Build A Sustainable, Competitive, and Equitable Compensation Program
By Marissa McNeil
Your team needs a tech role filled ASAP. You have a great candidate, but their salary requirements are well out of the range for the role. Now you’re faced with an all too common dilemma: do you acquiesce to the salary demands, putting internal equity and/or budget parameters at risk? Or do you tell the person you can’t meet their salary requirements, knowing that you needed this position filled yesterday and that you could lose a great candidate? With a situation like this one, it seems like there’s no way to hold true to internal equity, budget parameters, and market competitiveness all at the same time.
At Edgility, we are all too aware of the systemic inequities present in the labor market, continuously overvaluing roles in fields held by those in dominant groups (e.g., technology, marketing, construction), while significantly undervaluing roles historically held by women and people of color (e.g., education, nonprofit, mental health). Organizations inadvertently perpetuate these gaps without intentional intervention and reimagined strategies. Equity minded leaders want to ensure internal parity with compensation. At the same time, some roles are in much higher demand in the marketplace, making for tough decisions for leaders.
Here’s what clients share as existing solutions:
- Option 1: Pay a premium for ultra competitive roles. While this will ensure you get top talent, it’s risking perpetuating the continuation of historical market inequities, as well as potentially risking financial sustainability and internal equity.
- Option 2: Keep roles internally equitable, keeping your organization in line with its values. This comes with a risk of losing top talent and/or roles staying unfilled due to other companies that will pay the premium that the market suggests.
Both options seem to present an organization with an undesirable set of tradeoffs that make the benefits come at potentially too high a cost. Is there a way to remain externally competitive while actively fighting against the perpetuation of role pay inequity in the labor market that continues to disadvantage women and people of color?
There is a third way. At Edgility, we work with organizations to build salary structures that recognize market realities with an emphasis on internal equity. We do this through market and job description analysis to create salary ranges across sets of roles with similar organizational impact and management scope rather than individual salary ranges for every role in the organization.
For instance, if a marketing associate and a curriculum development associate contribute similarly in terms of expectations for the role, overall organizational impact, and management scope, why should their pay be significantly different?
Simplifying an organization’s salary structure enables greater attention to equity while still differentiating between roles that have varying levels of responsibility. For roles that are true outliers (i.e., they require advanced and specialized training and/or skill sets), they can receive a special designation in the structure that accounts for this.
There are a number of ways Edgility coaches organizations to lean into their values while also securing top talent without sacrificing the integrity of the internal structure. We advise organizations to share the rationale and criteria with all staff so that the considerations are clear, transparent, consistent and inclusive. This takes the guesswork out of salaries for staff and managers, which also generates greater trust.
We have worked with a wide range of organizations, (international, EdTech, and SaaS), that see great variation in market pay across their roles. In companies where education and curriculum expertise is just as critical to organizational success as the technology and software itself, some form of internal parity must be reached in order to ensure all staff feel valued and organizations live out the principles they espouse.
As a result of our client engagements with organizations that fit into these categories, we have a Net Promoter Score average of extremely likely to the question, “How likely are you to recommend Edgility to a friend or colleague?”
We can partner with you to generate customized solutions for your organization to the question, “How can we build a compensation structure that prioritizes internal equity and allows us to attract and retain top talent in competitive markets while remaining financially sustainable?” Contact us to learn how.