7.4 KiB
Salary talks
Quick history lesson. This is how we did the very first round of company wide salary raises at Blendle:
How to do company wide salary raises at a startup (for the first time).
The process today is pretty similar, with one big difference: you are at the center of it.
No stress, you are at the center but not alone, we got your back. Starting with answering the most important questions one by one and giving you the context you need.
-
Who is in the lead?
You as a lead are in the center of all this because you get the questions and you have the best 'view' and therefore the ability to decide.
Rick and Alex (with help from HR) eventually decide. They guard the overall salary house and make sure our costs (and growth of that costs) are budgeted and taken into account when thinking about runway. They will also come up with a structure and budget and range for the raises in January.
-
How do we determine someone's salary in the first place?
We weigh up several variables:
-
Benchmark: internal and external.
The most accurate way to determine the range where someone should be is comparing someone with a peer internally. During the hiring process you find out at what level someone is and you'll be able to compare him or her internally. Who would you compare this person to in terms of level? Is he/she better than X? If you notice that everyone is not as good as the people we have, but are paid more: think about raising the salary of our people. Keep in mind that - especially in tech - the market is on tilt. Big corporate pay a lot of money to even mediocare people in tech. We don't want to compete with them and that is a choice for new hires to make.
-
Classic figures: experience, education, specific knowledge and expertise.
This is a bit old school in a way, but also at Blendle there is a difference between someone who is a starter with no experience or someone with 8 years of experience. For some jobs/roles we need certain skills, expertise or even education. This always comes with a price tag.
-
Scarcity & market value.
It's fair to say that it's harder to fill some positions compared to some other roles. Good people are always hard to find, but we have to take into account that certain disciplines are paid a bit more because of what the market does.
-
Role and responsibilities.
Certain roles and people make more impact than others. This is reflected in pay.
-
Actual impact and contribution
Since we don't really like job titles, it's good to look at someone's actual impact and contribution. What difference will this person make or is this person really making? Can we try to put that in numbers or concrete projects?
-
Someone's starting point
If we hire new people, they will have a job. To get them to work at Blendle, we need to offer a competitive salary. We have to take this into account.
Note: all of this is not an exact science and is determined together, so please: ask for help.
-
-
When do we talk about money?
-
- Yearly company wide salary raises in January
Every year (in January) we take a good look at all the salaries at Blendle. Right after the feedback cycle (which we use as input) we have salary talks with everyone. We chose to do this once a year so we don't have a constant conversation about money through the year. We don't think a contract renewal (which is basically just paperwork) should be the moment to talk about money. Mainly because you don't want people to say: give me X or I walk. People can quit any time they want and bring up salary any moment they want, just not as a tactic combined with renewing a contract.
-
- Colleague brings it up her/himself
We don't want people to be unhappy about something stupid like money, so we want people to tell us if they are unhappy with their pay. We take everybody seriously if they feel like their pay is too low (or too high). We do ask people to come with arguments so we can have an actual talk. More than just: I want more money. You as a lead are the one they will come to with these questions. You are in the lead of coming up with a good answer and making sure someone is happy with that answer (even if it's a no).
-
- We bring it up, adhoc.
With 'we', we mean anyone from Blendle who isn't the person in question. Could be you, a senior colleague, Jean, Rick, Alex or HR.
-
-
Should we raise, yes or no?
This question mainly applies to the last two situations, because we review everyone in January.
Good reasons to raise:
- Drastic change in role and responsibilities. You can use the matrix to pin this down together.
- Very steep learning curve which makes current pay unfair for someone's impact and capabilities. It's important to be able to quantify that curve.
- New information internally or externally.
- New information by benchmarking studies or during hiring.
Note: notice how important the feedback cycle, continuous feedback, 1on1's, feedback from peers and personal goals are in all this 🙂?
Not so good reasons to give a raise
- Colleague got another offer and uses this to get a raise.
- 'I earn X for this company, that's a lot of money, I want a piece of the pie'.
- Colleague just wants an incentive to stay. Money is never the answer, because it will fade - very - fast.
-
How much should we raise?
Again in January, Rick & Alex will work together with HR to come up with a solid structure and range which will guide you through the process. This mainly applies to ad hoc raises.
If you decide that it is a good idea to raise (disregarding who took the initiative) the reasoning behind it is a good starting point.
If you take the four reasons we mentioned above:
-
Drastic change in role and responsibilites or very steep learning curve: consider raising someone in the range of 0-5% or see if the 'new role' is comparable with someone in the company and let go of the range if needed.
-
New information.
Externally: N=1, so make sure to gather enough intel. Benchmark studies always end up giving a pretty wide range (up to €1000), so it's hard to apply this to an individual situation.
Internally it's most important that people are paid fairly compared to each other.
-
-
Control questions
Now before you finally decide
- If we had to hire someone today for X's job, what would we pay them?
- What would it cost Blendle as a business to find a new person (hard to replace, scarcity, time to hire, impact on day to day business & product)?
- Giving a raise to an individual changes the salary house, so keep that in mind when you decide on a raise. Does this apply to more people?
Work at Blendle
If you want to work at Blendle you can check our job ads here. If you want to be kept in the loop about Blendle, you can sign up for our behind the scenes newsletter.