Interested in knowing what’s next for the gaming industry? Join gaming executives to discuss the emerging parts of the industry this October at GamesBeat Summit Next. Sign up today.
InnoGames announced that it will end guesswork about the salaries of most of its workers in the German games 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 salary that people with different levels of work experience can get. The salary bands cover approximately 80% of the company’s employees and provide information on the minimum and maximum earnings for various career levels in a total of nine career models.
InnoGames said that one of the reasons it shares payment data is to attract more female 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 US make on average 79% of what white men make, black women make 63% of what white men make, Native American women make 57% and Hispanic women 54%, according to a 2018 study report by the American Association of University Women.
Assessment of competition for talent
Pay transparency stems from the need to be more competitive, and pay bands are all based on supply and demand, Andreas Lieb, director of human resources at Innogames, said in an interview with GamesBeat.
“The war for talent is so intense that we believe the gaming industry cannot afford to deal with bias towards people or pay gaps towards women in the gaming industry and so on,” Lieb said. “We need to be prepared to compete for talent with any other industry as well.”
Lieb said the company does not have a union that represents employees. Unions often call for more transparency, but Germany has a different situation when it comes to unions, in part because of its pro-worker labor laws. The video game industry has between 10,000 and 12,000 people working in Germany. That means other industries are the biggest competition.
The German car manufacturer Porsche recently published its salary levels.
“We can say that we are the first gaming company in Germany to voluntarily hand over these numbers, salaries,” Lieb said. “It’s good that we’re doing it and I hope others do too.”
The company did not disclose salary bands for small departments where it would be very easy to calculate an individual’s exact salary. Therefore, you will not see salary levels for executives and others.
But it has salary bands for game developers, game designers, vendors, system administrators, artists, QA engineers, product managers, analysts, and community managers. According to the data, the lowest paid people are QA engineers, community managers, and artists.
The highest paying job roles include system administrators, game developers, and salespeople. The latter are more in demand in the age of accurate analytics and user acquisition.
In terms of addressing any pay disparities between men and women, Lieb said, “This is exactly addressing it.”
“Salary transparency is a matter of fairness, towards its employees and its candidates. That is why we have decided to share this information publicly, after initially making it available internally last year,” said Michael Zillmer, co-founder and COO of InnoGames, in a statement. “I hope this motivates other game companies to join us and help us debunk the misconception that our industry underpays people.”
InnoGames salaries are actually in the top third of the German market, according to a survey by Kienbaum Consultants International GmbH.
“We are getting information from the gaming council recruiters that we have in Germany with the other gaming companies,” Lieb said. “It reflects the market data.”
Lieb said the company expects several positive effects from our release, including lower dropout rates in the application process and increased appeal to talent outside of the games industry.
“We’re also sending a clear signal to potential female candidates 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 prospective applicants will benefit from this disclosure. We are aware that salaries can be a very sensitive issue and we are aware that the decision to publish our bands carries a certain level of risk, but we strongly believe that it is the right decision for both InnoGames and the industry.
The stated wages are gross wages for employees with a place of work in Germany, measured in euros. Wages in other countries may vary. All InnoGames job advertisements will contain salary information from now on, as long as 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 displaying individual salaries because that could create difficult relationships between employees, especially in small groups. The highest paid person and probably the lowest paid person will not like their status revealed. This could also be more difficult to do if the company had employees spread across many different countries where the cost of living difference is large and labor laws are different. In the case of InnoGames, most of the staff is based in Hamburg.
Germany has equal pay laws that aim to eliminate gender pay gaps.
The transition salaries indicated in the salary bands apply to employees who have not yet reached the next career level but who are on the right track while doing an excellent job. InnoGames has 428 employees.
In terms of crossing the bands from junior to regular to senior, an employee needs to be told what their skills are missing and how to fill that gap, Lieb said. That way, the employee will better understand how to make the transition.
As for raises, the company plans its budget once a year and reviews employees twice a year. There are no automatic processes. People get raises if they are deemed deserving of them, or based on the performance of their particular games.
“At first we had pretty positive subjective feedback,” Lieb said. “We are receiving 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. His best games include Forge of Empires, Elvenar, and Tribal Wars. The most recent additions are Rise of
Cultures and Sunrise Village, which had 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 needed to link salary bands to different experience levels and required job functions. The company built its internal knowledge, hired human resources staff, and implemented analytics. It also acquired salary data from external vendors. That helped the company create salary bands that matched market rates.
A year ago, the company posted the rates internally and then soaked up the feedback, and now it’s ready to share it publicly so you can use the pay rates to attract candidates. The company has established career plans for each role, so employees will be classified into roles such as junior artist, regular artist, senior artist, and then an expert level. Each candidate can be scored based on levels of experience and knowledge, and then paid within an appropriate salary band based on that information.
“That maintains flexibility on the one hand and transparency and fairness for the employee,” Lieb said.
Transparency helps manage employee expectations. Going to a job interview, a candidate won’t be surprised when the discussion pays off.
“You get rid of the importance of individual negotiating skills as a factor,” Lieb said. “You don’t have to be afraid that you sold for less than you expected or that you assessed the market value incorrectly.”
Germany has no problems related to crunch, Lieb said, due to the fact that it is illegal under German law. He noted that the industry recognizes that there are times when developers have more and less work, and that they can take time off to compensate if they’re 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 successes, which is why it has a stable and predictable income. Over 15 years, the company has not had any big waves of layoffs and achieved record revenue in 2020 with 200 million euros, or 223 million dollars.
The company measured overall satisfaction through the Great Places to Work survey, repeating the salary bands again in January 2022.
There is no separate measurement of underrepresented minorities, and Lieb said perhaps that could be a difference between American companies and German companies. The company is thinking about how it can incentivize long-term employees and also help boost people at other companies.
InnoGames is also addressing the impression that the games industry does not pay as well as other industries in the country, so the intention is to make the games industry attractive to talent, thanks to transparency.
“I invite our competitors to do the same because I think it’s fair,” Lieb said.
The GamesBeat Creed covering the games industry is “where passion meets business.” What does this mean? We want to tell you how news matters to you, not only as a decision maker at a game studio, but also as a gamer. Whether you’re reading our articles, listening to our podcasts, or watching our videos, GamesBeat will help you learn about the industry and enjoy being involved. Learn more about membership.