Building Equitable Workforce Systems Through a Skills-Based Approach

by Marie Antonio, Editor-in-Chief

The Challenge

A globally distributed, mission-driven organization operating across multiple locations faced persistent challenges. While formal job grades, salary scales, and performance systems were in place, staff feedback highlighted growing concerns around:

• Perceived pay inequity
• Limited transparency around career progression pathways
• Lack of clarity in recognition and reward mechanisms

To explore a solution, the organization partnered with Birches Group to pilot a structured, skills-based approach that could bring clarity, equity, and consistency to the workforce. This pilot was conducted with the organization’s core business unit.

The Birches Group Approach: Skills As the Common Language

Birches Group’s Community™ Skills Framework served as the foundation for the pilot. The approach focuses on clarifying how skills are defined, assessed, and linked to jobs, pay, and capacity. By anchoring skills to the job itself, the framework creates a shared reference point that applies equally across offices, countries, and teams.

The framework is built on three core factors:

• Purpose – the complexity of thinking and problem-solving required in the job
• Engagement – communication and collaboration with internal and external stakeholders
• Delivery – how work is planned, executed, and translated into timely, high-quality outputs

The Community™ factors are further defined through six indicators. The factors and indicators are job grade-based and can be applied to any kind of job in any occupation in a generic manner.

Purpose

Conceptual Knowledge—What is the conceptual focus and complexity in the design of solutions? For rules-based transactions, what is the complexity of the data or information handled?

Applied Knowledge—What is the breadth of managerial or project/program oversight? What is the extent of supervisory or process management as part of a larger functional service?

Engagement

Internal—What is the collaborative role within the functional team? What is the depth and breadth of information provided to the team?

External—What is the advisory role with other functional teams or external clients? What is the depth and breadth of information provided to other functional teams or external clients?

Delivery

Timeliness—Efficiency: How are resources deployed against project/program needs and cycles? How are process schedules maintained to strengthen service responsiveness?

Quality—Effectiveness: What is the measurable impact of interventions or the functional unit? How are quality metrics maintained throughout service execution?

The Community™ Skills Framework clarifies what an organization is paying for: skills, knowledge, and expertise. It defines five stages of skills growth—Basic, Proficient, Skilled, Advanced, and Expert—each aligned with a specific point in the salary range and representing the accumulation and progression of knowledge within the context of the job grade.

“Skilled” represents the level of skill necessary to carry out work at the optimal level for the grade and is aligned with the midpoint of the salary range.

Basic and Expert mark the entry and mastery ends of the grade, corresponding to the salary minimum and maximum, respectively. The intermediate stages, Proficient and Advanced, capture the progression between these endpoints, making growth measurable and manageable.

This framework enables organizations to manage key points in the employee journey more effectively and equitably:

• Recruitment and Initial Pay Setting—Determines fit for the role and appropriate hiring rate based on assessed skill level

• Recognition of Skills Growth—Supports in-grade pay adjustments and informs promotion decisions based on demonstrated skill growth and progression

• Targeted Learning and Development—Aligns development activities with the specific stage, indicator, and level of the skills framework

Methodology

The pilot was built on a simple but important premise: employee pay should clearly reflect the skills they bring to their role. When organizations lack a structured way to connect compensation with demonstrated capability, inconsistencies can emerge, making it harder to uphold fairness across the workforce. At its heart, the pilot asks a central question: what is the organization paying for?

In any pay structure, the span from minimum to maximum is intended to represent the growth of experience, skill, and expertise within a job grade, as well as the value the organization assigns to that progression. When an employee’s actual capability and experience do not align with their placement in the salary range, it signals potential inequities that need to be examined. This reflects the principle of equal pay for work of equal value, ensuring that compensation is aligned with the level of knowledge and expertise required for the role.

The Community™ Skills Framework provides a clear method for evaluating pay equity and for analyzing and standardizing the connection between skill and compensation. It allows organizations to compare the level of skill implied by current pay (imputed skills) with the level of skill demonstrated in practice (assessed skills) and to apply that analysis consistently from hiring through the full employee lifecycle.

Comparing Imputed vs. Assessed Skill Ratings

In this pilot, two types of skill ratings were compared

• Imputed skill level—the level of skill implied by an employee’s current position within the salary range (i.e., what the organization is paying for)

• Assessed skill level—the level of skill demonstrated in practice, based on the manager’s assessment using the framework

This comparison serves as a valuable diagnostic tool. When assessed skills are notably higher than imputed ratings (assessed > imputed), it points to under-recognition and the possibility that employees are being undervalued. On the other hand, when imputed ratings are higher than assessed skills (assessed < imputed), it may suggest over-recognition or compensation that is not fully aligned with demonstrated skill level. Identifying and addressing these gaps is critical to promoting fairness and strengthening workforce effectiveness.

Conducted over eight weeks, the pilot followed a structured three-phase approach:

• Define (Weeks 1–4): Establishing the Baseline
  • Imputed skill ratings were developed for the pilot unit using current salary data and position-in-range analysis.
  • This created a baseline view of how existing pay levels corresponded to expected skill levels.

• Develop (Weeks 4–6): Skills Assessment
  • Managers received training on the Community™ Skills Framework and used the web-based platform to evaluate staff across six indicators and five stages of skill development.
  • Although imputed ratings were available as a reference point, the assessments were completed independently to reflect actual, observable contributions.

• Deliver (Weeks 7–8): Analyzing the Gaps
  • Managers received training on the Community™ Skills Framework and used the web-based platform to evaluate staff across six indicators and five stages of skill development.
  • Although imputed ratings were available as a reference point, the assessments were completed independently to reflect actual, observable contributions.

What the Results Made Visible

Although based on a limited sample, the assessment provides useful insight into current patterns in recognition, pay alignment, and workforce distribution. These findings are directional rather than conclusive, and broader analysis is needed to determine whether they reflect wider workforce trends.

• The workforce structure is weighted toward lower-level roles
  • The workforce in this unit is concentrated in lower-grade, process-driven, and entry-level roles, with a smaller share of staff in roles that typically provide deeper technical leadership, strategic oversight, and innovation capacity. This creates two risks: limited ability to scale complex work and reduced capacity to design or test new areas of work.

• Majority of staff in the pilot unit are under-recognized
  • Across the unit, assessed skill levels were often higher than the skill level implied by current pay positioning. This suggests that capability is not being fully recognized through compensation in many cases. The pattern emerged across job grades but was most pronounced in its core capacity focused on substantive program design.

• Misalignment often begins when people enter or move into a role
  • A key pattern that emerged was that pay–skills gaps often start at the point of entry into a role. Staff who were newly hired, promoted, or reassigned were especially likely to be positioned below the level suggested by their demonstrated skills. This indicates that early pay-setting decisions may create gaps that continue over time.

• These gaps are not minor
  • Where skill and pay were out of alignment, the difference was often substantial rather than marginal. In some cases, the gap spanned multiple skill milestones (in some cases, it meant getting paid close to the first quartile of the pay range but demonstrating skills closer to the Expert skills stage or the maximum of the pay range), showing that the issue is not just about small adjustments but about more significant differences between contribution and recognition.

• A meaningful share of the workforce is still below the desired capability level
  • The review found that, although many staff are operating within or above the optimal capability range (Proficient +50% to Skilled), a meaningful share remains below it. This suggests that the organization has a solid base to build on, but still needs more deliberate capability development to reach its longer-term target profile.

Why This Matters

• The current system may be undervaluing capability
  • When people consistently demonstrate more skill than their pay position reflects, it can weaken trust in the fairness of the system. Over time, this may affect motivation, recognition, and retention, especially for staff who are already contributing beyond the expected level of their role.

• Early pay decisions can create long-term inequality
  • If staff are placed too low when they first enter or move into a role, the effects can carry forward for years. That means initial pay-setting is not just an administrative step; it is a major factor shaping long-term equity, progression, and perceived fairness.

• Performance and skills are distinct
  • Current pay progression systems place more weight on performance ratings than on demonstrated growth in skills and expertise. This can slow career movement for staff who have clearly developed, while also making it harder to build a transparent and credible pathway for advancement.

• Learning investment is not yet fully strategic
  • Although capability development is needed, learning and development do not appear to be systematically tied to identified skill gaps or progression pathways. Without that link, development efforts may have less impact than intended and may not move the workforce toward its target capability profile.

• The job structure may not fully support future demands
  • A workforce that is concentrated in lower-level roles may struggle to support more complex, cross-functional, or strategic work. This has implications not only for current delivery but also for innovation, succession planning, and long-term organizational capacity.

Overall, the findings point to a structural issue rather than a series of isolated cases. The main challenge is not simply whether staff are at the optimal skill level, but whether the organization has a clear and consistent way to recognize demonstrated capability through job design, pay positioning, progression, and development. A more structured skills-based approach would help strengthen fairness, improve transparency, and better align workforce capability with future needs.

What does this mean for your organization?

In a context of tighter budgets, greater accountability for how resources are used, and increasing expectations around pay transparency and equity, organizations need more rigorous ways to make workforce decisions. A structured, skills-based approach offers a practical way to strengthen fairness, improve clarity, and direct limited resources where they create the most value. This can generate several important organizational benefits:

• More credible and equitable pay decisions
  • Pay positioning and progression can be tied more clearly to demonstrated skills rather than salary history, tenure, visibility, or other inconsistent factors. This helps organizations strengthen
    equity, explain pay decisions more confidently, and reduce disparities that can undermine trust.

• Clearer role definition and better workforce alignment
  • A skills-based lens can reveal when roles have evolved beyond their original design, allowing organizations to address misalignment through job clarification, redesign, or reclassification rather than ad hoc fixes. This is especially valuable when resources are constrained, and role clarity becomes essential for efficient delivery.

• More transparent progression pathways
  • Employees can better understand what advancement requires when expectations are expressed in terms of observable skills rather than informal signals or manager interpretation. This improves transparency, supports fairer progression decisions, and makes career pathways easier to communicate across the organization.

• Stronger trust and organizational cohesion
  • A shared framework for describing skills reduces ambiguity and helps leaders explain decisions more consistently. In periods of uncertainty, such as when organizations may be under pressure to manage costs or restructure, this consistency is critical to maintaining trust in the fairness of the system.

• A clearer distinction between capability and short-term performance
  • Organizations can use skills growth as the basis for progression, promotion readiness, and longer-term workforce planning, while reserving performance systems for year-on-year achievement and results. This moves away from performance-driven pay increases and promotions that may lead to hyperinflation of performance ratings and forced bell curves, and creates a more credible foundation for talent decisions.

• Better targeting of learning and development investment
  • When skill gaps are visible by role and indicator, learning resources can be directed toward the capabilities the organization most needs, rather than spread thinly across generic training. In a tighter funding environment, this helps ensure development spending is more strategic, focused, and defensible.

Contact us if you are interested in learning more about driving pay equity in a global workforce or would like to discuss a possible pilot with a key unit in your organization.

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