Benchmarking pay — new biotech micro industries
I often get requests from hiring managers to provide benchmark compensation ranges and increasingly that becomes more and more difficult, especially for early stage companies. There was a great article in a recent issue of the Harvard Business Review that speaks to this – “Why it’s so hard to figure out what to pay top talent” by Tim Low.
To summarize, he talks about several things including the evolution of “micro-industries”. Over the years the explosion of developments in technologies such as, synthetic biology, next generation sequencing, bioinformatics, gene editing, stem cell tools and mass spectrometry have led to new mini markets. Companies are looking for people who not only have the appropriate technical experience but who also have good practical experience in specific areas. For example the role of an NGS project manager may be very different for pharmaceutical company compared to a diagnostic company, a life science tool company or a contract research organization. Although the technological component clearly unites the different roles, the different dynamics of the different organizations leads to unique requirements. Layer that with pay differences between large companies (stable compensation but low upside) vs. small company (lower compensation but higher upside), it makes it very hard to come back with a magic number for a salary bench mark.
My recommendation to hiring managers is if possible, first try to inject flexibility in the way you build compensation plans. Secondly carefully consider all of the components of the compensation package, including salary, bonus, equity, 401K match and the range of benefits. Third, clearly understand the candidate’s personal financial goals and value to your company.