Friends,

Thanks to those of you who wrote in with spy/espionage show recommendations. Legends.

I’m writing this from Brisbane where I’m aiming to spend more time co-working with friends this year. I love working remotely, don’t get me wrong, but I need a little face-to-face time now and again.

I’m excited to meet readers and connections in Sydney next week, and Melbourne the week after, as part of an IRL launch of the HiBob In Good Company community. And of which yours truly is an ambassador. If you’re in either location and haven’t RSVP’d yet, hit reply and I might be able to tee up a spot or two.

But if you’re outside those locations and haven’t joined the community yet, I encourage you to get amongst it.

Enjoy this week’s edition ✌️

Matt

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One of the most exciting elements of startups is the individual growth curve. The chance to expand your scope of responsibility, and level up faster than you might in a corporate environment.

But while this is an exciting prospect for those focused on their development, it can present an issue on the compensation front.

How do we value a role that is doing what might take the skills of 2 or 3 other roles in a more established environment?

While — in the short term — the opportunity might be reward enough, a flight risk emerges once someone inevitably realises they’re not being compensated for their increase in scope and responsibility.

It’s this risk we want to mitigate (ideally before it presents), and doing it right requires evaluating the role before taking one of two paths to resolve it.

Here’s some scenarios you might face that warrant evaluating a possible hybrid role:

Now let’s take a quick look at what not to do, before diving into a simple, repeatable method for evaluating hybrid roles and benchmarking them fairly.

I once benchmarked a role that comprised 50% of two functions.

My solution felt obvious at the time. The person did both roles, with their time split at about 50/50. So I benchmarked both roles, and averaged them.

That way (I figured), we'd account for the time spent on delivering the more expensive role, and recognised they also handled the scope of the lower cheaper role.

It turned out that this approach was exactly the wrong one to take.

All it did was dilute the value of the skills and experience they brought to the more expensive role, penalising them for taking on additional (albeit lower value) responsibility.

Four months later, that person left and landed a role paying roughly the same as the higher salary — because that's what their primary skillset was actually worth in the market.

Lesson learned.

There’s one thing we need to know before taking action. Is it hybrid, or is it just a job with extra responsibilities?

To do this, we can make a simple table that helps us evaluate a role's core functions, and crucially, how much of the job it represents.

Let’s use an example I’ve seen before: A HR & Ops Manager.

This might look like someone responsible for the day-to-day people and business operations, and covering things like hiring, employee lifecycle, compliance, payroll, and office and vendor management.

In this example, we have a clear hybrid role, where two separate functions make up a large part of the day-to-day.

If instead the HR Manager component was closer to 10-20% of the role, I would be inclined to say the role is primarily an Operations Manager with additional responsibilities (we’ll cover this scenario shortly).

70/30 tends to be a good threshold for gauging when a role is truly hybrid, vs a core role with extra responsibilities.

Here’s that test as a decision tree:

Once you’ve determined the role breakdown and seniority, it’s time to benchmark them independently.

Using the previous example, we might see the following:

The result here is fairly straight forward.

The top job is the most expensive one, and this should be the benchmark you use.

This is because if you were to replace the role, you would likely do it by hiring the skills in the higher cost job function.

This is exactly what we did in the example I gave above, where I mistakenly averaged the benchmark. After they resigned, we hired someone who could deliver on the higher value tasks they were doing.

Alternatively, what if your core job is your main focus, but you’re still responsible for a small secondary function (<30%)?

In this case, the approach is to offer a premium that recognises the added responsibility.

To do this, we can revisit the previous example, but with a different breakdown:

To determine the premium, we can simply gauge the difference in benchmark between the portion of the secondary job and the primary job.

Let’s see this in action:

Hybrid roles are normal in startups, but underpricing them shouldn’t be.

If a role blends multiple functions, your job is to decide what the market would actually pay to replace it, and anchor to that.

Use the 70/30 test to separate true hybrids from scope creep. Price the top job when it dominates, or apply a clear premium when secondary scope is real but contained.

If you enjoyed this post or know someone who may find it useful, please share it with them and encourage them to subscribe.

When you’re ready, here’s three ways I can help you:

1. Tools & resources
Resources and tools that give you what you need to build your own startup compensation practices.

2. Comp consulting
I run FNDN, a global comp consultancy that builds compensation practices that are clear, fair and competitive for startups.

3. Startup People Summit
I run the Startup People Summit, a one day annual event focused on creating the playbook for startup people practices. Grab recordings from past events, or subscribe to the newsletter to join the next event.

4. How to Become a HR Consultant
A publication where I share everything I did, and everything I learned, while building a HR consultancy from 0 to $500k per year.