Fundamentally, our business is about people. We spent a lot of time developing software and processes, but it all counts for nothing if we don’t have great people to set and follow the policies.
As with any people based business, that makes it extremely important that find and attract the right candidates to join our team, and that we incentivise them to do the best job they possibly can.
Traditionally lawyers and accountants incentivised their staff using the partnership model. Bonuses are small for the majority of the team, but the promise of becoming a partner and getting big payout is always just around the corner.
We don’t believe that the partnership model is fit for the next generation of professional services organisations. It promotes politicking and bureaucracy and restricts the rewards to a small elite minority.
We’ve borrowed heavily from this article by Nathan Barry. The theory is that there are four types of reward, with each having a unique role to play.
The majority of almost any employee’s reward comes through a fixed salary.
We believe that salaries work best when they are transparent and clearly explained. We have worked in organisations where salaries are concluded according to secret negotiations and in our experience it is almost always creates an unpleasant culture of secrecy and confusion.
Our salary offers are calculated according to two factors.
Firstly we have a pay band for each level of experience, based on market data for qualified accounting jobs in London. We know that every individual is different but we find that this system makes gives our teams confidence that they are fairly paid in relation to their colleagues.
Secondly we work out we could charge our clients for the individual’s work, and work backwards to assess whether we could make a profit. If we don’t believe that we could get to a point within six months where we could be making a profit from our team members, we don’t make them an offer.
This is important as we need to pay overheads, acquire clients, invest in growth and of course make a profit.
We use this system to evaluate appropriate offers, and review salaries across the team at the end of each year. Our policy is to pay above average salaries to get above average teams.
As we’re confident in the offers we provide we don’t negotiate on pay in the interview process and we don’t accept requests for pay increases. Again this allows our teams to focus on their jobs rather than worrying about who’s paid more than they deserve.
In addition to basic salaries we also provide a fixed daily lunch allowance via prepaid cards. Our teams spend a lot of time working at different client locations and we know how important a tasty lunch can be to making that process a little bit easier. It also provides a modest tax advantage compared to extra salary.
The long term fixed element of the grid is provided by pension contributions. In the future we want to offer employees the chance to pay as much or as little salary into their pension as they desire, but right now we are operating a simple auto-enrolment scheme with limited flexibility.
The short term variable element of compensation is made up of two categories at Quantico: Bonus and profit share.
In addition to fixed salaries we believe it is necessary to recognise additional effort and one-off contributions. Bonuses are paid primarily according to performance against individual objectives set at the start of each appraisal year.
We want to share the overall performance of our company with the team, and we want them to be as excited about pulling together to hit certain milestones as we are. For that reason we allocate a fixed percentage of profits each year to be shared between the team as part of the bonus pool.
Our future intention is to set annual budgets and to pay out a fixed percentage of all profit in excess of the budgeted amount. However at the present time whilst our business is growing so rapidly we simply have the expectation that every employee can expect to receive an additional 0% to 10% of their gross salary.
We believe that this system of mixed remuneration provides a balanced pool of incentives that’s fit for a 21st century professional services firm.
Nobody is left hanging by the promise of a partnership promotion ‘just around the corner’ and everyone shares in the success of the team.
Of course remuneration is only a small part of what makes a team great. To read more about our standards click here.