Salary Transparency — Shining a light on salaries
In general when we start mentioning the transparency at Alan, our candidates nod their heads somewhat absentmindedly, their eyes glazing over. But when we carry on to say that, in fact, everyone knows the salary of everyone else, we know we’ve definitely caught their attention. Money talks, right? Let us tell you more….
It’s not negotiable.
During the recruitment process at Alan, there is no room for negotiation when it comes to salary. You can ask early on in the process what we expect your salary might be, but that’s it. The reason being, we base our salary calculations on two factors: years of experience and what we call the “level”.
Years of experience is an objective data point. We believe experience should be rewarded, so the more experience you have, the higher your salary, because we believe you have more to teach us.
The level is a less objective measure. It’s the evaluation of your impact. Since it is harder to accurately quantify, we take several precautions to ensure we are as fair as possible:
- The level is a collective decision determined by a group of interviewers.
- It is decided as we go through the interview process.
- When there is no unanimous decision, we default to choosing the lower level, leaving room for the person to grow.
Our Salary Grid
Let’s take a look at it in practice. Essentially you cross reference your years of experience with your level to have an indication of your salary.
The level depends on your career path and your skills. To give you an idea, we have Product Designers at level E, User Care Experts at B0 etc. Here is the level grid for Software engineers as an example.
People’s expertise and skills develop during their career. We recognise this by raising salaries. There are two types of salary increases at Alan:
As time goes by….
Just as we reward years of experience before you’re hired, the same goes for once you have joined Alan. The longer you stay with us, the higher your salary will become. It’s not rocket science!
It is also possible that your results surpass the expectations associated with your level. In which case, based on the recognition from your peers, your level can be reviewed and raised! 🥳 Which means the expectations regarding your impact increases, as does the financial reward that goes with it.
So when you join Alan, you receive a salary based on your experience and your level. This levelling also gives you the right to a certain number of company Stock Options. The higher the level, the more stock options you can receive, and, you can also receive additional Stock Options when you are promoted.
So tell me, my friend, what on earth are these Stock Options you’re talking about?
Quick lesson on Stock Options
All things going well, our plan of world domination will work out and Alan will be worth a fair bit of money. This money will be divided into shares. What we offer you when you join Alan is an option on these shares, which we reserve the right for you to buy, at a pre-agreed advantageous price called the “Strike price”.
For example, you have 1000 Stock Options as part of your package, with a strike price of 100 euros per share. 5 years later, this share is listed on the stock market and is worth 5000 euros. You can exercise your Stock Option by paying 100,000 euros to buy your 1000 shares, which are worth …. 5 million euros 🤑
And what’s more, if for some reason our paths should separate, you won’t lose these rights. If you leave Alan, you have 7 years to exercise your Stock Options, compared to the market average of 90 days. Which is great as you don’t need to gather all your funds to buy the Alan shares straight away, especially without knowing what the share is worth (yes we really have thought of everything 😌)
This brief explanation is made much clearer by our Finance expert Maryam in this video:
And here is the current grid in all its glory (last updated 26th April 2021)
Please note, the figures above are indicative only, and have no monetary value today. In short, we all need to work together to turn the ambition of Alan into a reality before get overexcited and book your honeymoon on a super yacht around the Seychelles!
As you’re starting to see, at Alan, we believe in transparency. We also believe in distributed ownership: making everyone a shareholder helps guide everyone towards a collective success.
Not making salaries a secret also means:
- We foster trust and a sense of common purpose
- We promote self -improvement rather than negotiation
- We have to be competitive by regularly updating the grid
- We speak about problems openly
- Every employee will benefit in the success of the company