Like it or not, what you pay people is personal. What you get paid can feel like an assessment of what you’re worth. And while this can be a very loaded topic, we try to keep things clear and equitable at Help Scout so our entire team feels valued.
Think about it like this: If you inadvertently shared a spreadsheet with everyone’s salary with the whole company, could you stand by it with a sound explanation as to why people get paid what they do compared to each other and to market data?
If the answer is no, you have work to do. At Help Scout, we strive to answer that question with a confident yes.
5 ways to nail your employee compensation strategy
Compensation is complicated, and it can get messy when you don’t have a good plan in place. It impacts every person on your team — not to mention those future hires you have your eye on.
Here are several approaches we’ve taken and lessons we’ve learned along the way that will give you a good start when you dive into creating (or improving) your employee compensation strategy.
1. Dig for that data
First things first: Round up some data! Plenty of resources out there (such as Radford, Payscale, and Glassdoor) offer compensation data, and some of them, like Culpepper, offer a price break for new and emerging companies.
It’s a lot of work (and not always possible) to match roles to the surveys, but it’s worth it to see what percentile you’re paying compared to other companies of a similar size, region, funding stage, or revenue amount.
At Help Scout, we use Payscale and Option Impact as our main research tools. We benchmark our salaries against technology companies in the Boston metropolitan area, and we aim to pay between the 75th and 90th percentiles.
We do not adjust or differentiate pay based on where you live in the world. In other words, everyone at Help Scout at the same level in the same role will earn the same, whether they live in San Francisco, Toronto, or Prague.
2. Form a framework
We love constraints at Help Scout, and our salary matrix is one of our self-imposed constraints. It helps hold us accountable to our team with a structure that’s fair and transparent. It also prevents us from picking numbers out of thin air when making offers to candidates.
A handful of companies take the transparency a level further and share what each specific team member makes; we don’t do that, but our salary matrix numbers are available internally for team members to see.
Help Scout’s salary matrix is made of six levels (1-6) and five bands (A-E), and each team (engineering, marketing, finance, etc.) has their own matrix:
|Band A||Band B||Band C||Band D||Band E|
|Level 1||Lowest salary|
|Level 6||Highest salary|
A mid-level marketer might be hired at Level 2, Band D, and then move to the next level as their skills improve.
Each of the six levels are broadly defined across the company, including competencies we’d like to see at each level. For example, we think of a Level 2 as someone early in their career but with a few years of solid experience. Level 3 includes more senior individual contributors, as well as coaches (what we call managers at Help Scout). And so on.
Each team then takes the broadly defined levels and competencies, and then they develop role-specific career pathing backbones.
For example, below is how we define level 2C, an early-career individual contributor, at the company level. The marketing team would take this a step further to describe what a small project is for, say, a growth marketer or a product marketer. We want everyone to understand what it takes to move forward in their career and know what’s required to get there.
- You can complete a wide range of tasks with minimal oversight.
- Your work directly impacts your team — and potentially a few others where projects overlap.
- Your impact is felt on small projects where you maintain existing processes or features under decreasing guidance.
- You can be an informal mentor to newer members of the team.
- You start to identify the problem, as well as the solution.
- You are resourceful and you know where to look for answers.
- You can review work of newer team members and make small suggestions.
- You get excited about a particular topic, and you can use your knowledge to teach the team.
We don’t conduct annual performance reviews. Career progression is measured by milestones that individual contributors and managers map out together and revisit on a regular basis in one-on-ones.
Moving up to the next band can happen whenever the person has consistently demonstrated the behaviors at the next band.
There is not an expectation that people will level up every single year. Sometimes, people move up several bands in one year. Other times, people stay at the same level/band for more than a year.
3. Align your compensation strategy with your company values
Each role has a different scale and matrix associated with it that roughly maps back to market rate salaries. This is where you can be opinionated as a company, and this is where we’ve learned that compensation is an art, not a science.
As a company, you have the power to decide when you want to be influenced by the market and when you want to disrupt the market, since we’re also working against systems of historical injustice.
For example, at Help Scout, we pay above-market rates for our customer support roles because we believe this function is wildly undervalued, under-resourced, and under-utilized in most businesses — and is a key component of our success.
With a more purposeful and opinionated approach, you’ll more easily find values-aligned, talented people that meet your needs — and they’ll be paid properly.
4. Be purposeful with perks
A lot of perks out there are designed to pull people into an office or keep them working longer hours — like free food, games, gyms on site, and so on. And now that more companies are transitioning to and staying remote-first, offering meaningful benefits that aren’t just office-based is critical.
Like Patty McCord says in Powerful: Building a Culture of Freedom and Responsibility:
“People’s happiness in their work is not about gourmet salads or sleeping pods or foosball tables. True and abiding happiness in work comes from being deeply engaged in solving a problem with talented people you know are also deeply engaged in solving it, and from knowing that the customer loves the product or service you all have worked so hard to make.”
Help Scout is not a family. It’s a group of values-aligned people who want to do great work together, then log off and return to their families, friends, side-hustles, and hobbies.
We want people to feel empowered to do their best work while being fully supported, so our benefits include things like a “learn something” stipend, professional coaching sessions, home-office stipends, and equal paid parental leave for all new parents, including adoption and foster care.
We’ve chosen to be as generous as possible when it comes to fully covering our employees’ and their families’ basic needs. We offer 100% coverage on monthly healthcare and dental premiums, pay for long-term and short-term disability insurance, and offer a basic life insurance policy. We also have a 401K match and a Flexible Spending Plan.
We regularly revisit our benefits offerings and try to improve upon them whenever we can, but you’ll never see any foosball tables on that list.
In addition to perks, bonuses are another tool that you may consider adding to your compensation strategy. In early 2021, Help Scout introduced a company-wide bonus plan for the first time. We landed on the same percentage target bonus for everyone based on whether we are on target to hit quarterly revenue goals.
Since this our first go at including bonuses, we wanted to keep the strategy simple. Your company may take an alternative approach, such as individual performance-based bonuses, bonuses based on team goals, or something else entirely.
The money you spend on benefits, perks, and bonuses is a piece of the compensation puzzle, and what you decide to spend it on reflects your values as a company. Choose wisely, and you’ll attract candidates who value what you value.
5. Expect change
The market is shifting as we speak, and the competition for amazing talent is only getting harder. You don’t want to miss out on great teammates because you haven’t been thoughtful about your compensation philosophy, and believe us, candidates will be asking about it.
As we’ve gathered more data and grown in company size, we’ve been able to shift our salary matrix to help promote growth in all areas and roles while still maintaining consistency.
When it comes to compensation, keep an open mind and expect it to evolve. If you lead with your values, leverage the data, and share openly with your team, you’ll be more likely to land on a strategy that feels fair and inspiring.