Pay is one of those things that founders think they can figure out later. Matt McFarlane, compensation consultant and founder of FNDN, has spent years cleaning up the mess that "later" creates.
I sat down with Matt as part of the HR Influence Awards 2026, where he was named in the Top 12 for ANZ. The full interview is worth your time. But I want to pull out the ideas that hit hardest, because they apply to anyone building a team in a growing company.
In this article:
- "People debt" is the compounding cost of making pay decisions without structure, and it works the same way as technical debt.
- Most "bad hires" aren't bad people. They're people who were badly set up from day one.
- HR teams already do strategic work. The problem is they don't market it internally.
- Defining anti-values (what bad behaviour looks like) matters as much as defining values.
- Turnover data tells you what already went wrong. The real signals are qualitative and earlier.
McFarlane paints a picture that will feel familiar if you've worked in a company growing fast. A founder is shipping a product. A candidate asks for $150,000. The founder says yes and moves on. Then the next hire for the same role asks for $170,000 and gets it too. Two people, identical work, paid differently. They will find out.
McFarlane calls this "people debt," borrowing deliberately from the tech world. Just like technical debt, it compounds. Quick fixes now become painful restructures later. And unlike technical debt, people debt walks into your office and asks why their colleague earns $20,000 more for the same job.
The fix isn't bureaucracy. It's doing some formative thinking about pay structures early enough that you're not constantly patching holes. The companies McFarlane works with through FNDN are typically 30 to 200 people, right in the zone where these decisions have outsized consequences.
This is the kind of structural work that gets deprioritised in fast-growing companies. Founders focus on product, then sales. HR comes last. And by then, the people debt is already deep.
I asked McFarlane about bad hires. He pushed back on the term.
"Almost nobody gets out of bed and goes, you know what, I'm gonna do a shit job today," he said. "These people don't really exist. People want to come to work, they want to be productive, they want to have a purpose."
The problem, nine times out of ten, is a lack of clarity. The person didn't have clear expectations. They didn't know how success was measured. They weren't set up to win. Labelling them a "bad hire" puts the blame on the individual when the system was the issue.
According to the CIPD's 2023 Resourcing and Talent Planning report, 45% of employers in the UK and Ireland reported that the quality of hire was harder to assess than five years ago. It's not that people are worse. It's that organisations still struggle to define what good looks like before someone starts.
McFarlane takes this further. He argues that companies should define what bad looks like too. Not just values, but anti-values. What are the behaviours you don't want to see? Getting to that level of clarity, and involving the team in the process, is where culture stops being a poster on a wall and starts being something people actually use.
McFarlane's sharpest observation landed when we talked about how HR is perceived inside organisations. He started with Toby from The Office.
Everyone knows Toby. Sits in the back office, only appears for mandatory training, gets called in when there's a problem. McFarlane's point is that most people have seen more of Toby than they have of actual HR professionals doing strategic work. Popular culture has conditioned them before HR even walks in the door.
"In many ways we already are strategic," he said. "We're just doing a really bad job of marketing it."
His solution is blunt. HR teams need a roadmap. They need to broadcast what they're working on. They need to tell the business what they're there to achieve, and what they're not there for. Stop letting the organisation define what it thinks HR does based on a sitcom and a few awkward compliance conversations.
This hits close to home for us at Compono. A big part of what we build is designed to give HR leaders the data and the language to show their impact. Compono Engage gives you culture and engagement data that makes the invisible work visible. When you can show the board a sentiment trend before turnover spikes, you're not Toby any more. You're the person who saw it coming.
Speaking of seeing things coming, McFarlane made an argument that cuts against the data-obsessed culture most businesses have adopted. He says that by the time turnover shows up on a dashboard, you've already lost.
"These people have walked out the door. You've lost that knowledge. You're having to replace them. You're bearing the cost."
The real signals are qualitative. They live in the undercurrent of conversation, in the things people flag informally. Organisations that listen well catch problems early. Organisations that wait for the quarterly engagement report are already behind.
Research from Gallup backs this up. Their 2024 State of the Global Workplace report found that 77% of the global workforce is disengaged, and that managers account for 70% of the variance in team engagement scores. The data is a trailing indicator of something that was happening months earlier in day-to-day interactions.
This doesn't mean you stop measuring. It means you pair measurement with listening. You use tools that capture sentiment in real time, not just once a year. And you train managers to notice the early signals before they become an exit interview.
The moment in our conversation that landed hardest was McFarlane's third piece of career advice. He wishes he'd been a better advocate for himself.
"I think it's very easy for us as a profession to feel like we have to be impartial even about ourselves," he said. "Our own progression, our own development, what we pay. That mindset needs to be parked."
Then he paused.
"You've got to go to bat for yourself because it's a lonely job. You spend all day thinking about everybody else."
I've heard versions of this from almost every winner in the HR Influence Awards so far. HR professionals are good at celebrating others and terrible at celebrating themselves. It was one of the reasons we started the awards in the first place.
The full feature article covers McFarlane's path from psychology graduate to compensation consultant, how he built pay structures across 70 countries at Oyster, why he started FNDN, and what he wishes he'd done differently earlier in his career.
Matt McFarlane is Founder and Director of FNDN and the Startup People Summit. He is a 2026 HR Influence Awards Top 12 ANZ and LinkedIn Top Voices Australia 2025. Connect with him on LinkedIn.
What is people debt?
People debt is the compounding cost of making pay decisions without structure in a growing company. The term borrows from "technical debt" in software development. It happens when founders agree to different salaries for identical roles because they're moving fast, creating inequities that get harder and more expensive to fix over time.
Why do startups hire HR too late?
Most startup founders prioritise product and engineering before thinking about HR or people operations. Sales and marketing come next. HR comes last. The assumption is that culture and pay structure can be handled informally while the company is small. By the time they hire a dedicated HR person, pay inconsistencies, missing policies, cultural drift, and informal workarounds have already built up.
How can HR teams prove their strategic value?
Matt McFarlane argues that HR teams need to market themselves internally. That means building a roadmap, broadcasting what they're working on, and using data to show their impact on business outcomes. Real-time engagement and culture data, rather than annual surveys, helps HR leaders show trends before they become problems.
What are anti-values and why do they matter?
Anti-values are the explicit opposite of your company values. They define what bad behaviour looks like, not just what good behaviour looks like. McFarlane argues this second step is where culture becomes real and actionable, because people can more easily recognise specific negative behaviours than abstract positive aspirations.
Every company says culture matters. Few can actually measure it. Compono Engage gives HR leaders real-time visibility into team sentiment and culture alignment, so you can act on the early signals instead of waiting for the exit interview.
See how it works and find out what your current tools aren't telling you about your people.