Cost Centre to Profit Centre: How to personally gain

Question

I am a Software Engineer in a very Sales focussed company. Software Engineers are Cost Centres, Sales are Profit Centres.

A product I built and own now accounts for sizeable chunk of the company's revenue, and by most accounts kept the company running during the initial COVID lockdown. We're talking maybe $1m revenue per month, of which maybe $400k is profit.

No Sales people are involved in this product, think of it like something a hedge fund would do.

All our Sales people earn bonuses and commissions. Software Engineers do not (higher-up management do get bonuses).

How can I argue that I too should be on a bonus/commission scheme (along with all the difficult-to-meet targets that Sales people get). My base salary is quite good but not at FAANG levels. I don't earn 6 figures for example, but not far off.

Edit: I'm not asking to get a pay rise, I'm asking to be put on a Bonus scheme. A scheme that no other employees in my group would be on.

Answer 1

Try to manoeuvre yourself into a management position.

If your program is as vital to the company as you believe then it may be possible to justify a special layer of management. Ideally this should be functionally similar to your current role but maybe you get put in charge of an intern or something. If you are lucky then you may be asked to write the job description (it happens!) which you should make as specific to yourself as possible.

This gives you career progression while also making you eligible for bonuses. Don't talk about bonuses when you negotiate the position... allow them to manifest in due course.

I'm not asking to get a pay rise, I'm asking to be put on a Bonus scheme. A scheme that no other employees in my group would be on.

This is unrealistic. People are advocating that you try for a pay rise because it doesn't challenge the status quo.

Answer 2

How can I argue that I too should be on a bonus/commission scheme (along with all the difficult-to-meet targets that Sales people get).

You should come up with targets appropriate to your role, and propose a new (likely much lower) base salary and a commission plan.

Make sure that your new scheme is based on future company income that is directly attributable to work you will do in the future, not work you have already done (for which you have already been compensated).

Be aware that it is extremely unlikely that you will be granted such a scheme. Companies tend not to create single-person salary and bonus structures.

I suspect you are actually looking to be rewarded for your part in creating the existing revenue-producing product. In that case, you would be better off arguing for a one-time bonus, than attempting to change your entire compensation plan. The bonus/reward is far more likely to be achievable.

Answer 3

You don't own the product, you created and maintain it for the company, so you have no real leverage except goodwill and what you can do for the company in the future. This is a very normal state of affairs.

As Joe said you might be best off asking for a bonus, the company has no incentive to do anything else or even that really. The downside is pushing for extra citing a product the company owns might become a simple business equation that ends with you needing another job. It may come across as blackmail tactics.

It's absolutely normal for a company to make money out of their employees work.

Answer 4

How to profit from doing excellent work at your job:

1. Ask for a one-time bonus.
2. Leverage the goodwill into a role with higher compensation.
3. Shop around other companies with the accolades pinned on your sleeve.

The ambitious usually do all of these.

How NOT to profit from the same situation:

1. Extortion.
2. Threats of leaving.
3. Bad mouthing or complaining.

I've been where you are. Learn a lesson in how valuable ideas and implementation are and be smart about how you position yourself in similar future situations.

Answer 5

It's do able, but it really depends on what you did.

If you just wrote the code, or manage the code, but someone else came up with the specifications and idea, then it's not going to work.

If you came up with the idea, or wrote the specifications that made this product successful, then you can make a strong argument.

Engineers think what they do is special, but from a business point of view it is not. Implementing an idea does not make a company money, it is the idea itself that does. Let's say this hedge fund idea is to buy stock at A, and sell at B. That's what makes the money. The actual operations person who puts the various orders in doesn't actually make that much money, the real genius is picking the stock.

So. If you're doing engineering work then you're not actually contributing to the money making. You might not be screwing it up - the execution might be sound - but that's just a reason to keep your job.

If otoh you are actively seeking out and making improvements /features that themselves make money, then you ARE liable for a bonus. The easiest way to do this would be to go to a competitor, explain how you can make them money, argue for a bonus scheme, then take that offer back to company

If you are actively bringing in money you can always argue for a cut of it.