It's almost become standard for a tech company's compensation plan to be based on the tech trifecta: base, bonus, and equity.
However, plenty of tech companies may find themselves in a position where they cannot offer a cash bonus in their compensation plans.
2022 was a different time in tech - salaries are at all-time highs, signing bonuses briefly returned to roles outside of a company's SLT, and virtual 'help wanted' shingles were hung on the web windows of almost every tech company around the world.
In 2023, our conversations with Founders, CEOs and Heads of Talent have been a little different. Companies are still needing to make critical hires, but often with less exciting compensation packages.
If you now find yourself hiring without a bonus plan, here’s how to set the stage for success.
Look for Builders
Target and look to attract the employee persona who is entrepreneurial and a builder. Those builders who have been bitten by the startup bug long ago and thrive in a "figuring things out" environment. This persona is often one where a lack of bonus can be outweighed by potential opportunity.
For Engineers: it's the opportunity to live the life of those who came before them; the coders who worked out of dorm rooms or their parent's garage and built the companies that are household names today.
For Product Managers: it's the opportunity to take a Founder’s napkin drawing idea and bring it to life. To solve a problem that will unlock a future of growth and the opportunity to build a business.
For Marketers: it’s the opportunity to define a brand, its messaging, and the basis upon which all other marketing programs and campaigns (and the business!) will be built.
For Sales: it’s the opportunity and street cred of getting a high-profile enterprise to become a beta customer or possibly even partially fund the development of the solution.
Some candidates will perceive an employer who doesn't pay bonus plans as stingy or cheap. For this reason, extra effort needs to be applied at the offer presentation stage to educate a candidate on why the comp plans are structured as they are.
Assume it will need proper positioning and messaging, and find the time to do it. Don't wait until the process is nearly complete and lose the candidate based on their incorrect or incomplete assumptions.
When an employer is a startup, meaningful equity remains an attraction tool for hiring tech talent. It unites the team to the greater outcome they are collectively trying to achieve together. There are many ways to use stock options to recruit employees that can be just as enticing as bonuses.
Depending on the maturity or brand of a company, recruiting without a bonus plan is not a hiring death sentence; it just requires a little more forethought, planning, and messaging to entice potential employees to join.