Career Ladders for Startups

Tell me if this sounds familiar: Employees don’t understand expectations. They keep asking what it will take to get promoted. They point out inconsistencies in titles. They want to know how their title relates to their compensation. The answers that used to work before just aren’t cutting it anymore.

The Stages

These questions tend to recur — you’ll solve them, and then they’ll come back again a couple years later at the next stage of growth. Each phase has a proportional solution, starting simple when you have just a couple dozen employees and becoming increasingly complex.

Stage 0: Fewer than 25 employees

In the earliest stage, no one much cares about title and levels. The company’s context and each employee’s role within that context change almost weekly, so trying to systematize expectations is a mistake. Premature structure will impede growth. No structure is better than a structure that’s too heavy to bear.

Stage 1: Starting somewhere around 25 employees

Somewhere around 25 employees, people want standards. They want clarity about what’s expected and what they need to do to get promoted. A lightweight leveling structure — a handful of levels with a couple sentences describing expectations for each — will quiet things down and serve as a useful tool for management conversations. Probably the most important thing to do is bring the leadership team together to level everyone in the organization, since this will ensure alignment on standards and will surface people who need a focused conversation with their manager.

Stage 2: Starting somewhere between 75 and 150 employees

The basic framework that got you close to 100 employees isn’t cutting it anymore. You have multiple layers of management, which breeds inconsistency and requires more guardrails. Your hiring pace is faster too, so you need clear rules of the road for titles and compensation. You’re hiring a new type of person, too, one who wants more clarity and structure. Now’s the time for a proper leveling framework with clear descriptions of each level, training for managers to have these conversations effectively, and a company-wide rollout where every employee has a focused conversation with their manager about their level, their performance, and what’s expected to advance.

Stage 3: After at least several hundred employees

Increasing specialization in the organization requires more precise leveling guidance. Whereas at a couple hundred employees it was best to have a single leveling framework for everyone, now you need to extend that framework into more precise language for each craft. The shared framework — often referred to as “the backbone” — won’t change. But the analytics leader will probably extend it to give specific examples for each level, and the same for the head of engineering or the head of design.

Level structures

You will deviate from each of the charts below, but they’re good starting points. They communicate how levels expand and titles split over time. The order in which you add new levels and titles will vary — maybe the first title added to the simplest framework is “staff” because there’s an awesome staff designer you want to hire; maybe it’s Senior Director, because you need to promote someone who was offered a Senior Director title elsewhere — but the patterns will be the same.

Lessons learned

• Strive to make your leveling framework as simple as it can possibly be at each stage. Most of all, resist requests from employees to make level descriptions and standards super detailed. The alignment such detail provides is short-lived — then employees will use the detailed descriptions to litigate their level and performance feedback in a way that uses the letter of the law to undermine the spirit of the levels.

• Calibrate, calibrate, calibrate. Before you introduce each leveling phase, get the leadership team together and review the level of every employee. This seems onerous, but it will make 1:1 conversations so much more consistent.

• Tie comp bands (both cash and equity) explicitly to each level once you’re into Phase 2. Comp will of course vary by function, e.g. engineers at Level 4 will likely be paid more than customer success at Level 4.

• Connect employee feedback directly to the dimensions of the leveling framework. If your framework explains each level across Autonomy, Impact, and Scope, then make sure managers deliver feedback specifically on Autonomy, Impact, and Scope.

• Not all roles should start at Level 1. Some roles, such as product management, require enough autonomy that they must be Level 2 or even higher as a starting point.

• Protect titles at Director and above. No one should be given a Director title without the leadership team knowing about it. Be less precious about Manager, since it means different things in different contexts.

• Titles typically have department-specific modifiers in the individual contributor levels. For instance, at Squarespace in Phase 3, the modifiers on titles were quite different based on team:

  • L1: No PM roles at L1, but marketing roles included Marketing Associate"

  • L2: Associate Product Manager; Marketing Strategist

  • L3: Product Manager; Marketing Strategist

  • L4: Senior Product Manager; Senior Marketing Strategist

  • L5: Lead Product Manager; Senior Marketing Strategist

• Having a couple titles that are squishy to give you flexibility. “Head of” is often useful. If you want to hire someone to be a manager at your company, but they have an inflated Director title at a smaller company now, you can use a “Head of X” title to make them feel like they’re not losing face while allowing you to still level them internally as a manager. This is particularly common in Marketing, where titles are inflated across the industry.

• Titles that span levels — for instance, having the VP title encompass two different levels — will produce major misalignment and comp inequity. Be careful with these situations.

• Sometimes levels can be useful for drawing bright line rules. For instance, you might say, “We only give annual equity grants to employees above Level 4.” Or: “Only Level 12 employees are on our corporate About Us page.” Just be sure you really believe it, because once you start undermining bright line rules the uncertainty that creates will seep into the whole leveling framework.

Links

I’ll add to this list over time, but for now:

• I quite like the leveling descriptions that Carta makes available here (you’ll have to share your email to download it)