Business Issue

Over a three-year period, the company experienced significant growth, both organically and through acquisitions, resulting in a workforce that doubled in size. The founders had recently secured private equity backing and made a transformative acquisition. As an entrepreneurial business, it was highly person-dependent and lacked the necessary talent infrastructure to support its scaling needs. The existing compensation structure, which involved a base salary and a flat dollar bonus tied to company performance metrics, posed challenges for talent acquisition. Additionally, the lack of structure and transparency around rewards created concerns about pay equity, undermining the company culture.

Approach

To address these issues, we implemented a comprehensive strategy focused on building a robust talent management infrastructure. Our approach was designed to create a more equitable and transparent compensation system, ensuring the company could attract and retain top talent. Key steps in our approach included:

1. Benchmarking and Market Pay Analysis: Conducted a thorough external market pay analysis for 100% of the jobs to establish Total Target Compensation (TTC) and appropriate pay mixes.
2. Job Hierarchy and Leveling: Provided basic leveling and an initial job hierarchy to set guardrails for pay adjustments, addressing pay level and equity issues.
3. Compensation Philosophy: Developed a comprehensive compensation philosophy to support the future organization and workforce.
4. Incentive Plan Design: Designed a short-term incentive plan and template that could evolve to meet current and future employee needs.
5. Cost Modeling: Completed cost modeling to estimate the financial impact of the new compensation structures across functions.
6. Change Management and Communication: Provided a change management and communications plan for the rollout of these changes.

Business Impact

Our approach delivered several key benefits:

• Educated company leadership on the foundational elements of talent management and developed organizational capability.
• Directed approximately $1M of investment to bring most of the employee population to market competitive levels, mitigating the immediate risk of top talent attrition.
• Redesigned incentive plans to better align individual, team, and functional interests, driving alignment and desired behaviors across the business.
• Laid the groundwork for addressing job architecture, salary structures, and career pathing.
• Addressed employee concerns about unfair pay practices, improving transparency and adding more structure to pay administration.

This comprehensive approach not only stabilized the company’s talent management infrastructure but also set a solid foundation for sustainable growth and a more equitable workplace culture.