"How many levels should we have?" is usually the first design question a company asks about its career ladder, and the one argued about longest. The honest answer is: fewer than you think, and enough that people can see progress every year or two.
This article gives you a starting number for a company of 20 to 200 people, a way to test it against your own team, and the signs that you have got it wrong in either direction. It covers every department, not only engineering. For the full method of building a ladder around the levels, see how to build a career ladder.
The short answer
For most companies of 20 to 200 people, four to six levels per track is enough:
| Company size | Levels per track | Why |
|---|---|---|
| Under 20 | 3, or none yet | Everyone knows everyone; write expectations before you write levels |
| 20–50 people | 4 | Junior, mid, senior and one level above senior |
| 50–100 | 5 | Room for a first expert level beyond senior |
| 100–200 | 5–6 | Larger scope at the top: several teams, a whole department |
These are levels per track. If a department has an individual contributor track and a management track, both use the same level numbers, but the management track usually starts at level 3 and covers fewer of them.
The number is not a rule of the market. It follows from two things you can check: how wide a range of experience your team actually covers, and how often people should be able to move up.
Why fewer levels usually work better
Every level you add is a promise: that you can describe, in plain behaviour, how this level differs from the one below, and that two managers would place the same person on the same level. Each extra level makes that promise harder to keep.
With six levels across a range that really holds four, the differences between neighbouring levels shrink to wording — "contributes to" versus "drives", "some" versus "most". Managers read those words differently, so placements drift, and promotions start depending on who your manager is rather than what you do.
Fewer levels also make the ladder easier to maintain. In a company of 50 people, a four-level ladder for each of four departments is sixteen sets of expectations to write and keep current. Six levels make it twenty-four.
Signs you have too few levels
Too few levels is the less common mistake, but it hurts retention.
- Long waits between promotions. If a good performer typically waits more than three years for the next step, people stop believing the ladder describes their growth.
- A wide spread inside one level. Your level 2 includes someone two years out of university and someone with eight years' experience, and everyone knows they are not doing the same job.
- People leave to get the next title. Exit conversations mention that the step from "Senior" to the top level was unreachable.
- Managers invent sub-levels. "Senior 1" and "Senior 2" appear in spreadsheets and pay discussions. That is the team telling you a level is missing.
Signs you have too many
Too many levels is the more common mistake, usually because the ladder was copied from a much larger company.
- You cannot write the difference. If two sentences cannot explain how level 4 differs from level 3, they are one level.
- Empty levels. Nobody in the department is at level 6 or 7 and nobody will be within two years. Empty levels describe a company you are not yet.
- Promotions every year by default. When levels are thin, managers promote to show progress, and the levels lose meaning.
- Calibration takes hours. If most calibration time goes into deciding between neighbouring levels, the boundaries are too fine.
How to choose the number for your company
Work it out per department, then align the numbers across departments.
1. List the range you actually have. Write down every person in the department with the scope of their work today. Who is the most junior? Who has the widest influence? That spread, not the market, sets the minimum number of levels.
2. Find the natural clusters. Group people whose work is genuinely similar in scope and independence. Most departments of 8 to 30 people fall into three to five clusters. Each cluster is a candidate level.
3. Add one level above, if you need it. If your best people are already at the top of the range, write one level above them, so there is somewhere to grow. Do not write two.
4. Check the pace. A useful rule of thumb: early levels take one to two years to move through, senior levels two to four. Multiply out the number of levels; if a strong performer could reach the top within five years, you probably have too few. If nobody could reach it within fifteen, you probably have too many.
5. Apply the difference test. For each pair of neighbouring levels, write two sentences that describe the difference in behaviour, not in adjectives. If you cannot, merge them.
6. Align across departments. Use the same level numbers to mean the same scope everywhere. Some departments will not use every level, and that is fine.
The level count is also what everything else hangs on: each level gets a role, and each role needs expectations described for every competency. Once the number is settled, those expectations are where the real work starts.
Levels by department
Different departments cover different ranges, so the number often differs inside one company. A typical picture at a 50 to 150-person company:
| Department | Individual contributor levels | Management track starts at |
|---|---|---|
| Engineering | 5 | Level 3 |
| Product and design | 4–5 | Level 3 or 4 |
| Sales | 4 | Level 3 |
| Customer support | 3–4 | Level 3 |
| Marketing | 4 | Level 3 |
| Data and analytics | 4 | Level 3 or 4 |
A few notes on the less obvious cases:
- Support often needs fewer levels than people expect. The step from first-line agent to specialist is large, the step beyond senior is rare. The customer support template has five levels, the top two of them leadership roles; most small teams start with fewer.
- Sales levels should follow the complexity of deals, not quota size. The account executive template shows four levels sized that way.
- Engineering usually needs the most room at the top, because expert roles such as Staff and Principal carry scope that is neither management nor "senior with more years". The software engineer template has five.
- Small specialist teams — a three-person data team, say — can use a short ladder of three levels and borrow the upper levels from a neighbouring department until someone needs them. Trim the five levels of the data analyst template to the ones you need today.
Whatever the count, the management track needs its own careful thought. The guide to the dual career ladder covers how to line the two tracks up.
Example: a 120-person company
A 120-person company has 45 engineers, 20 in sales, 15 in support, 12 in product and design, and the rest across marketing, finance and operations.
Engineering lists its 45 people and finds five clear clusters: new joiners, solid independent engineers, seniors who lead projects, two people who shape architecture across teams, and one who sets technical direction for the whole department. Five levels, management starting at level 3.
Sales finds three clusters: new account executives, experienced ones handling mid-sized deals, and two who handle the largest and most complex deals. It adds one level above the top cluster to give those two somewhere to grow: four levels.
Support has two clear clusters and one person who is clearly beyond both. Three levels, with a fourth written later once more people reach the third.
Alignment. The leadership team checks that a level 3 in each department carries comparable scope: someone who works independently, leads pieces of work and helps others. The numbers line up, even though the departments use four, five and three levels.
A year later, support has grown to 25 people and three of them are clearly working beyond level 3. The department writes level 4 from what those three actually do and promotes them through the usual process.
Adding or removing a level later
The number is not permanent, but changing it is disruptive, so do it deliberately.
Adding a level at the top is easy: nobody moves, and the new level is described from what the people about to reach it are already doing. This is the most common change as a company grows.
Adding a level in the middle is harder, because it changes what existing levels mean. Prefer to add at the top and leave the lower levels alone.
Removing a level — merging two thin ones — is a good correction if you started with too many. Map people from both into the merged level, keep titles stable for a transition period, and say clearly that nobody's pay goes down.
Whichever you do, record what changed and from when, so that promotion decisions in the transition are judged against the right version. If you also run promotions through a written case, the guide to a fair promotion process covers how to handle cases that straddle a change. In LadderKit, roles sit on the levels of each department's career ladder, and the skills matrix holds what each role is expected to do — a reminder that a level is only as real as the expectations written for it.