© 2005 Johanna Rothman.
Compensation isn't just about money; for some workers, it's about a job that satisfies them in other ways. Discover their interests and you just might save on salary.
One of the toughest problems facing hiring managers is determining a fair and reasonable offer. Offer too little money and a candidate will reject it. Offer too much money and you may have to deal with parity and discrimination problems among already-employed staff. So what's a poor hiring manager to do?
First, remember that for knowledge work, people work for more than just money. In the software industry, people take jobs (and stay at jobs) when the work is interesting, when they have the respect of the peers, and sometimes when there are enough other perks to make the salary acceptable.
When you're considering how to create an offer, consider these pieces of the offer puzzle:
- What's a reasonable salary for the job?
- What could you offer to make the work more interesting?
- What career growth can offer the candidate?
- Are there other perks that would benefit the company as much as they would benefit the candidate?
Define a reasonable salary for the open position
Before you know what else you could offer a candidate, determine a reasonable salary for your position. Consider using an online salary comparator, such as salary.com, so you can compare salaries in your geographical area with comparable organizations (e.g. size, public/private, type of product). If you need more specific benchmarking data, consider one of the salary benchmarking products, such as Radford.
You may not be in a position to pay a candidate the higher end of the salary range. So if you want to attract more qualified candidates, start with ideas that will make the work more interesting.
Define what else can make the work more interesting
Unfortunately, when many senior managers hear “make the work more interesting,” they think of “more work.” Don't make that mistake. More work is not the same as making the work more interesting. You can make the work more interesting by altering the environment, for example, or altering the job requirements. In the software industry, many companies are experimenting with Agile techniques (see below), such as pair programming. (Pair-work makes the work more interesting -sometimes more challenging too). So, you may be able to use something about the work environment to present the job as more interesting to candidates in knowledge fields.
You may also be able to refine the position based on a candidate's qualifications. I once worked with a technical writer who became a product architect. She had domain expertise in the product area, and was able to shape the product's architecture. This is another example of making the job itself more interesting.
Define career growth opportunities
In my experience, employees like to learn. But employees may have a very narrow view of learning, such as taking night classes. So I like to offer alternative techniques to offer career growth possibilities to a candidate. I include conferences (local and remote), workshops, a book allowance, tuition reimbursement, or anything else that may help the candidate or employee increase his or her value to the organization.
Conferences can be expensive, so you may need to put a cap on the budget for each conference, or on the number of conferences each year. One technique I've applied successfully involves using a percentage of an employee's salary as a conference allowance. But I encourage the employee to select the conference(s) of his or her choice. I've encouraged my clients to allow their employees to choose highly academic conferences, highly technical conferences, and conferences that explore human interaction at work. One of my clients almost sneered at the human interaction conference-until the employee returned with a whole new way of looking at the world.
Look for ways to give candidates what they want
Some candidates want to work in another country; others want to devote part of their time to community service projects. If such things aren't a fit for you, consider emulating Google's 20% policy. Each week, employees work on something for one day that's not part of their regular tasks. Sometimes, those ideas become prototypes for new products, sometimes they don't. But people have a chance to work on something challenging that will help them learn something new.
Sometimes, people want something that seems difficult to provide. Early in my management career, I was faced with a decision: hire an incredible software engineer who wanted to take the summer off every year or decline to hire him? Luckily, my boss at the time was wiser than I. My boss said, “Do you think you could get as much work out of him in nine months than another person would provide in a year? ” I said yes. He replied, “So that really means you'll be paying him a 9-month salary for 12 months of work. Think you can manage that?” You bet I could.
If you hire candidates during the summer or around the holidays, they may already have vacations planned. I've always found it easy to offer time off without pay, to accommodate any already-planned vacations.
Salary is only part of compensation. When you think “compensation package,” keep those creative juices flowing, so that you think of more than just money and traditional benefits. You'll be taking an opportunity to turn a qualified candidate into a valuable and loyal employee.
A Little Information About Agile Techniques
In the software industry, we've experimented with many techniques of performing the work of product development so that project teams could meet their schedule, budget, and feature objectives. But it hasn't been easy.
A few years ago, the Agile movement was born. Agile techniques are those time-tested techniques that allow the project team to continually add business value to the project as it proceeds. Many projects use these techniques, such as continuous integration, whether the project teams consider themselves Agile or not. Other Agile practices are planning projects iteratively; continuously integrating the product; releasing to the team (and possibly the customer) every two-to-four weeks; planning to refactor (clarify and clean up the code); encouraging the team to self-organize; performing retrospectives continuously throughout the project; testing everything, not just the final code; building often; and keeping a customer with the team.
Agile techniques are not the One Right Answer to the problems of software projects. But, especially if you're a hiring manager, and you're seeing people who want some challenge in their work, adopting and adapting Agile techniques to your environment can be a part of the answer to attracting highly competent people without having to go overboard on the money part of compensation.
Like this article? See the other articles. Or, look at my workshops, so you can see how to use advice like this where you work.