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InnoGames announced it is ending guesswork about salaries for most of its workers in the German game business in a bid to be more transparent.
The Hamburg, Germany-based company said it is the first German gaming company to openly publish its salary bands, which reflect the target pay for people with varying amounts of work experience can get. The salary bands cover approximately 80% of the company’s employees and provide information on minimum and maximum earnings for various career levels across a total of nine career models.
InnoGames said that one reason it is sharing pay data is to attract more women candidates to the company. Time Magazine said in 2018 that women’s rights advocates have urged companies to adopt full pay transparency policies to close the pay gap, which is often worse for both women and women of color. Time said that white women in the U.S. on average earn 79% of what white men make, black women earn 63% of what white men make, Native American women bring in 57%, and Hispanic women are at 54%, according to a 2018 report from the American Association of University Women.
Evaluating competition for talent
The salary transparency stems from the need to become more competitive, and the salary bands are all based on supply and demand, said Andreas Lieb, director of human resources at Innogames, in an interview with GamesBeat.
“The war for talent is so intense that we believe that the gaming industry cannot afford to deal with prejudices towards people or pay gaps regarding women in the games industry, and so on,” Lieb said. “We need to be prepared to compete for talent with any other industries as well.”
Lieb said the company does not have a labor union representing employees. Unions often ask for more transparency, but Germany has a different situation when it comes to labor unions, in part because of its worker-friendly labor laws. The game industry has an estimated 10,000 to 12,000 people working in Germany. That means that other industries are the biggest competition.
German car maker Porsche recently published its salary levels.
“We can say that we’re the first game company in Germany to actually voluntarily hand out these numbers, salaries,” Lieb said. “It’s good that we’re doing it and I’m hoping that other ones will do this too.”
The company did not disclose the salary bands for small departments where it would be very easy to figure out the exact pay of an individual. So you won’t see salary levels for executives and others.
But it has salary bands for game developers, game designers, marketers, system administrators, artists, quality-assurance engineers, product managers, analysts, and community managers. Based on the data, the lowest-paid people are the QA engineers, community managers, and artists.
The highest-paid job functions include system administrators, game developers, and marketers. The latter are in more demand in the age of precise analytics and user acquisition.
In terms of addressing any disparity in pay between men and women, Lieb said, “This is exactly addressing it.”
“Salary transparency is a matter of fairness – towards your employees and your applicants. That is why we have decided to share this information publicly, after initially making it available internally last year,” ” said Michael Zillmer, cofounder and COO of InnoGames, in a statement. “I hope that this will motivate other games companies to join us and help us debunk the long-standing misconception that our industry pays people poorly.”
InnoGames’ salaries are actually in the top third of the German market, according to a survey by Kienbaum Consultants International GmbH.
“We’re getting information out of the recruiters out of the games council we have in Germany with the other gaming companies,” said Lieb. “It’s reflecting the market data.”
Lieb said the company expects several positive effects from our publication, including lower dropout rates in the application process and greater attractiveness for talent from outside the games industry.
“We are also sending a clear signal to potential female applicants that pay gaps don’t exist at InnoGames,” he said. “The bottom line is that this is a ‘win-win-win’ situation. The company, our employees, and current and future applicants all stand to benefit from this disclosure. We appreciate that salaries can be a very delicate topic, and we are aware that the decision to publish our bands comes with a certain level of risk, but we firmly believe this is the right move for both InnoGames and the industry.”
The salaries stated are gross salaries for employees with place of employment in Germany, as measured in euros. Salaries in other countries may vary. All of InnoGames’ job advertisements will contain salary information from now on, provided that a salary band has been defined for the career model in question.
Due to cost/benefit considerations, a salary band will only be created once at least six employees share the same career model.
The company decided it wanted to avoid exposing individual salaries because that could create difficult relations among staffers, especially in small groups. The highest-paid person and probably the lowest-paid person won’t like it if their status is revealed. This also might be harder to do if the company had employees spread across many different countries where the cost of living difference is big and the labor laws are different. In the case of InnoGames, most of the staff is in Hamburg.
Germany has equal pay laws that are aimed at eliminating gender pay gaps.
The transitional salaries indicated in the salary bands apply to employees who have not yet quite reached the next career level but are on the right track and at the same time doing an excellent job. InnoGames has 428 employees.
In terms of crossing the bands from junior to regular or senior, an employee should be told what is missing from their skills and how to plug that gap, Lieb said. That way, the employee will better understand how to make the transition.
As for raises, the company plans for its budget once a year and it reviews employees twice a year. There are no automatic processes. People get raises if they are viewed as deserving them, or based on the performance of their particular games.
“At the beginning we quite had positive subjective feedback,” Lieb said. “We are getting more detailed analytical feedback.”
InnoGames is certified as a Great Place to Work. It was founded in 2007 and is still run by its founders. It’s top games include Forge of Empires, Elvenar and Tribal Wars. The most recent additions are Rise of
Cultures and Sunrise Village, which saw successful commercial launches in early 2022. It is owned by MTG.
Lieb said the company has been exploring this topic since 2016. It needed to establish a baseline for career development, and it needed to link salary bands to the different levels of experience and the job functions needed. The company built up its internal knowedge, hired HR people, and put analytics into place. It also acquired salary data from external providers. That helped the company create salary bands that fit the market rates.
A year ago, the company published the rates internally and then absorbed the feedback, and now it is ready to share it publicly so it can use the pay rates to attract job candidates. The company has set up career plans for each role, so that employees will be categorized into roles such as junior artist, regular artist, senior artist, and then an expert level. Each candidate can be rated according to levels of experience and knowledge, and then paid within a fitting pay band based on that information.
“That keeps flexibility on the one hand and transparency and fairness to the employee,” said Lieb.
The transparency helps manage employee expectations. Going into a job interview, a candidate will not be surprised when the discussion comes to pay.
“You get rid of the importance of individual negotiation skills as a factor,” Lieb said. “You don’t have to be afraid that you undersold yourself or that you evaluated the market value in the wrong way.”
Germany doesn’t have issues related to crunch, Lieb said, due to the fact that it is illegal under German law. He noted the industry recognizes there are times when developers have more work and less work, and that they can take time off to compensate if they are working harder at certain times.
“We are legally framed here by German law, as well as InnoGames’ own mindset of valuing sustainability,” Lieb said.
InnoGames has also had long-lasting hits and so it has stable and predictable revenues. Across 15 years, the company has had no major waves of layoffs and it hit record revenues in 2020 with 200 million euros, or $223 million.
The company gauged overall satisfaction through the Great Places to work survey, and it iterated on the salary bands again in January 2022.
There is no separate measurement of underrepresented minorities, and Lieb said perhaps that might be a difference between U.S. companies and German companies. The company is thinking about how it can incentivize employees over the long term, and also help lift people in other companies.
InnoGames is also addressing an impression that the game industry doesn’t pay as well as other industries in the country, and so the intention is to make the game industry attractive for talent, thanks to the transparency.
“I’m inviting our competitors to do the same because I think it is fair,” Lieb said.