Workers have struggled to negotiate higher salaries recently, with pay growth dropping to a 44-month low in October and showing little sign of change since, according to the latest UK Report on Jobs, published by KPMG and REC.
One company that has decided to tackle this downward trend is Photoroom. The AI photo-editing app has introduced negotiation training for all employees in a bid to help staff put forward their case during pay discussions.
This may sound counterintuitive to many business leaders, but could be the key to promoting pay equity.
“We know talking about money can sometimes be uncomfortable and it differs between cultures, backgrounds and professional experience,” says Mikael Nilsson, Photoroom’s head of people. “Our goal is to make sure that people are compensated fairly.”
The training programme runs every six months and has helped to transform salary discussions. At other companies, Nilsson claims that pay negotiations can sometimes feel like a competition between the employer and employee. By making the process more transparent and sharing the salary benchmarking tools Photoroom uses to calculate pay, Nilsson says discussions have become more constructive in tone.
“We don’t want people to feel like we’re trying to shortchange them,” Nilsson says. “It’s the opposite of creating competition, you’re trying to win together.”
Creating better negotiators
Matthieu Rouiff, CEO and co-founder of Photoroom, says the policy was questioned by other founders when it was first introduced three years ago. Many thought it would cause employees to demand higher salaries, with little other benefit for the business.
However, there have been several positive consequences for the organisation. Photoroom doesn’t have a procurement department, so every agreement with a supplier has to be negotiated by individual employees.
By training people in negotiation tactics, the business has been effective at driving down the prices it pays for certain services. “I’d rather pay people more and get good deals with our contractors and providers than pay people less,” Rouiff explains.
It also allows staff to operate with greater autonomy, he says. “We wanted to build an impactful team, where people were empowered to buy the tools that make them more productive,” Rouiff adds. “We want to trust people.”
I’d rather pay people more and get good deals with our contractors than pay people less
The policy has also helped with retention. Since being founded in 2019, the business has experienced “very little” voluntary turnover, according to Rouiff, with the few people who have left moving on to start their own businesses or to be part of the founding team somewhere else.
“We want people to stay at Photoroom because they have an impact and they love the mission,” Rouiff says. “You shouldn’t stay longer because of the compensation. You need to match the market, otherwise people stay for the wrong reasons. It’s about being fair and reasonable.”
Despite the benefits, Rouiff does not believe salary negotiation training is suited to every business. “It only works well because we have highly skilled people who are trusted to make decisions on their own,” he adds.
It’s important for companies to have a pre-existing culture of transparency in order to make a similar policy work. For example, Photoroom operates a no-direct message policy on its internal channels in order to encourage more open conversation. “It needs to be aligned with the company vision,” says Rouiff. “That has to be the starting point.”
However, by making the negotiation process more transparent and teaching staff how to navigate it, companies could remove some of the stigma that surrounds pay discussions, improve pay equity and create a group of strong negotiators for the business in the process.
