Hiring is one of the biggest challenges a company faces. In a recent article by David Smooke, 50 entrepreneurs shared their biggest hiring challenges, most of them expressing concerns around salary, equity and benefits for employees. Figuring out what to pay an early startup employee is difficult. This is a problem that we, at Compass, have faced in our efforts to expand our small team, and is often echoed by most of our users. The prevailing popularity of this challenge made us dig deeper into the issue and we are determined to find an answer by conducting a survey for employee salary and equity in tech startups.

Employers: Click here to take the survey

Tech employees: Click here to take the survey

Salary + Vision + Equity = Compensation. 

Sam Altman in his blog says, “You should be very frugal with nearly everything in a startup. Compensation for great people is an exception.” But what does an exception mean? “The best people want to work on a mission they believe in, and make money,” says Mark Zuckerberg. What should you pay to people who are onboard with your mission? How do your compensation packages compare to your peers?

With limited resources, startup founders must ensure that they both retain adequate equity and remain competitive in the market. At the same time, they must also compete with other startups that cater to similar markets but have raised huge amounts of funding. This can be even more challenging if you are bootstrapped. For young companies there is a lot of uncertainty each time they make an offer to a new hire.

There are many blog posts that try to formulate a solution for this problem and many founders have shared formulas to determine compensation packages, but companies rarely share specifics in order to maintain their employees’ privacy. There is no comprehensive startup compensation guide out there.

Recently, Buffer published a blog post giving away the formula they use to determine the salary+equity packages of all its employees. But does this formula apply to all companies? And, what do you do till you reach that level of structure in your company that you can use a formula to determine salary or equity?  

In an effort to help companies, from early stage to scale, be more successful with their hiring, we want to make this process more data driven, and provide a guide to the market.

Salary survey of startup founders

Earlier this year, we conduct a salary survey of startup founders. With participation from more than 11,000 startup founders from across the world, we were able to benchmark what founders in different startup ecosystems pay themselves. The results of this survey were published on many notable websites including The Next Web and Inc.

We are excited to announce that we are conducting a similar survey on tech employee compensation data in order to chart a benchmark of salary and equity of tech startups. All data specific to your company will be excluded from our published results, in order to maintain the privacy of your employees.

You can contribute and help your peers figure out how to effectively compensate their employees by filling out this survey:

Employers: Click here to take the survey

Tech employees: Click here to take the survey

This data will provide you with insight on your compensation versus industry standards. We aim to bring transparency into the global hiring ecosystem by creating a go-to guide for tech companies to help make data driven decisions for tech employee salary and equity.

Thank You,

Bjoern Lasse Herrmann

and the Compass Team

Articles referred to:

Going Public Has Changed Mark Zuckerberg…Finally – Pando Monthly

50 Startup Founders Share Their Biggest Hiring Challenges – Smart Recruiters

Introducing Open Salaries At Buffer – Buffer

How To Hire – Sam Altman