Great Talent Is Expensive. Pay for It.

Great talent is expensive. You should pay for it.

We come across the same conversation a lot at lemonly, especially with founders. We find exactly the person they're looking for. The interview goes well. Reference checks come back glowing. And then – the offer stage. The candidate names a number. Sometimes it's higher than the founder was hoping. Sometimes it's much higher. And sometimes the same thing happens with two or three candidates in a row, all asking for roughly the same.

The feedback I hear back is usually some version of: "the right person should be excited about the mission. If they're optimising for pay, they care about the wrong things."

I get the instinct. If a candidate only cares about pay, that's probably not your person. Missionaries beat mercenaries almost every time. But in my experience, it rarely actually comes down to pay alone – and the version of this argument that ends with the founder offering 30% under market is usually a quiet way of losing the hire they wanted.

Why great hires expect great pay

Most great candidates care about lots of things at once: the work, the team, the challenge, the chance to grow. They also care about being paid well. Not because they're greedy, but because they're commercially minded – which is, almost certainly, why you wanted them in the first place.

The skills that make somebody great at their job – assessing value, negotiating well, thinking commercially, managing their own time as a scarce resource – are often the same skills that make them expect fair compensation. A candidate who undervalues themselves badly during your offer process is going to undervalue your product, your roadmap, and your customers once they're inside the company. That's the same muscle.

The irony in the founder's argument

The "if they're optimising for pay, they care about the wrong things" framing is doing a quiet category swap. It substitutes "this candidate names a market number" for "this candidate only cares about money" – which is rarely what's actually on the table.

In ten offer-stage negotiations I've sat in on, exactly zero of them have been with a candidate who cared only about pay. What's actually happening is the candidate's listing four things they care about (mission, team, growth, comp), and the founder is hearing only the comp one because it's the one they're paying directly for. The candidate is being judged for naming the number. They are not being judged for the other three things they also said.

The candidate who arrives at the offer stage saying "I love what you're building, the team is great, here's my number" is not a mercenary. They are someone who has done the same diligent commercial assessment of your opportunity that they will do on every commercial decision once inside the company. That's exactly the muscle you want them flexing.

What the data says

The retention data is the bit that should worry any leader treating compensation as a line-item to seal a good deal on. 73% of employees would consider leaving their current employer for a higher paycheque. That's not a mercenary statistic. That's the floor – the share of your workforce that is actively rational about its own market value, even when otherwise content.

On the offer-side specifically: about 38% of hiring managers who expected high turnover named "better pay elsewhere" as the number-one reason. And the cost of replacing a regretted hire is well-studied: roughly 30% of the role's first-year salary. The maths on "save $20k on the offer, lose them in 14 months, spend $40k re-hiring" is not subtle.

The Netflix model

The cleanest worked example of paying top of market belongs to Netflix. Netflix famously pays "personal top of market" – the highest number an employee could earn doing the same job anywhere else. They actively benchmark against the upper bound of the market for each role and pay to the top of that band as a matter of policy.

The result is a retention rate of over 95%. They get to be ruthless about quality on the way in, ruthless about performance on the way out, and almost never lose the hires they want to keep to a competing offer – because there isn't a meaningful one to lose them to.

Most companies aren't Netflix. The principle still holds. Paying somewhere visibly above the median for the role you've just decided you want filled, by the candidate you've just decided you want to hire, is one of the highest-leverage compensation decisions you can make.

The obvious push-back

The fairest critique of "pay top of market" is the one most founders implicitly make: there are roles where mission and equity should compensate for cash, especially in early-stage startups, and there are markets where paying top of band on every role would consume runway too fast.

The grain of truth: the equity-vs-cash trade is real, and early-stage companies do compete on upside as well as cash. The flaw in the argument: most founders apply the discount much more aggressively than the equity-equivalent justifies, and they apply it most aggressively to the role they secretly feel is hardest to fill – which is precisely the role where underpaying creates the highest re-hire risk.

The right move isn't to pay top of market for every role. It's to be honest about which roles you have decided are critical, and then pay deliberately above market on those specifically – instead of applying a uniform "we don't pay top of market" rule that quietly costs you the hires that would have moved the needle.

How to actually pay top of market

Three concrete moves.

1. Decide which roles you are explicitly paying above market for, and write it down. Not every role – but the critical ones, named. Put a small premium (10–20% above your published band, say) on those roles in your internal comp policy. Treat it as a deliberate strategic choice, not an exception you keep making case by case.
2. Benchmark to the actual top of band, not the median. Pull comp data from Levels.fyi, Payscale, Pave, Ravio, or whichever benchmarking source covers your market. Anchor on the 75th–90th percentile, not the 50th. That's what "top of market" actually means.
3. Then create the conditions for the hire to deliver. Clarity on the work. Autonomy on the how. Real support from the team. Paying top of market for someone you then micromanage into average performance is the worst of both worlds.

And if the results don't follow despite all of that – act quickly and decisively. The same commercial logic that justifies paying top of market also justifies acting fast when the pay isn't earning its return.

Where lemonly fits

We built lemonly in part because by the time we put a candidate in front of you, the question of "is this the person?" has been answered. Our candidate screening product evaluates every applicant against your specific role outcomes and gets you a tight shortlist that we know meets the bar you've defined. Which means the conversation that's left at offer stage is whether you want to make the investment in the person you've already decided you want – not whether you can find a slightly cheaper version of them.

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Common objections, answered

Doesn't paying top of market signal we're a "money-first" culture?

It signals that you treat compensation seriously. Companies that publicly pay well for great work tend to attract people who care about doing great work; companies that publicly underpay tend to attract people for whom your offer is the best option they currently have. The latter is not the culture you want.

What if a candidate names a number well above market?

Then it's a real negotiation, and the answer might be no. "Top of market" is not "any number the candidate names"; it's the upper end of what the role pays in your market. Have the data to hand, name your top of band, and be honest. A candidate worth hiring will respect a benchmarked number; a candidate who walks because of one was probably going to walk for a different reason next quarter.

Should we pay equity instead?

Equity is part of compensation. The mistake is using it as an excuse to underpay cash badly. Most candidates can value equity reasonably well at this point, and they discount it appropriately for risk. Build a comp package where the cash + equity combination genuinely lands at top of market when probability-weighted; don't pretend a high equity number on paper is the same as a high cash number in the bank.

How do we afford this if we're early-stage?

Pay top of market for the small number of roles you've decided are critical, not for every role. Be honest about the trade. Be honest with candidates about the equity-cash ratio. Being transparent about what you're paying for and what you're not is a far better signal to a great candidate than blanket "we don't pay top of market" rhetoric.

Key takeaways

• Great hires expect great pay because they're commercially minded – which is the same trait that makes them good at the job.
• The "if they're optimising for pay, they care about the wrong things" framing usually swaps "names a market number" for "only cares about money". They are not the same thing.
• 73% of employees would consider leaving for a higher paycheque; a regretted hire costs ~30% of first-year salary. The maths on undershooting offers is bad.
• Netflix's "personal top of market" plus a 95%+ retention rate is the worked example. Most companies aren't Netflix; the principle still holds for the roles you've decided are critical.
• Pick the roles that are critical, benchmark to the 75–90th percentile of band, then create the conditions for the hire to deliver. If they don't, act quickly. That's fair too.