Consider buying clothes for a child at the beginning of the school year. The outfit might fit perfectly today, but a growth spurt can make it too small within months. The same is true for your organization’s compensation structure. What once felt aligned and fair can quickly become outdated as you add new staff, launch new programs, or expand into new geographies.
Growth is exciting, but it brings new complexity. Roles evolve, staff expectations shift, and new laws may require greater pay transparency. Without updates, a structure that once supported your mission can begin to create confusion, inequity, and even turnover.
That is why leaders need to know when and how to redesign compensation during growth—to make sure their pay practices continue to align with both their organization’s needs and their values.
Let’s explore four dimensions that reveal whether your employee compensation is advancing growth and supporting your mission—or holding you back.
As your organization grows, existing compensation structures may no longer work. The peers you compared yourself to at 50 staff are not the same ones when you reach 150, and leading an organization with a $5 million nonprofit is very different from running one with a $50 million budget.
Growth often brings entirely new functions or job families that do not fit neatly into existing structures. For example, launching a digital platform may require developers and technical staff who must be benchmarked against entirely different markets. Forcing them into outdated pay bands risks underpayment and weakens competitiveness.
Expansion changes how you manage job levels and communicate pay decisions. Posting salary bands online without first updating your internal compensation structure can raise doubts about equity. New transparency laws make this even more complex: publishing numbers without explaining your compensation philosophy often leads to confusion and mistrust.
Compliance may tempt leaders to “just post the numbers,” but transparency without context can backfire. Staff need to understand the why behind ranges and how they connect to your broader philosophy. If you post ranges that reflect a new structure but haven’t reconciled them with the framework your staff already knows, you risk creating even deeper mistrust.
To scale with integrity, you must revisit four dimensions of compensation: size, sector, geography, and sustainability.
Many organizations benchmark pay based only on their current size. A better approach is to ask: who will we be in three years?
If you are currently operating with a $10 million budget today but expect to reach $20 million soon, benchmark at the higher level. To grow to that scale, you will need staff with the right skills and experience—leaders who have ‘been there, done that.’ For example, a development leader who has successfully raised $10 million annually brings not just ambition but proven capacity to guide your organization through its next stage of growth.
By planning for the leadership talent that you will need tomorrow—not just the team you have today—you ensure your compensation structure keeps pace with growth. That way, as your organization scales, your pay framework won’t lag behind. Instead, it adapts, much like buying shoes with a little extra room so your child can grow into them.
At the same time, not every growth trajectory is sustainable. If you are unsure, take a more conservative approach to avoid setting pay rates you cannot maintain. Pay cuts are far harder to implement than incremental pay increases. Look at the overall trend line rather than one-time fluctuations in market conditions.
When reviewing organizational size, both staff count and operating budget matter. Market data sources such as salary surveys often group organizations into categories:
Staff size: under 25; 25–50; 51–100; 101–200; 201–500; 501–1,000; 1,001–3,000; 3,001–7,500
Revenue: under $5M; $5–10M; $10–50M; $50–200M; $200–500M
As you move up these brackets, complexity increases. More departments, job levels, team members, and cross-organizational work all mean higher levels of complexity and scope of responsibility, as well as more expensive jobs to recruit and retain. For example, a head of programs managing one program has very different job responsibilities than one managing six programs with 100 staff. Similarly, a fundraiser responsible for $10 million annually requires a higher market value than one raising $1 million. These differences must be reflected in your salary bands to ensure fairness and competitiveness.
Many organizations assume a 3 percent annual cost-of-living adjustment will cover growth. In reality, big moments of expansion may require more aggressive increases—closer to 5–7 percent—to keep salaries aligned with market expectations and avoid compression.
This is where organizations often get caught: budgeting only for cost-of-living adjustments (COLA) when, in fact, periods of rapid growth demand far more than a standard 3 percent. Without building this into your plan, you risk falling behind the market almost overnight.
Every organization draws staff from different talent markets. A community resource center might employ teachers, health professionals, workforce development experts, and real estate specialists under one umbrella. Each requires different benchmarks. Some organizations design separate salary structures for each group or department. Others use broadband structures or one effective compensation structure that accommodates multiple lines of service.
The EdTech sector is a good example of this complexity. They often employ three distinct groups: central operations staff, curriculum designers from schools, and developers from the private sector. Paying each strictly at market value can create tension, as developers may earn far more than curriculum designers. Teachers are also used to predictable pay bands and step systems, while developers may expect variable pay or incentive-based structures.
This is where compensation philosophy design comes in. You must decide not only what the market pays, but also what culture you want to build. Compensation design becomes both an art and a science—balancing equitable pay, organizational values, and attraction of top talent. Anyone can purchase salary surveys and pull market data, but the more challenging work is deciding what to do with it. Compensation design is as much about aligning with your values and culture as it is about numbers—and that’s where judgment and expertise matter most.
Teachers may prioritize predictability and clarity in employee pay, while staff from sales and central office staff may expect incentive pay or broader compensation packages. Striking the right balance requires thoughtful planning and a human touch.
Part of who you benchmark against should be based on the geographic location of your talent market. Before 2020, this was more straightforward—you could benchmark primarily where your staff lived. Now, with hybrid and remote workforces becoming predominant, geography is more complicated. You may need to look beyond your immediate region to reflect the true markets where you are competing for talent.
If you want to recruit from major metro areas, you must benchmark against those markets, even if your organization is fully remote. If your staff is spread across the country, you may use a national average or group regions into tiers. If you have multiple locations where staff must be physically present to perform their jobs, locality becomes a key factor. In this case, one approach is to set a baseline pay range midpoint and then create tiers—typically 5 to 7 percent above or below it—depending on the cost of the specific geography.
This method is called geographic tiering. Tier A becomes your baseline, Tier B is set slightly higher, and Tier C slightly lower, based on research into geographic differentials across these markets. This approach ensures fair compensation without creating dozens of separate pay scales.
Organizations returning to in-person work or opening new branches in multiple cities must also adjust. A branch in Los Angeles cannot be benchmarked the same way as one in Tulsa. The goal is to ensure employee pay feels fair and competitive without creating an overly complex pay system. One added challenge is staff mobility: if an employee moves from a higher-cost market like New York to a lower-cost region, how will your pay system respond? Without clear policies, these situations can create internal tensions and perceptions of inequity.
And as your footprint expands, remember that your set of peer organizations shifts as well. Expanding from Tulsa to Los Angeles doesn’t just change cost-of-living—it changes the group of organizations you should compare yourself against.
Compensation is not a one-time project. Even if your organization has not changed, likely market trends and market data have. Reviewing your program every two to three years keeps it aligned with your mission, values, and current compensation packages.
If your growth is significant, a refresh may not be enough. You may need a full redesign of pay grades and pay bands. Otherwise, you risk losing staff to competitors, damaging morale, and facing the costly cycle of turnover. Waiting too long can create a spiral of frustration and burnout that becomes painful and expensive to reverse.
Regular upkeep is far less painful than rebuilding trust after the fact. The question is not if you will need to update your compensation plan, but when—and whether you choose to act proactively or reactively. The reality is that no organization can avoid this work forever. If you don’t review and adjust regularly, misalignment will manifest in increased turnover, difficulty hiring, and overall rising frustration. The only choice is whether to address it proactively or wait until the damage forces your hand.
Inaction leads to what we refer to as the “spiral of despair.” Staff leave for similar roles elsewhere, those remaining burn out from covering gaps, morale declines, and leaders are left scrambling. Regular upkeep is far less painful than rebuilding trust after the damage is done.
There is no one-size-fits-all approach to types of pay or types of compensation structures. Each decision must be tailored to your organization’s values, size, sector, and geography. A compensation structure for growth that was right ten years ago will not serve who you are today.
By aligning your salary bands, pay grades, and career paths with your growth and mission, you send a powerful message to team members. You show them this organization is committed to fairness, clarity, and sustainability. That commitment is not only an equity practice; it is the foundation of long-term impact.
Dive Deeper into Equity-Centered Pay Structures
Read our free eBook, Compensation with Purpose: Designing Equity-Centered Pay Structures for Nonprofits, Education, and Healthcare, and explore how to build a compensation philosophy that supports both your people and your mission.
Is your compensation structure keeping pace with your organization’s growth?
Let’s talk about how Edgility can help you design a sustainable, values-aligned approach to compensation. Schedule a Discovery Consultation and get the clarity you need to scale with integrity.