When Buffer released how much they pay their staff a couple months ago, I got a little nervous. Other than the fact that I make half of what Joel (their CEO) makes every year, they hire staff for positions similar to ours and pay them $12,000 — $20,000/year more than we do. We don’t make what Buffer does — to date we make just over one-quarter of what they do yearly — but we have to compete with them in the same talent pool.
This got me thinking about how we attract great staff. Since we don’t make as much as Buffer or Dropbox (two companies which offer really great salary + benefits packages), we need to be a little more creative. While this is constantly something we’re tweaking and working on, I thought I’d share some out-of-the-box ways we add value to positions at Phuse that will work for any business, regardless of net revenue size.
Why not just pay people more?
We have a low profit margin, no significant investment or padding, and a sometimes unstable cash flow, so we can’t afford high salaries. My thinking behind a lot of our benefits was to spread wealth when we can without overpromising and causing us headaches when we can’t. While none of these ideas are particularly “new,” framing them as perks and giving them often when the times are good is important.
Our core perks
One of the easiest and most effective ways of adding value to positions isn’t monetary, it’s being flexible. We do this by offering five key “perks:”
- Remote environment. We’re big believers in working remotely because we do it every day. We think there’s a lot of value in having an office and working face-to-face, but being based remotely means we get to hire a lot of people in small towns and cities you’ve never heard of who don’t want to commute — saving them stress and transportation costs. On our end, the thousands of dollars we save in rent get put towards our people.
- Reduced hours and flexible scheduling. 40-hour weeks are tough, and they often turn into 60–80 hour weeks around big project deadlines. By working 30-hour weeks and having a “no overtime” policy, we ensure people can have a life outside of work. We find that this makes them happier and more productive when they’re with us. We also trust our team to be responsible for their own schedules, so we don’t care when they work those hours as long as they meet all their deadlines.
- Freelance freedom. We encourage people to freelance outside of The Phuse for a few reasons. It allows them to make more money while working with us, and also gives them new experiences they can bring to us. Plus, whenever freelance clients need anything over and above what they can handle, they’ll be the first people to recommend working with us!
- Transparency. Transparency makes people feel like they’re a part of something larger than the design they’re working on or developing. I wrote about it last month, but doing simple things with transparency like posting a roadmap and company-wide goals add significant value to working for you.
- Constant lovin’. We’ve created an environment that encourages everyone to positively recognize each other’s achievements, and I try to consistently send love notes to staff. Sometimes they’re long emails, but they are more often small bits of appreciation telling my teammates that I love their work. These little warm notes make people feel warm and fuzzy and don’t take long to to do, just a few short minutes with staff each week yield in incredible feelings of value.
Smaller, more frequent raises
Often when we do offer raises, they’re smaller than what most companies offer, but they’re also more frequent. While some businesses might offer larger raises and bonuses once every couple of years, we’ll offer more raises and bonuses over the same period of time — though they might not be as large, or add up to as much. Generally these raises are $1200-$2400/y at a time (or $100-$250 for bonuses), and are tied to client happiness and project success.
One approach we’ve been experimenting with is offering a lower starting salary than we can afford, but giving an early raise if things are going well. This has motivated people and let them know how awesome of a job they’re doing. Again, it’s not about how much we give, but timing raises and bonuses for when they are most deserved.
Quarterly goals and incentives
We post quarterly goals, and provide incentives if people hit those goals. The usual ones for our designers and developers are hours worked (and billable %), as well as going to meetups or writing blog posts. For our operations team, they range from social media goals, to sales goals, to anything in between. Our incentives range based on how business and our cash flow is doing, and changes from $1200/y salary raises to $500 bonuses or gift cards.
This is something we’re still experimenting with and isn’t perfect. What we’ve found is that since we work in an hourly environment, these quarterly goals aren’t consistent with our culture (a results-focused work environment).
We’re working on a different, more qualitative than quantitative, way of giving out bonuses and raises based on actual work done, client happiness, etc, that would include setting a “budget” for overall salaries and bonuses, and working with the operations team to figure out who deserves what.
Stipends
In 2013 we added three different stipends: $500/year for Home & Office (computers, hardware, a new desk or chair, etc), $250/year for Healthy Living (gym memberships and classes, equipment, etc), and $1000/year for Education (conferences and workshops, books, etc). This easily added $1750/year in value to our salaries, but it’s up to our team to spend it.
The future of our perks
I’ve been considering other ways to add value to our positions, including tangible stuff like Rdio/Spotify accounts, monthly massages and/or house cleaning services, coffee and tea credits, coworking, etc.; as well as offering finders fees and giving staff stock options. For now, the best things I offer to our staff are intangible. Does your business use non-monetary perks? If so, what are they and what other ways can you add value to the positions you offer?
If you need some ideas about perks, the fine folks at AuthenticJobs have an awesome tool that pulls the perks from positions that are posted to their website, so you can see what sorts of awesome things other people are offering.
