CEO Secrets: 'We tried paying everyone the same salary. It failed'

By Jeremy Howell
Business reporter, BBC News

Published
media captionSpill boss: "Sometimes you don't have to reinvent the mould"

When Calvin Benton started his psychotherapy company Spill, he had the idea of paying everyone the same amount of money. He thought it would bring harmony to the team. Instead, he was forced to abandon the scheme within a year because of the rancour it created and pay people according to their seniority and expertise.

"We realised that we had to pay attention to market forces," says Calvin. "Sometimes, traditional practices are there for a reason."

Calvin set up Spill in Dalston, east London, to provide online counselling and therapy to companies' employees. It helps them with problems such as depression and work-related stress. Started two and a half years ago, the firm now has more than 100 UK companies on its books, 13 full-time staff and a number of part-time psychotherapists dotted around the country.

Over the last year, Spill's sales have grown by 40%. "We've seen an explosion in demand," says Calvin.

"This is partly because of the pressures that people have been feeling, working from home during the lockdowns. Many cannot set their work aside at the end of the day and suffer from burnout. Others struggle to get motivated to work when they're not in the office."

In addition to work-related issues, people also go to Spill to seek help for depression and bereavement.

"More and more firms are paying for their staff to get therapy for their problems because it's getting harder to get therapy on the NHS," Calvin explains.

Both of Calvin's parents are qualified psychotherapists. He specialised in computing. He put the two disciplines together to create a service where therapists treat their clients over apps such as Zoom.

One of the big decisions that Calvin made when he founded Spill was to pay himself and his colleagues an equal salary.

"There were five people, and everyone was pretty much contributing the same," he says. "So we tried this experiment where we paid each of us an equal amount of money - regardless of experience, regardless of role. We wanted to challenge the traditional model of pay. We decided on £36,000 a year for everyone. We calculated that was a decent living wage for London."

Initially, the measure worked well and fostered a lot of goodwill within the team.

"Let's say we were going out for drinks," says Calvin. "There wasn't a problem of who pays, or whether this person doesn't get paid as much as this person so maybe the manager has to pay. Everyone got paid the same, so it was much easier in those social situations."

As Spill took off, Calvin recruited new staff such as a software developer, a salesperson and clerical workers - and decided to offer them all the same £36,000 salary. This is when the problems started.

"Software developers are typically very in demand, and they usually take a higher salary than £36,000," says Calvin. "Salespeople are typically paid on commission. So it was not a model which particularly suited either of those two industries.

"We really struggled to attract senior talent for the software role. And it got to about three months in when the salesperson started asking to be paid according to sales targets they'd achieved, saying the fixed salary wasn't working for them."

At the same time, Calvin was getting overwhelmed with applications for the £36,000-a-year clerical jobs he was advertising.

"We were offering a lot more than other clerical jobs paid and a lot of people were applying to the roles because they really wanted this high salary, rather than wanting to work at Spill because they believed in the mission behind the company."

image copyrightCalvin Benton
image captionCalvin said returning to a more traditional model for remuneration helped workplace "harmony"

Among the newly expanded workforce, the equal pay system was starting to cause grumbling.

"When we grew the team, we started to have some people who contributed more than others. You had some people who worked longer hours than others. The question started to arise: should this person be paid the same amount as me?

"That caused a conflict in the team and a conversation in the team about whether this experiment was right to continue."

After a year, Calvin bowed to the pressure from his staff and scrapped the equal pay system, replacing it with a traditional structure of pay grades based on seniority in the company and technical expertise.

"I think it was a disappointment when the experiment failed. We wanted to do something which was democratic and egalitarian. But sometimes traditional practices are there for a reason. Sometimes you don't have to reinvent the mould on everything."

One good thing came out of Spill's equal pay experiment, however. After it was scrapped, Calvin decided to make everyone's salary level common knowledge to the rest of the staff.

"Since our salary policy is open," he says, "there are no rumours over who is being paid what. That has helped produce harmony in the office. And if you are in the therapy business, it's important to have harmony in your own workplace."

Read more CEO Secrets here.

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