Job Analysis and How to Build a Foundation for Your HR System

Key Takeaways

• Job analysis is the process of defining what a role does and what capabilities it requires, producing two outputs, a job description and a job specification.
• High turnover, pay imbalance, and a lack of successors are often treated as three separate problems, but they share one root, the absence of a job analysis and leveling system.
• The job analysis process runs from the org chart, through data collection using several methods, to a job description and specification for each role.
• For Vietnamese companies, job analysis is both the basis for meeting the legal duty to build a salary scale and the foundation for fair pay and competing for talent.

Many Vietnamese companies face three HR problems at once that look separate, namely high turnover, an unbalanced pay structure, and no successors for key roles. In reality, all three share one root, the absence of a clear job analysis and leveling system. The retention gap between two groups of companies shows this, with voluntary turnover at 9.6% among domestic firms compared with 6.5% at multinationals, according to the Talentnet-Mercer Total Remuneration Survey (TRS 2024). Domestic firms tend to lose out because they lack the clear career paths and pay structure that only form on a foundation of job analysis. This article moves from the concept and contents of job analysis, to the step-by-step process, how to choose the right method, and how to turn the results into a fair pay system.

What Job Analysis Is and Why It Drives Your People Costs

Job analysis is the process of collecting and organizing information about a role, including the tasks it must perform, the responsibilities and authority attached to it, the working conditions, and the capabilities the person needs. The result is usually distilled into two core documents. A job description lists the functions, duties, responsibilities, authority, and working conditions of the role. A job specification sets out the requirements for education, experience, skills, and personal qualities needed to do the job well. The two documents answer different questions, one being what the job requires, the other being what the person needs.

What makes job analysis a matter for the executive team, not just HR, is that it drives a large share of people costs. When a company does not know exactly what a role is worth relative to the market and to other roles inside the organization, it pays by instinct, so one person is overpaid while another is underpaid. Both are costly, one wasting budget, the other losing good people. Replacing a mid-level employee can cost the equivalent of 50 to 75% of that role’s annual salary, according to Mercer data cited by Talentnet, so every mispriced role and lost hire is a real loss.

This is why three seemingly separate problems share one cause. High turnover often happens because employees see no development path or feel pay is unfair. Pay is unbalanced because there is no objective basis to value roles. Successors are missing because the company cannot identify the capability gap between the current role and the one to be filled. All three are symptoms of the same gap, the absence of a job analysis and leveling system. Treating each symptom separately is costly and never fully resolves it, whereas solving it at the root starts with one basic thing, getting job analysis right.

The Job Analysis Process, From Org Chart to Job Description

Job analysis does not have to be complex, but it has to follow the right order. A sound process usually has four steps, from defining scope to finalizing the documents for each role.

Identify the need and the roles to analyze

The first step is to define why the company needs job analysis now. The need usually arises when a company is newly formed, when a new role is created, or when a structural change means job content no longer matches reality. From there, the company uses the org chart and the work-relationship map to list the roles to analyze. With limited resources, the smart move is to prioritize key roles or the roles causing the most trouble first, rather than trying to do the whole organization at once.

Collect information, secondary before primary

The second step is collecting data about the work, and the order here makes a big difference to efficiency. A company should start from existing secondary information, including the current org chart, department function descriptions, and old job records. Only after grasping the overall picture should it move to primary information gathered directly from the people doing the work and their managers. This avoids wasting time asking again about things already on paper, and keeps interviews and surveys focused on what genuinely needs clarifying.

Analyze and write the description and specification

The third step turns raw data into two outputs. All the information collected is organized into a job description and a job specification for each role. What matters here is describing the job as it truly happens, not as the company wishes or as the old description recorded. A description that misrepresents reality leads to wrong hiring, wrong appraisal, and wrong pay.

Review, standardize, and update regularly

The final step is reviewing to ensure descriptions are consistent in structure and language across the organization, then having managers and role-holders confirm accuracy. Job analysis is not a one-off exercise to file away. When the organization, technology, or strategy changes, job content changes too, so the documents need regular updates to avoid becoming dead paperwork.

Choosing the Job Analysis Method That Fits Your Business

No single data-collection method works for every kind of job. Each has its own strengths and weaknesses, so the effective approach is to combine several rather than rely on one. The four most common methods are compared below.

Method	Best suited to	Limitations to watch
Direct observation	Jobs with clear, repetitive physical tasks	Cannot measure knowledge work, and people may behave differently when watched
Interviews	Deep information on complex jobs	Time-consuming and can be subjective if the respondent overstates the role
Structured questionnaires	Standardization and reaching many employees at once	Hard to design well and often has a low response rate
Work diaries	Recording the real frequency and duration of tasks	Effort to maintain and dependent on the recorder’s honesty

For most companies, a sensible combination is to use a questionnaire for broad coverage, then in-depth interviews for key roles, and supplementary observation for hands-on positions. What to avoid is choosing a method out of habit without considering the nature of the work, since wrong input data ruins the entire analysis. A recent trend is using computerized job analysis systems to shorten the time and improve accuracy, though cost and technology requirements remain a barrier for small and mid-sized companies.

Turning Job Analysis Into a Fair Pay System

Job analysis only answers what a role does. The next step is job evaluation, determining what a role is worth relative to other roles in the organization. This is done systematically through methods such as point-factor scoring or job ranking, based on the skills required, the level of responsibility, and the impact on the business. This is the shift from understanding the job to pricing the job, and it is the basis for fair pay rather than pay by seniority or individual negotiation.

At the international standard level, the Mercer IPE method evaluates each role by business impact, communication scope, innovation requirements, and technical complexity, and is applied by Talentnet at more than 1,000 companies in Vietnam. The impact of a rigorous system is measurable. After Unilever Indonesia rolled out job evaluation using this method for 5,000 employees, pay equity reached 95% and turnover fell 25%, according to Mercer data.

The evaluation results translate into job grades, from entry level to leadership, each tied to a salary range with a minimum, a midpoint, and a maximum. Adjacent grades should overlap so employees have room to grow their pay within the same role before a promotion. A common practice is to keep at least a 5% gap between grades so each step up is meaningful, while the specific differential is set by the company to reflect the real difference in job value between levels.

For Vietnamese companies, this is also where it meets a legal duty. The 2019 Labor Code, Article 93, requires companies to build a salary scale as the basis for paying wages and social insurance, with consultation of the employee representative body and public disclosure. This duty applies to companies with two or more employees, and the absence of a salary scale can carry a fine of 20 to 40 million VND under Decree 12/2022, Article 18. In other words, job analysis and leveling are no longer optional but the foundation of a compliance duty. Beyond pay, the same analysis serves many other functions.

• Recruitment, where the job specification defines clear candidate criteria.
• Training, by comparing current capability against job requirements to find gaps.
• Performance appraisal, where the job description provides an objective evaluation standard.

Conclusion

High turnover, unbalanced pay, and missing successors are not three separate problems needing three separate fixes. They are three expressions of the same foundational gap, and the most sustainable solution is to go back and get the basics right, namely job analysis and leveling. When a company knows exactly what each role does, what it is worth, and where it sits in the organization, decisions on pay, hiring, and development all share a common basis to rely on.

For domestic firms, this is also how to close the gap with FDI companies in the competition for talent, starting from a transparent foundation rather than chasing one pay raise after another. With total rewards consulting and market data from the Talentnet-Mercer partnership, Talentnet works with companies to build systems for job analysis, leveling, and fair pay, aligned with strategy and compliant with the law.

Frequently Asked Questions

How is job analysis different from a job description?

A job description is one of the outputs of job analysis, not the whole of it. Job analysis is the entire process of collecting and organizing information about a role, while a job description is only the document recording duties and responsibilities, alongside the job specification.

How often should job analysis be updated?

There is no fixed schedule, but you should review it whenever there is a major change in organizational structure, technology, or strategy, and do a full check every few years. An outdated job description is more dangerous than none, because it leads to wrong hiring and appraisal.

Where should a small company with limited resources start?

A small company should start with a few key roles or the roles causing the most trouble, rather than doing the whole organization at once. A simple questionnaire combined with a few interviews is enough to create an initial foundation, then expand gradually as resources allow.

Who is responsible for job analysis, HR or line managers?

It is a joint effort. HR usually leads on method and ensures consistency, while line managers understand the actual work best and provide information and confirm accuracy. Missing either side, the result easily goes wrong.

Can a company be fined for not building a salary scale?

Yes. Vietnamese labor law requires companies to build and publish a salary scale, and non-compliance can carry a fine of 20 to 40 million VND under Decree 12/2022. Beyond the legal risk, the lack of a salary scale leaves a company with no objective basis for pay, leading to internal inequity.