As you think about building out a team, you’ll want market data to ensure you’re making hires within the right salary bands. It’s much easier to have a conversation with a candidate when you have market data vs. what you’ve just heard from your peers. Creating salary bands with multiple seniority or experience levels early on will help navigate tricky internal equity discussions down the road. Additionally, as you make more senior hires there will be fewer adjustments on both cash compensation and equity.
Develop a compensation structure with preset levels and corresponding bands for salary and equity to minimize subjectivity. Salary.com is a great place to start. Let’s say you need to hire your first Sales Engineer in San Francisco but you don’t know where to start in terms of figuring out how to pay this person. You can look up, by title, what someone in this role makes and then refine further by any of the following: location, years of experience, education and number of direct reports. The results will show different percentiles ranging from 10th to 90th. This makes it very easy to create a salary band for Level 1 of a Sales Engineer, for example, and then build out different levels as the team grows.
Promotions/title changes need to be tied to the salary ranges in corresponding levels or bands. There may be exceptions to the rule. Create an exception process with a clear approval process. Do the hiring manager and the hiring manager’s boss need to be included? HR or Finance? Map it out and make sure the process is clear. The important thing is to make sure the same process is followed every time you go through the compensation and/or promotion process.
Original Publication: Homebrew
Subject: Human Resources