Article

Why fixed salaries work for New Things

November 30, 2021

Photo of Laura Toropainen

Laura Toropainen

There are several consultant salary models in the Finnish IT industry today. You have your fixed salaries, your models tied to invoicing (several different ways), your sweat equity models etc.

Each model has pros and cons; for example, working on a model tied to your invoicing can maximise your personal profit and financial gains.

At New Things, we have chosen the fixed salary model since the dawn of our time (2017). Our salary range at the time of writing is loosely around 4-6K/month, and we have together chosen internal criteria that defines what each person makes. Our compensation package also has a benefits package that includes the following: - Lunch benefit (200€ on top of monthly salary) - Culture and sports benefit (400€ per year tax-free) - Home internet benefit - Option for Housing benefit - Extended health services at Mehiläinen - Travel Benefit (choice from Edenred credit, HSL yearly subscription or bicycle benefit) - Holidays accrue at 2.5 days per month from the beginning of the employment and paid holiday for the first year. - Phone benefit And the list goes on.

So far, this has worked for us - here’s why.

Fixed salaries in consulting provide security and freedom

Not having to worry about your salary while you’re on the bench gives you the freedom to validate and choose the project you will work on next. If you rush into a project due to the pressure of making a decent salary, you might end up in a project where you are repeating something you have done for years, or have no impact over how things are done.

Fixed salaries also allow you to take the time to process anything learnt from a previous project. Or get onboarded correctly to the company if you happen to be a new Thingie.

At New Things, we also actively look for the sweetest projects for us. We focus our sales efforts on building new things in a New Things team. One of our biggest priorities is to keep our people happy and doing meaningful work. If our consultants feel pressure just to take any project, they could end up doing things that are utterly uninteresting for them. And we would not have the freedom to look for the projects that take our company or our skills to the next level.

Our target invoicing rate is 85% - leaving time for other things

We want our people to have the space to impact everything that goes on in our company. To allow them to be a part of building us forward if they wish to do so.

Here are some of the things that are not related to client work that our consultants take part in: Recruitment, sales, marketing, strategy work, OKRs, party planning and other internal work. Events, workshops, trips and anything else that might happen on work hours. Courses that we organise, and time for independent learning. Taking time off from Friday afternoon to sneak in a sauna before heading off to the weekend.

The way we see it, a fixed salary gives people the chance to use time on things that aren’t invoiceable, such as those internal company things, and for learning something outside of the project scope.

Our financial structure allows us to do this, and this way, our company is genuinely built by us for us.

We see salary as a hygiene factor, not a “good motivator”

The motivation and meaning of work should come from the content of the work, not what a person is making.

Studies on the subject have shown that while money can motivate tedious work, it can have an opposite effect if it is highlighted as the primary motivator.

This is also where the hygiene factor plays in. If a person feels like their compensation is unfair, it can demotivate them.

Clear and transparent criteria for assigning a salary is critical when it comes to compensation.

What the future holds for us

As an experimental company, there’s no way of saying if this is the way we will always do things. And the argument “we have always done things this way” is like swearing in our company. So there is no way of knowing what the future of salary models looks like at New Things.

However, for the time being, we are focusing our efforts on bringing in the kind of work that intrinsically motivates our people, and since the fixed consultant salary works for us, there’s no need to change it for the moment.

If you have a different opinion, or just want to discuss the topic with us shoot us a message.

Want to work with us? See our open positions.


About the author

Laura Toropainen

Recruiter of new things

Building New Things and loving it. Other things I love are dogs, cats, running and happy people.