When organizations get into high growth phase, everything starts moving faster. Recruiting speeds up. Finding people desks to sit in rapidly becomes an unsolvable puzzle. Making sure every incoming person has a set-up complete with computer becomes a greater challenge. All the moving pieces that are tough to keep up with on a good day suddenly run the risk of falling through the cracks. Compensation is another thing you have to get right as you scale quickly. So how can you make sure you’re getting the comp equivalent of the right set-up as you grow?
Start with a Plan
If you don’t have a plan, it becomes nearly impossible to keep up on all the comp details that have to be decided, approved, offered, accepted, and submitted to payroll. Your plan should include:
- Philosophy – Overall, what is your organization trying to accomplish with its compensation dollars? Having your philosophy buttoned up not only helps to guide all other comp decisions, but it becomes the PR for your current and incoming employees. Are you seeking to be an employer of choice?
- Strategy – How do you plan to operationalize your plan? What markets do you compete with for talent? Knowing your market enables you to quickly acquire data on the market value of your new jobs. Also, depending on your choices, this may provide another place to brag both internally and externally to candidates.
- Guidelines or Structure – If you intend to grow fairly quickly, having grades and ranges in place will make it easier to slot jobs into that structure as you add them. From a communication standpoint, telling employees and candidates that you have a pay structure demonstrates that you take compensation seriously, you’ve done your homework, and you can easily point out their potential career progression.
- Policies – Many growing organizations haven’t stopped to document their policies yet, but do yourself this favor. Once you develop—and get your execs to agree to—some basic compensation policies about where people enter salary ranges, how they move through and between ranges, and what happens in the case of promotion or demotion, you’ll be better poised to make some quick smart decisions.
- Processes – As one colleague says, be good to your future self. Put some thought into how you expect to handle various situations now, so that when you’re in the middle of the chaos, you have an established plan of action. For example: adding a new job, requesting a promotion, budgeting, completing performance reviews, calculating increases, and updating your comp plan.
Think about the full compensation package. Typically, cash gets tied up during high growth. What can you do with incentive comp? Stocks? How about other perks of your workplace? Is there clear room for advancement in your organization?
In lieu of cash, many organizations are turning to what we, at PayScale, call workplace currency. These are all of the things that have value to employees, but aren’t necessarily monetary in nature. Consider what motivates your employees. This can include alternative perks, FTE preference, staggered increases, PTO, work assignment or special projects, and development opportunities. Think about the systems and programs you can have in place in order to retain and attract the people who are going to get you to that next level.
When companies are planning to grow, they reserve cash and make targeted expenditures for a period of time before the floodgates open and they rush forward. Managing comp during growth should work much in the same fashion. Take some time up front to prepare and plan. Much like your other investments, your systemic investment in all areas of your compensation plan will pay off exponentially when the world starts spinning faster.
And if, like most growing companies, you find yourself in it before you had the chance to plan for it, there’s no rule saying you have to rush forward blindly. Stop for a week, lay out your framework, and then grow forth in a calm and measured fashion.
It’s Time to Put this to Action
Need some guidance to make your compensation strategy better as the organization changes? Be sure to attend PayScale’s upcoming webinars for expert advice and resources.