For
Founders
Funding
Office Hours
Funding Lab
Growth Spurts
Studio
Growth Playbooks
The Forward Fortnightly
For
Investors
Investor Centre
Strategy
Our board
Regulatory News
Our
Company
People
Portfolio
Blog
Press
cAREERS
ESG
Apply for funding
By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.
Decline
Accept
People & culture
No items found.

How to approach startup salaries during an economic downturn.

I'm being asked a lot at the moment about how founders and hiring managers should adjust their employee's salaries as inflation is at an all-time high. To make this more challenging, if you’re looking at data from a few months ago to benchmark your compensation packages, you’re already behind the curve. 

‍

KEY TAKEAWAYS

  • There are lots of creative ways you can stay competitive, even when you can't increase salaries directly in line with inflation.
  • Communicating honestly with your employees during challenging times is a powerful strategy.
  • Benefits and perks can work harder for your employees as long as they are regularly reviewed.

Read my top 5 tips on how to ensure your salary and benefits packages can remain competitive during the looming recession.

Take a holistic approach.

Build up a competitive offering that goes beyond salary and encompasses mental health well-being and learning and development budgets. For early, seed-stage companies, equity-based compensation is another way to ensure long-term financial security for your people. 

Performance-based or cost-of-living in-kind bonuses. 

These are more flexible ways of staying competitive in the current climate which can provide immediate assistance in a challenging economic time. 

Review your benefits offering.

It’s also worth reviewing your overall benefits; they’re an expensive asset and many go unused. After all, a diverse workforce values a diverse set of benefits. How can you structure your benefits so that employees can choose what is valuable for them and consider them as the valuable asset they are? Platforms such as Perkbox and Thanks Ben are great for this and can include payments in kind that can reduce the cost of living for many. Using a platform like Thanks Ben to put £50 a month on a virtual debit card for your employees to spend on the little things they’re probably considering cutting back on, such as their daily coffee, is a great way of showing empathy with your people.

Take a localised approach.

If you have a remote workforce, the whole idea of how much to pay gets a whole lot more complicated. In this case, it’s important to find out the norm in the territories your people live in to allow for local nuances. Boundless, for example, has put together a great infographic setting out the norms in relevant countries. 

Communicate.

Implementing transparent salaries is also another way of ensuring open lines of communication and clear expectations with your people when it comes to remuneration. Glassdoor or Figures is a good starting point but you can go further by reaching out to your network and other founders who have built similar teams in similar industries to check what they’re paying. Communicating your method and approach to salary bands to your employees brings wider transparency and appreciation for the process. It will also keep your gender equality pay gap in check, as women are 80% more likely to not negotiate pay when applying for jobs.

Ultimately, the cost of hiring and backfilling roles has just got a lot more expensive with candidates expecting increasingly higher offers, so there has never been a more appropriate time to review your remuneration strategy and how you communicate it with your employees.

Acknowledging the economic challenges we’re facing and being transparent about your thinking and strategies for remuneration will signal to your employees that you recognise we’re all feeling the pinch and doing your best within the means you have. Refusing to discuss it or acknowledge inflation is at an all-time high will only make your employees feel you’re not in touch with their daily challenges.

‍

Written By

Rachel Grewal

Head of Talent- Studio

As a highly experienced Talent and People leader, Rachel's background is in scaling businesses strategically in multiple geographies and coaching teams of recruiters to be their best. During her career, Rachel has worked for scale-ups with a focus on tech talent, taking a startup tech consultancy from 60 to 600 people in just over 4 years, and she has worked to bring about strategic change in larger organisations such as the Financial Times.

Her influence extends to proactively impacting culture and talent development, retention and DE&I practices, influencing senior leadership teams and challenging the way an organisation is developing.

Building a startup? Stay ahead of the pack with The Forward Fortnightly.
Subscribe today to get tech news and trends, growth tips and advice and exclusive event invitations, straight to your inbox every fortnight.
subscribe
Related
read
No items found.
Takeaway

No items found.

You may also be interested in...

People & culture

What to look for in a co-founder of your startup.

read
People & culture

How to put together an effective product team.

read
People & culture

How to implement clear progression frameworks in a startup.

read
People & culture

5 ways to make your pre-boarding candidate experience a 10/10

read

Tel: 020 3514 1552

Huckletree Shoreditch, Alphabeta Building, 18 Finsbury Square, London EC2A 1AH

Forward Partners is authorised and 
regulated by the Financial 
Conduct Authority (FRN 737783)

FOLLOW US
Founders
funding
Studio
BELIEFS
GUIDES
Investors
Investor
centre
Strategy
Our Board
Investor newsletter
Regulatory nEWS
faqs
Forward
Our TEAM
CAREERS
PORTFOLIO
BLOG
Press
Connect
APPLY FOR 
FUNDING 
OFFICE HOURs
FUNDING LAB
FORWARD 
FORTNIGHTLY
Policies
T&c'S
Privacy
Disclaimer
Code of Conduct
Env pOLICY
i&d pOLICY
Resources
Press Resources
AIM26