Classification of Software Engineers (Grade System → IT Job System)
1. Overview
A. Definition
The engineer grade system is a workforce classification scheme that scored career, education, and qualifications to sort people into beginner, intermediate, advanced, and expert grades, whereas the IT job system is a competency-centered scheme that classifies the workforce on the basis of the job performed and the actual level of competency demonstrated.
The essential difference between the two systems lies in "what a person is evaluated by." The grade system scores the history of the input labor (input) — how many years worked, which school attended, which certifications held. The IT job system, by contrast, looks at the job performed and the attained level of competency required for that job. The core is that the perspective moves from "how long" to "what work, and how well."
A point to note in understanding this topic is that "grade system vs. job system" is not merely a matter of HR classification but a structural issue interlocked with the entire cost-estimation system of the SW industry. Because how engineers are classified determines how the contract amount is calculated, a transition in the classification scheme changes at once the money flow of the industry and the structure of incentives for talent. This is why, when treating this topic from a professional engineer's perspective, "classification method," "cost estimation," and "workforce treatment" must be viewed as one.
B. Background
In the past the SW industry estimated labor cost (wage rates) based on the engineer grade system. When calculating the contract amount, the method was to count the grades of the input workforce as "so many experts, so many advanced" and multiply by the per-grade rate. Because grade was cost, the calculation was simple and left little room for dispute, but it carried the fundamental problem of being a seniority-based evaluation in which "how many years worked" stood in for "what one does, and how well."
This problem collides head-on with the nature of the SW occupation. In physical labor, skill generally rises in proportion to accumulated experience, but in software development the variance in productivity and output quality can be several-fold even among people with the same ten years of experience. Distortions arose routinely in which an outstanding junior developer was rated at a lower rate than someone merely ahead in years. Accordingly, in 2012 the government abolished the regulations related to the SW engineer registration system (grade system) and pushed a transition to a job- and competency-centered IT job system.
It is also worth understanding why the grade system could persist for so long. Because cost estimation for public SW projects is directly tied to budgeting and auditing, ordering agencies preferred an objective standard "no one could dispute." Career, education, and qualifications were clear figures verifiable by documents, so the grade system was powerful in terms of administrative convenience. The problem is that this convenience masked the fundamental defect that it "fails to reward ability," and the background of the transition is that, as SW grew into a core national industry, the cost of this defect grew too large to bear any longer.
C. Necessity
The necessity of the IT job system comes from fair reward for expertise. When a highly capable developer is rated below someone merely ahead in years, excellent talent leaves the industry, and the contract cost too diverges from the value actually created. This is a structural problem that goes beyond individual dissatisfaction and leads to a decline in the competitiveness of the entire SW industry.
Job- and competency-based classification is the starting point for correcting such distortions. Instead of "one expert," the buyer can clearly demand the competency needed — for instance, "a senior architect capable of designing cloud architecture" — and reasonably estimate the cost accordingly. Furthermore, it presents the individual with a Career Path such as "junior developer → senior developer → architect/technical leader," giving the motivation to grow by competency rather than seniority. This becomes the foundation for raising the expertise of the industry as a whole.
The IT job system also increases responsiveness to a rapidly shifting technology landscape. Newly emerging jobs such as cloud, AI, and security cannot be evaluated by years of experience alone and must be determined by actual competency. The grade system has no vessel to hold "new jobs" and thus fails to properly reward new-technology talent, but a job- and competency-based system can absorb technological change by defining new jobs and rating their levels. The faster the pace of industry change, the greater the advantage of competency-centered classification.
2. Concepts and Characteristics of the Grade System and the IT Job System
A. The Concept of the Transition
flowchart LR
G["Grade system<br/>career/education/qualification → beginner/intermediate/advanced/expert"] -->|"competency-centered transition"| J["IT job system<br/>job- and competency-level based"]
G -.->|"simple, objective estimation"| GA["per-grade wage rate"]
J -.->|"reflects expertise"| JA["job- and competency-based cost"]
The figure above shows that the two systems lead to different cost-estimation methods. The grade system extracts cost along the linear path "grade → per-grade wage rate," whereas the job system takes the path "job and competency level → the cost corresponding to it." As the arrows symbolize, the direction of the transition is clear, but the reality is that the cost-estimation path shown by the dashed lines has not yet been sufficiently laid down.
The grade system had the clear advantage of computational convenience. Because grades are assigned from the objective data of career, education, and certifications, estimation is easy, and disputes between buyer and supplier were few. In environments where transparency and audit responsiveness matter, such as public procurement, this clarity was long preferred. But this clarity comes at the price that "the grade is fixed regardless of the actual quality of the output."
The IT job system, by contrast, looks at the job performed and the competency level required for that job. For example, the international competency framework SFIA (Skills Framework for the Information Age) divides jobs into several categories and defines, for each job, the required competencies and skill stages (levels). In Korea, the NCS (National Competency Standards) plays a similar role by specifying competency units and levels for each IT job. Such a system takes as its criterion "what job this person can perform, and at what level."
The shift in perspective is precisely the essence of the system transition. If the grade system is "input-centered," the IT job system is "competency- and performance-centered," which signifies a shift in view that treats SW not as a sum of labor hours but as an expression of professional competency.
The "job" referred to in the IT job system is not a single thing but is subdivided into several branches. Typically IT jobs are divided into planning and consulting, software development (application and system), database, network, information security, IT architecture, and project management, and within each job the level of performance (e.g., junior/senior/lead) is further distinguished. If the grade system placed every developer on a single ladder of grades, the job system is a two-dimensional structure that first distinguishes "what kind of work a person does" and then looks at skill within that. This structure is more refined, but it carries the burden of having to establish criteria for each job.
B. Comparison
| Category | Engineer grade system | IT job system |
|---|---|---|
| Criterion | career/education/qualification → grade (beginner/intermediate/advanced/expert) | classification by job and competency level |
| Perspective | grade of the input workforce (seniority) | job performed and expertise |
| Cost estimation | per-grade wage rate | job- and competency-based rate |
| Advantages | simple, objective estimation; easy to audit | reflects expertise; induces career development |
| Disadvantages | seniority-based; does not reflect competency | poor field adoption; lack of criteria |
What deserves attention in the table is that the pros and cons of the two systems are precisely in trade-off. The grade system's greatest advantage, "simple and objective," is exactly the IT job system's weakness (lack of criteria, difficulty of evaluation), and the IT job system's advantage, "reflects expertise," is exactly the grade system's weakness (seniority). Because of this trade-off structure, the transition cannot be accomplished at a single stroke, and the "gap between the system and the field" examined below arises.
C. A Concrete Situational Example
Let us look at how the difference reveals itself in practice through two situations. First, suppose there is an outstanding developer with five years of experience. Under the grade system this person is fixed as "intermediate" by years of experience, so even while actually doing expert-level architecture design, they receive only the intermediate rate. Conversely, a mediocre person with fifteen years receives the "expert" rate by seniority alone. This inversion is the typical distortion that drives out excellent talent. Second, from the buyer's perspective, a grade-based demand for "2 experts, 3 advanced" fails to say what competency is needed and why. By contrast, demanding by job and competency — "1 architect capable of designing cloud migration, 2 seniors with MSA development experience" — allows precise procurement of the workforce suited to the project's purpose. Thus the difference between the two systems is not a difference in the format of a rate table but a difference in how accurately the value of the workforce is reflected.
3. Problems with the Current IT Job System
A. The Structure of the Problem
flowchart TD
P["System transition (grade system abolished)"] --> GAP["Gap between system and field"]
GAP --> P1["Void in cost criteria"]
GAP --> P2["Difficulty of competency evaluation"]
GAP --> P3["Lack of awareness and acceptance"]
P1 --> R["Field still keeps grade practices"]
P2 --> R
P3 --> R
As the figure shows, the problems do not exist individually but branch out from a single root, the "gap between the system and the field." The system (abolition of the grade system) ran ahead, but as the execution foundation to support it (cost criteria, competency evaluation, awareness) failed to keep pace, the field remains in old practices. Let us examine the detailed causes one by one.
The core problem is that although the system changed, the field still remains in the grade-system practice. The biggest cause is the void in cost-estimation criteria. The grade system had clear numbers ("so much for expert, so much for advanced," the per-grade wage rate), but the job system's replacement standard rates and criteria have not been sufficiently established. As a result, the buyer still writes grade expressions such as "intermediate or above" in the contract, and the paradox occurs in which grades abolished by the system survive as field practice.
The second cause is the difficulty of competency evaluation. For the IT job system to work, it must be possible to objectively prove that "this person possesses the competency for the job in question," but the standard certification system to underpin this is deficient. Certifications prove the possession of particular knowledge but diverge from actual job-performance competency, and career statements are subjective. With no clear yardstick to measure, the buyer reverts to the easily verifiable old criterion (grade).
The third cause is the lack of awareness and acceptance among buyers and firms. To an ordering official long accustomed to grade-system practice, job- and competency-based ordering is unfamiliar, and they feel there is a risk of audit findings if it is applied incorrectly. Even when the system changes, if the understanding and incentives of the people who execute it are not in place, the field moves by inertia.
These three causes interlock to form a vicious cycle. Because there are no cost criteria the buyer uses grades; because grades are used no demand for competency certification arises; and because competency evaluation does not take root, the basis data to create cost criteria does not accumulate either. Cutting only one link does not complete the transition, and the point that defines both the difficulty of this problem and the direction of improvement is that cost criteria, competency certification, and awareness improvement must be pursued simultaneously to unravel the cycle.
In addition, this problem is entangled with the chronic issues of the SW industry — low-price bidding and the multi-tier subcontracting structure. When cost criteria are ambiguous, the contract amount is easily set low, and that burden descends through the subcontracting tiers, ultimately resulting in worsened treatment of the field engineers. In other words, the failure of the engineer-classification system to take root is not a mere matter of classification but a structural issue linked to the industry-wide distortion of cost and treatment.
B. Summary of Problems
| Problem | Content |
|---|---|
| Poor field adoption | grades still demanded in orders and contracts |
| Confusion in cost criteria | absence/ambiguity of job-system-based wage rates and estimation criteria |
| Difficulty of competency evaluation | deficient system for objective competency measurement and verification |
| Lack of awareness | low understanding and acceptance among buyers and firms |
4. Directions for Improvement
Because the root of the problem is the "gap between the system and the field," improvement too must be substantive measures that fill the gap. A declarative system change alone does not change practice; concrete means are needed to enable the buyer to actually contract by job instead of by grade. The four directions below each target the three causes diagnosed earlier (void in cost criteria, difficulty of competency evaluation, lack of awareness) while focusing on leading the transition without abrupt shock.
First, clearly establish job-system-based cost and wage criteria. For the buyer to demand by job instead of by grade, there must be a basis of "what the market wage for this job is." To this end, the SW project cost-estimation guide should present criteria based on a wage survey by job, and refine estimation methods that reflect project type and difficulty.
A point to note here is that the cost-estimation method itself must also evolve together, from "input-workforce based (man-month)" to "function- and value-based (function points, etc.)." However the workforce is classified, if cost is still calculated only as "so many people × so many days," differences in competency are hard to reflect in cost. Therefore the job-system transition of engineer classification must be interlocked with a paradigm shift in cost estimation to have its full effect. The two reforms are two sides of the same coin.
Second, establish a standard competency framework and certification. Settle standard competency frameworks such as SFIA and NCS to suit domestic conditions, and link them with a career-management system so that "what job this person can perform, and at what level" becomes provable. Only when competency is objectively certified will the buyer contract by job criteria with confidence. Here the certification must not stop at confirming knowledge possession like a certificate, but must be linked to actual project-performance history and results to be effective. Structuring the performance history accumulated in the career-management system by job and level is the starting point for this.
Third, awareness raising and public-sector leadership. Raise officials' understanding through ordering guides and training, but rather than waiting for the private sector to move first, it is more effective for public procurement to apply the job system first and lead the market. When the public sector creates standard contracts and success cases, the private sector follows more easily.
Fourth, a phased transition (soft landing). Because an abrupt transition invites field confusion, map grades to jobs and run them in parallel for a while, then gradually migrate to the job system. For example, a correspondence table such as "expert ≈ senior architect" reduces conflict with existing practice while buying time to adapt to the new criteria.
The four directions correspond exactly to the three links of the vicious cycle seen earlier (cost criteria, competency certification, awareness), and the phased transition connects them along the time axis. In other words, improvement is not a listing of individual measures but a problem of roadmap design — "what first, together with what, at what speed." Practically most important is that the public sector first creates standard contracts and success cases to signal the market, playing the priming role for the whole transition.
| Direction of improvement | Content |
|---|---|
| System reform | clarify job-system-based cost/wage criteria (linked to wage surveys) |
| Competency certification | standard competency frameworks (SFIA·NCS) and certification, linked to a career-management system |
| Awareness raising | ordering guides and training; leading application by the public sector |
| Phased transition | grade-job mapping → parallel operation → migration |
The four directions do not operate independently but reinforce one another. Once cost criteria are set, the buyer has an incentive to demand by job; once competency certification is in place, that demand can be verified; awareness raising and public-sector leadership underpin this; and the phased transition softens the shock. Therefore improvement must be designed from the perspective of "together, in order" rather than "what first" to achieve real effect.
5. Deep Dive: Domestic and International Trends and Linkage with Similar Concepts
The transition from the grade system to the job system is not an event completed at a single point in time but a long-term process in which system, market, and culture move together. Below, the domestic and international trends surrounding this transition, and the similar and linked topics often treated together in the exam and in practice, are organized.
The transition to the IT job system is not a task unique to Korea but touches the universal current of global IT workforce management. SFIA, which began in the UK and is now widely used internationally, has already become a workforce-competency-management standard for numerous firms and governments, and Korea's NCS and the NCS-based hiring and competency-centered hiring policies that use it point in the same direction. That is, the principle of "evaluating people by actual ability rather than education and seniority" is already the trend of the times, and the issue of SW engineer classification is one branch of this larger current.
As similar and linked topics, first there is the SW project cost-estimation system. Because the engineer-classification method is the basic unit of cost estimation, the grade-to-job transition moves together with the overhaul of the cost-estimation guide. Second, the Software Promotion Act (fully amended in 2020) provides the legal basis for the SW industry ecosystem and the improvement of engineer treatment, and, together with remote development and priority purchase of commercial SW, underpins the improvement of the workforce system. Third, industry structural changes such as improved treatment of SW developers, the 52-hour workweek, and the shift toward commercial SW also form the backdrop for the settling of competency-centered evaluation.
Looking a bit more closely at SFIA clarifies the aim of the IT job system. SFIA divides IT-related competencies into several categories (strategy, design, development, operations, management, etc.) and, for each competency, defines skill levels in several stages from perspectives such as autonomy, influence, complexity, and business contribution. That is, it positions people not by "how many years" but by "how independently, how complex a problem, and over how broad a scope of influence they handle." The refinement of evaluation that the IT job system ultimately pursues is precisely such a multidimensional competency model, and the task is for the domestic system to mature in this direction as well.
Meanwhile, it is also noteworthy that private IT firms already operate their own job/level systems (e.g., developers L1–L5, tracks by job family), practicing competency-based evaluation and reward. If the market already moves by competency while only the public procurement system remains in grade-system practice, that divergence itself acts as pressure for system improvement. Converging the private sector's more advanced practice into public procurement criteria can also be a realistic path to settlement.
From the professional engineer exam's perspective, this topic tends to appear entangled with "SW project cost estimation," "the SW Promotion Act," and "workforce development and treatment improvement." Therefore, in your answer, rather than stopping at a definitional comparison of the grade/job systems, developing it along the logical flow of why the transition is needed (the distortion of seniority) → what the obstacles are (void in cost criteria, difficulty of evaluation) → how to settle it (clarifying cost criteria, competency certification, phased transition) raises the completeness.
As an answer-composition strategy, it is effective to present a table contrasting the two systems in the overview to show the difference at a glance, and then, in the body, compose "current problems → directions for improvement" so that cause and countermeasure form pairs. For example, matching the problem "void in cost criteria" with the countermeasure "cost criteria based on a wage survey by job," and "difficulty of competency evaluation" with "standard competency framework and certification," raises the logical completeness. Finally, presenting in the implications the integrated view that "you cannot fix it by changing the system alone; the ordering culture and audit system must change together" secures the depth of a professional engineer level.
6. Considerations and Implications
- Resolving the gap between system and field is the top priority: However good a classification scheme is, it becomes a dead letter if cost estimation and ordering practice do not support it. Clarifying job-system-based cost criteria is a more urgent task than anything else.
- Transition to a competency-centered culture: A culture of being evaluated by ability rather than seniority must take root for excellent talent to remain in the industry. A parallel approach is needed that changes the organizational and ordering culture (software) along with the system (hardware).
- Legal and institutional consistency: To secure effectiveness, it must be consistently linked with the Software Promotion Act, the SW project cost-estimation guide, and the public SW ordering system. If individual systems act separately, the field suffers only confusion.
- Securing international consistency: Having criteria compatible with international competency frameworks such as SFIA allows response to global workforce mobility, collaboration, and evaluation, which is advantageous on both fronts of domestic talent going abroad and utilizing foreign talent. In an environment where remote collaboration has become routine, the importance of internationally accepted competency criteria grows even greater.
- Gradual, data-based migration: Soft-land through grade-job mapping, but manage it so as not to diverge from market reality by continuously updating criteria based on data such as surveys of wage and demand by job.
- Joint reform with the ordering and audit systems: For the job system to take root, ordering officials must be able to be confident that "contracting by job instead of grade will not be a problem in an audit." The practical key to the system taking root is to lower the officials' risk burden by improving standard ordering documents and evaluation guidelines.
References
- Software Promotion Act (National Law Information Center): https://www.law.go.kr/
- Korea Software Industry Association (KOSA), SW Engineer Career Management and SW Project Cost Estimation: https://www.sw.or.kr/
- SFIA (Skills Framework for the Information Age): https://sfia-online.org/
- National Competency Standards (NCS): https://www.ncs.go.kr/
In one line: SW engineer classification has shifted from a career-based grade system to a job- and competency-based IT job system, but the problem is that it has failed to take root in the field owing to a void in cost criteria, difficulty of competency evaluation, and lack of awareness; the core directions for improvement are clarifying job-system cost criteria, standard competency certification, public-sector leadership, and a phased transition.