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Transforming Compensation Practices as a Foundation for Growth

Transforming Compensation Practices as a Foundation for Growth

My wife and I founded Home Science Tools in 1994 when we discovered, through personal experience, how difficult it was for parents homeschooling their children to find good resources for teaching science. We launched Home Science Tools, and it grew steadily; there was indeed a demand for this service! By about 2015, we had grown to a $6 million business with 30 employees, and we were starting to face growth-related challenges. We had ideas about how to grow further, but our structure and team at the time did not seem poised to take it to the next level. We knew something had to change.

There were many reasons we struggled with growth at this stage, but we soon realized that, at the heart of it, was our approach to taking care of our team, and specifically compensation management. We had tried versions of benchmarking salaries, worked toward ensuring fairness, and strived to create clarity for employees about their growth and earnings potential. But ultimately, we realized nothing could change until we embarked on a thoughtful overhaul of our pay structure that could solve internal administrative headaches and also strengthen employee trust and satisfaction. It had to start with a scalable, transparent compensation system.

Like many small businesses, the first thing we realized we had to address was Human Resources. Especially on small teams, HR functions often fall to multiple team members, who juggle many responsibilities. At Home Science Tools, at this stage, we lacked dedicated HR resources, and this was the start of some of our recurring problems. Chief among them was how to benchmark compensation effectively.

Up until this point, in an attempt to attend to this issue, we had participated in benchmarking surveys, but the data often didn’t fit our positions. Further, on some of the surveys, the midpoint for a role would jump or drop significantly from one year to the next. The issue was compounded by the small sample size of local surveys. Data inconsistencies—likely due to the variety of industries represented in our region—created more questions than answers. All of this combined to make us question how accurate, reliable, and applicable the data was.
For employees, this uncertainty sometimes resulted in their feeling undervalued. For managers, whose primary role was not HR to begin with, it was a time-consuming and frustrating process of sifting through conflicting reports.

While the trouble started with benchmarking, it spilled over into adjacent areas as well; we struggled with defining pay ranges for our growing list of roles and determining how to position employees within those ranges. Without a formal compensation philosophy beyond paying slightly above market, decision-making became inconsistent. We had no structure, it was haphazard, and everyone felt it.

Once we had identified this core issue, we had to figure out how to solve it. In 2018 or 2019, I came across Payscale (now called PayFactors), a compensation management tool that has proven to be transformative for us. The platform offers access to a vast database of salary information and uses algorithms to tailor data to specific geographic areas and company sizes. Through Payscale, we were introduced to the concept of salary ranges set at the company level. We could slot positions into these ranges and adjust them annually based on market trends. And thanks to their rich database and sophisticated algorithms, we were able to make compensation decisions with great confidence, as opposed to under our previous method.

Through this work, we created an ascending salary scale with defined grades. At the same time, we developed a comprehensive compensation program document, outlining the philosophy, purpose, and policies guiding our new approach.

Once we had addressed compensation, we were able to tackle many more issues effectively. Recognizing the importance of career growth, especially as an Evergreen®, People First company, we created high-level career paths. While we didn’t draft job descriptions for every hypothetical role, we outlined clear paths for advancement within the company. This provided employees with a clear understanding of their next steps and gave them specific goals toward which they could work.

The result? A system that was easier to administer, more transparent for employees, and adaptable to the company’s growth. Our work succeeded in improving both internal processes and the employee experience. We gained a great deal of confidence in our pay structure, which has allowed us to attract and keep better people. Conversations about performance and raises are now grounded in a structured system, which fosters trust and alignment between leadership and staff. Importantly, our compensation program document is accessible to all employees, further reinforcing transparency.

Since implementing the new system, Home Science Tools has seen significant growth. Revenue doubled from $6 million in 2019 to almost $12 million in 2025. While employee headcount has increased more modestly—to 42 employees—the streamlined processes have allowed the company to scale effectively.

When I look back on this process, and specifically on how our work around compensation has affected our overall success, I see it as one piece of a larger puzzle. While compensation was never the loudest or the most obvious problem, I now realize the extent to which clearly showing employees how much we value them and their growth can, in turn, affect overall performance and company growth. Making room for openness about pay and career opportunities has brought about a key cultural shift. By aligning employee aspirations with company goals, the system supports both retention and engagement.

Looking forward, I know our work is not done. (It never is!) We are approaching 50 employees, and I anticipate that additional HR complexities lie ahead. While we have been able to rely on tools like Payscale for compensation management, eventually, a full-time HR professional will become necessary. For now, the structured compensation program continues to serve as a scalable solution, enabling growth without overburdening the team.

I’d say the overall lesson here is that small businesses looking to grow need to adopt the perspective of seeking and implementing scalable systems early. Our compensation challenges were probably typical of a small but growing company, but through a wider lens, they represent a great example of a system that was not scalable, and then became scalable. If you wait until your growth objectives demand it, you have to wait until the problem is solved to move forward and you can lose time. If you get out in front of it, you will miss fewer opportunities as you grow.

It’s also a great example of how you can solve a problem in the period after a certain expertise becomes necessary, but before you have the ability to bring it in house. Whatever challenge you are facing, there is a good chance that a tool like Payscale exists to help you solve it.

Finally, it’s a reminder of the power of valuing your employees and truly putting People First. As we have heard many times, take care of your people, and they will take care of the company. Together, you will be poised to succeed.

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