Does your team know how much you get paid?
Yes. We have full internal pay transparency.

For most companies, the decision to make salaries transparent would be controversial, to say the least.
It was a rule established by the founders early on and it became part of our culture. But you’re right. Does pay transparency improve the morale of employees? The answers to this question are mixed. It’s not just people with high salaries that might be opposed. People with low wages sometimes say they’d rather not know how much more others make, because it would depress them. Still, I’m convinced that, maybe not on an individual level but more in general, transparency will become more common. In California companies above 15 employees need to publish pay ranges in their job ads because of a recent law. This can increase pay fairness.

In an article published by French VC Elaia, you have also argued that companies should kill salary negotiation. Again, this perhaps isn’t a generally accepted position.
If you leave room for negotiation, this will inevitably lead to unfair pay practices. But we need to take a step back here and consider why you would negotiate salaries in the first place. And the real reason for that is a lack of real-time market data. Think about how technology has changed the way companies hire people. When I tell the youngsters in our startup how I used to recruit 15 years ago, with candidates sending their CVs by email and me having to store them on a shared drive, they look at me as if I’m a caveman. Since then, the hiring process has changed dramatically. Today, everyone uses recruiting systems. But compensation policies are broken and still trapped in the stone age. HR specialists lack the proper tools to make informed offers based on reliable market rates. And this is the root cause of unfair pay.

Figures has built this tool, and everyone playing around with it for a few minutes will intuitively realize the usefulness of the market data you provide. But why did no one else build such a tool before?
Historically, HR tech startups were significantly underfunded compared to other startup verticals like, for example, fintech. This was because companies that invested in digitalization prioritized financial and sales tools but not HR tools. Compensation is also a very technical topic, much more so than hiring, which might have scared a few founders away. Furthermore, HR was seen as an auxiliary role. All of this has changed. You can ask who you want and they will tell you that finding talent is one of their top concerns today. HR has become a strategically important topic, people in HR are of a higher caliber, get paid more, and have larger budgets at their disposal. This, in turn, made it more attractive to invest in HR tech, which has led to more innovation in the field.

Let’s come back to your unorthodox positions concerning HR policies. You say that individual bonuses are out. Why?
I’m convinced they will disappear outside of sales or executive roles because they’re such a blunt instrument. In the eyes of a potential employee, a pay component that isn’t guaranteed doesn’t count. And not just for them, neither do banks take them into account if someone wants to get a mortgage to buy an apartment for their family. So companies have to adjust the base salary upwards and end up overpaying with bonuses. What is more, bonuses are hard to distribute objectively. It takes a lot of effort to establish frameworks and in a startup, you constantly need to adjust them. When the end of the year comes, people worry if they’ll get their bonuses or not, and this diverts a lot of energy from the real goals of the performance review process. Individual bonuses are on the way out and should be scrapped or at least replaced by collective bonuses if things are going well.

What does the data Figures has gathered tell us about the gender pay gap?
You would think that startups, progressive young companies without burdensome legacies, are best in class. But for the 900 companies using Figures, the pay gap between men and women – for the same role in the same geography and with the same amount of experience – is still 4,6%. When you look at the unadjusted pay gap, which is the difference between men and women across all roles, it stands at a whopping 26%.

Why is that unadjusted pay gap so high?
More than 90% of the founders in the sample are men. Most of the executive roles, as well as other well-paid positions such as finance, tech and sales are held by men. Women are overrepresented in the lowest-paying administrative and support roles. The glass ceiling is still a reality.

“We can’t make decisions for other companies, but we can show them data that is difficult to ignore and suggest actions.”

One would expect that having a tool at hand that helps identify the gender pay gap would push companies to eliminate it. So why is that gap not 0% yet?
We can’t make decisions for other companies, but we can show them data that is difficult to ignore and suggest actions. But in the end, it is them that need to allocate the budget to close this gap.

What’s the highest salary in your database?
The CEO of a French company with around 400’000 euros.

In 2013, a public initiative in Switzerland was voted on that wanted to limit the highest pay in a company to a maximum of 12 times of the lowest wage in that company. It was firmly rejected. What do you think of such proposals?
If you want to become a certified B Corporation, the limit is even lower at 1:8. I think that limits that companies set for themselves make sense to increase pay equality. As a company, you should be able to attract top talent for more reasons than just the height of the salary.

Let’s talk about Figures’ expansion plans. When you open up a new market, you need a critical mass of companies to be able to provide useful data. How do you get to that point?
We overcome the cold start problem by providing free access for one year for the first companies that join us in a new geography. Then, of course, we need to make sure that they stay as paying clients. We face the same challenges for new verticals or roles where we don’t have many data points yet. We might not have reliable data for industrial engineers in an automotive company yet, but we do have the data for software engineers, for example. So it’s really about rapidly filling in the blind spots. The bigger we get, the easier this expansion will become. Take the example of Spain we’re opening up at the moment. We’re already working with multinationals that have subsidiaries there, and Spanish companies have subsidiaries in markets we’re already active in. The European markets are very much interconnected.

There is inflation in titles. “Vice President” can mean a lot, or not. How do you make sure your data is really reliable and useful?
There are providers that just import the data as it is directly from HR systems. They have the problem that people don’t trust their numbers exactly because of the point you’re making. We’re asking our clients to map their roles to functions in our system, which means that the person who leads the finance team gets rightly attributed no matter what title that person might have. It’s a small effort but it pays out great because it assures data quality.

You’re primarily targeting startups and scaleups, but you also count big companies such as LVMH or BNP Paribas among your clients. What’s in it for them?
The median size of our clients today is a bit above 70 employees. And yes we work with some subsidiaries of large companies. They want to benchmark their pay against startups.

Why would they do that? Can’t they just assume that they pay better than startups anyway?
They could assume it, but they want to know for sure where they stand. Years ago, startups couldn’t match the salaries big companies offered. But recently, many startups raised tons of money, which allowed them to offer very generous pay packages. They started poaching top talent, and big companies woke up to this new reality. So they want to understand this market they know nothing about.

In the past, Figures grew dramatically despite not having a large sales force. How did you get so many inbound requests from potential clients?
First of all, you need product-market fit. Our main source for inbound was referrals from existing clients. HR specialists talk to each other, and if they’re happy with a tool will tell others to try it. A key driver for our growth was also that we started producing content early on. Not just any type of content, but actionable recommendations. We’re going to leverage insights based on the data we have even more going forward. We’re also engaging the HR community through webinars and have had great success with that. Lastly, we’ve also started producing very low-key videos such as “Life at Figures”, mostly for fun, but they seem to work very well, also for employer branding.

What are your plans for the future to improve the product?
Our core is benchmarking, but we want to offer clients proactive alerts about market movements. If for whatever reason salaries for data analysts in Paris or product managers in Berlin start to increase, clients will want to know this before they realize it otherwise when their employees start leaving. Another more complicated project is to include benchmarking equity packages. For this, we need to integrate our product with cap table management systems such as Ledgy or Capdesk. The problem here is that contrary to the US, where every single startup uses such systems, they are not yet that common in Europe. The general knowledge of employees about shares as part of compensation is also not as profound as it is in the US. This needs to change, as owning shares of a successful startup as an employee can become a significant source of wealth at one point in your life.