Recruiting veteran Jose Guardado suggests that startups generally be post-product-market fit with defensible revenue and enough size and complexity in their engineering organization—typically around 100 people—before they consider implementing levels. Series C funding appears to be a common inflection point for this, which also often coincides with when the startup begins considering creating an HR role. “Many companies don’t really start doing this, though, until they’re feeling some significant pain,” he notes.
Companies wishing to establish more formal levels typically use leveling rubrics from companies like Radford, Connery, or RHR. These companies establish a set of levels based on extensive survey data, including salary information that can be used to set compensation for each level. (At some point, likely when you get into the high hundreds to thousands of employees, you may find that the complexity of your organization merits a little extra help. Salary survey consulting groups specialize in helping companies do just this.) Here’s a sample level rubric from Radford, which specializes in technology and life science companies.
Figure: Radford Leveling Rubric
The Professional designations roughly correlate to engineering levels, and you can use this as a baseline to customize the specific impact details for each level to your needs.