews, network of connections, and well-structured database quickly reveal who the most suitable candidate is for any desired position.

Attila Tarnai
Marketing Manager
Jobcapital