Perks and benefits that save employees money in the long run are always a valuable addition to a paycheck. Addition being the keyword here.
Because no amount of pizza parties can supplement the 10% increase in salary that people could get at the other agency across the street. Except, that’s not the case, the statistics surrounding this, point in the exact opposite direction:
- 32% of people polled in the US would take a 10% pay cut to work at a company where they like the culture
- 58% of workers will stay at a lower-paying job if it means having a great boss
- And 60% of workers would even take half of the potential paycheck if it meant working at a job they love
So if culture makes up for the differences in salary between your agency and the agency next door, how do you structure the salaries in your company to both attract and retain top talent?
- Don’t buy stars, build them – Have a partnership with the local media and technical schools that provides internships and part-time positions for promising students. If you follow our onboarding tips and you build a functional onboarding program, after a couple of weeks, your time investment in onboarding them should already be paying you back. And in a few months? You might just have your hands on your newest superstar.
- Have a clear progression path – be upfront and transparent with the salary structure. It will eventually become the biggest motivator for the employees in the lower tiers. If you split your progression path into layers where everyone gets paid the same, you can skip long management discussions like: ’’Is a Senior Backend Developer with 4 years of experience worth the same as a Senior Art Director with 5?’’ An example of how to structure your progression path could be:
- Intern > unpaid, but gaining real-life skills and experience from an agency by working on real projects
- Trainee > paid, part-time or full time; self-taught, certified or freshly graduated
- Apprentice > Same credentials as a trainee, but with some successful commercial projects
- Junior > Proven 1-3 years of experience with commercial projects
- Senior > 3+ years of experience with commercial projects and proficientwith project management and delegating tasks
- Management > If you’re doing linear progression, this step is simple. But if you want to do non-linear progression, it’s worth differentiating at management level. a. Senior members with multiple specializations and experience with managing teams b. Senior members with extra non-managerial responsibilities (product development, decision making, etc.)
- Equity tier > Management whose investment with the company is substantial enough to warrant equity in the company
- Promotions, raises and employees who feel undervalued – if you adopt the aforementioned salary structure, your employees should have a clear overview of where they fall and what they need to achieve to move up to the next salary level. But as it goes with highly ambitious people, you will always have individuals who take on more than their fair share of responsibility and then don’t feel adequately compensated. The answer should be obvious. If the employee performs above the set expectations, has the data to back it up, and asks for an increase in pay, they should get one. Sadly, when working with more than one person, it will never be that easy. Ben Horowitz summed it up the best in his class on Y combinator – how to start a startup.
A point he brings up is: If you give that employee a raise, will you give everyone else who is also performing well a raise as well? What about the employees who are performing just as well, but their personality prevents them from asking directly?
Apart from being approachable overall, managers and senior agency members can adopt these two methods to focus these conversations and help employees feel more valued and heard:
1. Monthly walk and talk:A manager and employee go for a half-hour walk outside of the office, talking about current projects, plans for future projects, the progress of the employee and any problems they might be having
2. Yearly progress conversation: Performance reviews are usually seen as a negative process because of the negative associations that people usually have with them. Walk and talks remove the need for quarterly performance reviews at a scary meeting room table.
But a walk and talk is not really the place to sign contracts and obsess over spreadsheets. So how about a yearly progress review, close to the end of the year, talking strictly about the employee’s progression path and salary?
That way, both current problems can be addressed from month to month, and larger issues or achievements can be accumulated over time.