The answer to that question for most companies is all about finding the right balance. Pay too much, and you could set a dangerous precedent that will be difficult to keep up with down the road. Offer too little, and you run the risk of losing that prime candidate to a competitor.
Thekey for expansion stage organizations is to find the proper balance from the very beginning. This is important not only in regards to recruiting top talent, but in retaining them as well and incentives are usually a major factor.
“An effective compensation package, including an incentivized component, will make employees feel their work is valued and encourage them to focus on delivering results.”
Of course, knowing what to pay has a lot to do with where you are, as compensation for sales, marketing and development positions tend to vary by location. For IT companies, it makes sense to test the waters by identifying the some of the top tier tech cities (like Boston, Austin and San Francisco) and using their compensation numbers as a benchmark for new hires with three to five years of experience.
So how do you find that information? Fortunately, there are some great resources online at your disposal. PayScale.com is one site that provides some of the most useful compensation data for North America and beyond. In fact, PayScale founder Joe Giordano has even referred to the service as “the Kelly Blue Book of jobs.” But while a service like PayScale is great for helping employees realize their true worth, it is also an invaluable resource for employers at the expansion stage. As Giordano once told Internet entrepreneur Chris Pirillo:
“We provide this service to employees so they can compare their salaries, and that’s building a database of very interesting information that employers are interested in using to get a good sense of the market for any particular job. And that helps in hiring, as well as budgeting, in organizations.”
Giordino added that since the data is filtered by location, company size and experience, it’s ideal for small-to-midsized organizations when it comes to evaluating salary ranges for new positions. After all, as Giordino puts it, a Vice President of marketing at a small company is unlikely to be paid the same as a VP at Microsoft.
To help simplify the process for expansion stage technology organizations, OpenView and PayScale joined forces to deliver compensation data for the biggest high-tech hubs in the United States.
For an in-depth look at their findings, read the full report on compensation research at the expansion stage.
Photo by: Axel Antas