Seniority is uncorrelated with people management skills. Some junior people are cut out to be great managers, and a great senior person might be better suited as an IC. Rather than pigeonholing senior employees into people management roles, providing them a way to self-select into a “management” vs. “IC” track (even early in a company’s life) enables them to do their best work.
A strong people manager kept in an IC role is a tragic waste. A great individual contributor who becomes a bad people manager can destroy a team (or even company).
This is a fairly widely-accepted view; below are some thoughts on how to set this up.
By the time you start having management layers, you should have decided if each function should have an IC trajectory at your company. In general,
The “creative” / “building” functions like research, engineering, sales, and legal almost certainly should. The very best people in the creative functions are much, much better (the proverbial “10x” employee), and it’s very possible that if they enjoy IC work, they’re far more valuable to the company in that role.
The “intermediating” or coordinating functions like product, growth, corporate development, marketing strategy, etc., *could* have both people management + IC tracks (where senior ICs are facilitating bigger or more important initiatives), or only people management tracks. This is probably unique to each company, based on size of team, culture, and so on.
Well established functions, where the roles are pretty clear cut and the key is more about execution (corporate functions such as customer support, most finance functions, most people ops functions, compliance) most likely don’t need IC tracks ascending to senior levels like band 6 or 8, unless there’s something unique and idiosyncratic about your company.
Two potential pitfalls to watch out for:
Right off the bat, don’t stunt compensation for people who pick the IC track. Move highly talented people rapidly up the bands. It should be entirely achievable for both a very senior / top-notch IC and a VP to be banded at the same level, and make the same fully loaded compensation.
Make sure that senior ICs report to sufficiently senior people managers to avoid political concerns. For example, a senior IC in Band 6 should report to a Band 7 or 8 manager.
Discuss with each hire which track they’re interested in, and hire / groom them accordingly. Refresh this every 6 months and augment the initial information with performance reviews. If an IC gets glowing recommendations for their team spirit and empathy, raise the question of people management. If a manager gets de-energized by meetings and would rather put their head down and crank out work, or receives mixed feedback on their management skills, discuss their interest in being a high-caliber IC instead.
Make sure those who pick the people manager track are actively coached and mentored by excellent people in that track, especially if they have limited prior experience, or if they’re at an inflection / decision point.