I have this dream to get my own testing consultancy going in few years. Find good thinkers, find clients in need of smart testing, do the right thing... nothing fancy, just good ol' testing. There are plenty of challenges ahead of me on the way to this dream (it's not even a SMART goal yet), of course, but from time to time I like to think about little details as if I was already there.
Today I got to this: how would I organize payment system in my dream company?
I've been in the industry for almost 11 years now, and everywhere I see more or less similar picture:
- people get hired from outside - vs promoting capable people on the inside;
- a newly hired specialist gets higher salary that someone on a similar position who's already working for the company;
- companies don't work hard enough to keep their people as they consider them easily replaceable.
Now, I don't know about you, but to me it seems unfair and straight dumb. IT is an industry mostly getting its profit from innovation, and people are the basic material making that profit possible. People are important. Software company is not a factory! It can never work as a factory for a very simple reason: factories deal with repetitive tasks, whereas software development always deals with new tasks in a constantly changing environment.
An equally simple fact follows: if you want to be successful, you cannot treat people who work for you as replaceable parts of the system. It means both high expectations and high rewards.
So, going back to the initial problem... this is what I'm thinking to apply to my future business:
- a newly hired specialist will get salary not higher than someone already working in the company who is doing the same job. Which automatically means that salaries for anyone inside the company are at least on par with the market;
- all salary levels will be transparent as well as requirements for moving between those levels;
- structure of profits and spends will be available for anyone inside the company to see and comment on;
- when we need someone to fill a position inside the company with the higher level of competence than there already exists, we would first look for anyone who is ready to upskill and take it as a challenge inside the company.
I strongly believe that if a company wants loyalty, it has to be loyal to its employees first. And it also makes perfect commercial sense to me: the more happy, motivated and high qualified people I gather - the more efficient and high quality work we can do, the more happy clients will be, the more clients will want us. Profit!
So, does anyone think my payment rules would work? Do you think it's fair? Would you like to work in a company with rules like these? Do not hesitate to tell me if you think that's an awful idea.
I am particularly fond of these two ideas :)
ReplyDelete- when we need someone to fill a position inside the company with the higher level of competence than there already exists, we would first look for anyone who is ready to upskill and take it as a challenge inside the company.
- a newly hired specialist will get salary not higher than someone already working in the company who is doing the same job. Which automatically means that salaries for anyone inside the company are at least on par with the market;
Can I ask, why do you think this is currently not the case in a lot of companies?
Thanks, Nicola. :-)
DeleteI go by personal experience, experience of people I worked with, and by extrapolation top-down (if best smartest companies do underpay their people this way, worser companies probably do that too). Also, I got few people in twitter and other places trying to prove that my rules are bound to fail because of how market works.
Yeah I saw on Twitter your blog post sparked some 160 character discussion!
DeleteDid you look at that article that Shirley talked about for Buffer? It's interesting how salary could be calculated based on a formula
Hi Nicola, can I post my answer to your question here?
DeleteA lot of the companies don't want and don't need brightest IT people, they just need good ones and better replaceable ones.
As a company owner the last thing you want is to depend on some IT guys who you even can't understand when they are talking. Who's work performance and ROI you hardly can measure.
As a company owner you are doing a business. In average profits today and tomorrow are the topmost priories for you:
- you don't want to pay you employees more money then they already happy to work for. Here is yours today's profit;
- you don't mind to invest a little bit to have a new guy from outside slightly better than average on the market so you offer a little higher salary thinking about the profit for tomorrow;
Dat's why there are companies who move the IT-world forward, and companies who get by. :-) As a bright IT person myself I don't really want to work for the second kind, so I guess it's fair if you are right. They don't want us, we don't want them.
DeleteThat's right, not all companies earn money in moving of IT world and we always need to be smart deciding how we are with (and why).
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