People often tell me that starting Quantico was a mistake because it ‘won't scale.’ Even Peter Hargreaves, the successful millionaire businessman, told me this on the podcast Can I Ask You A Personal Question!
Personally I don’t think there’s that much difference between ‘scalable’ software businesses and ‘non scalable’ service businesses. In fact the best businesses learn to combine the two. Both are perfectly capable of scaling if they have the right ingredients, and both will suffer if they don’t.
And what are the vital ingredients for scale? In my book there are three: People, culture and systems.
Pay and reward are right at the centre of those. As we’re hiring right now at Quantico we’ve been talking a lot about how we enable our team to share in our success.
Here’s what we’re doing and why...
The good news is that we're doubling our business every year. That does create a problem though. How do we balance the need to reinvest for growth with our desire to share the rewards with the people who deserve it the most - our team?
We knew early on that we didn't want to replicate the reward structure that traditional accounting firms and the Big 4 use. At firms like these, it's only the partners who get the profit. New starters work extremely hard for ten years or more on the promise of one day getting to enjoy the rewards.
It didn't seem right to us that only a tiny minority of the workforce get to enjoy the fruits of their work, especially when the partner group is so unrepresentative of the workforce and society: For example in 2019 only 9% of FTSE100 audit partners were women and none was from an ethnic minority.
We're on a mission to revolutionise the finance sector, so we saw devising a new reward structure as another opportunity to challenge the status quo.
We're a startup, so we initially thought we'd be able to go down the Enterprise Management Incentive scheme route. It's a tax-efficient model that many startups use to grant share options to their staff.
Unfortunately for us, HMRC told us that the EMI scheme isn't available to accounting firms. We tried to tell them that we're not an accounting firm, but they rejected it out of hand. It was a real 'computer says no' moment - an example of a powerful institution stifling innovation.
In most startups, you get share option schemes that you might one day be able to vest and get a share of the company. The problem with these schemes is that your rewards are delayed until a hypothetical future event like a sale or IPO - and there's no guarantee that something like this will happen. Unfortunately, most of the time, these schemes are like a lottery ticket that will never pay out.
That's why we came up with something different.
At Quantico, we believe that it's our people that bring our success. So, we want to reward them all for it - now, not later.
Here's how our reward scheme works:
You might be wondering where the performance element of our reward scheme is?
I'm afraid it's a notable absence! This may come as a shock to people working in accounting firms who are used to a performance rating determining their bonus.
We believe that if you meet all your objectives over the year, you shouldn't just get a one-off bonus and then get back to your regular job. Instead, you should be promoted to a more challenging position with higher pay!
That's why our profit share scheme has no performance element, it’s captured in our promotion cycle instead.
If you would like to work at a company that is changing the shape of finance while rewarding its people in the fairest way possible, it's time to talk to Quantico.
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