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Breaking Workplace Taboos: A Conversation About Salary Transparency

Would you work at a company where your salary is disclosed? One company's quest to “default to transparency” in all possible cases.


Joel Gascoigne’s salary is $118,000 a year and he doesn’t care who knows it. The co-founder of Buffer, a 10-person startup that allows users to schedule social media updates, Gascoigne is the proponent of a radical new way of doing business where there is no cloak and dagger, where every employee knows everything that is happening in the business.

It’s part of Buffer’s policy to “default to transparency” in all possible cases, a way of working that the company believes will become the norm rather than the exception. (And Buffer isn’t the only company that thinks radical transparency is the future of business.)

In American business culture, asking your coworker their salary is among the most taboo of conversation topics. An unspoken rule of information sharing within organizations is often: if it doesn’t pertain to your job, you don’t need to know about it.

Meanwhile, other parts of our society are becoming more transparent and our privacy less essential. We willingly let our friends know where we are with check-ins on Foursquare and Facebook. We use Airbnb to open our homes to total strangers. Such practices would have seemed unfathomable less than a decade ago. Now? It’s just the effect of technology on our lives, an acceptance of the way things are going. So why haven’t our working lives followed suit? And should they?

“We see no reason not to share everything,” says Gascoigne. And he backs it up. The company posts the salary of every single employee to an internal wiki, as well as the formula used to calculate it.

A screenshot of Buffer's internal wiki, featuring its salary formula (click to enlarge).

A screenshot of Buffer’s internal wiki, featuring its salary formula (click to enlarge).

Using a handful of variables like location, experience, and role, Buffer sets a standard salary for each of its employees. Additionally, each employee can choose to be paid an additional $10,000 or instead take more equity. Gascoigne’s formula is $118,000 = Founder ($80K) * Advanced (1.2x) +  San Francisco ($22K) and is listed with every other employee’s formula for everyone to see.

“We did have to take a little bit of a leap,” he says about nailing the formula. “If we wanted 100 percent confidence we would not have been able to do this.”

The company is even considering opening their internal wiki to the public, salaries and all.

At 99U, we’re always interested whenever anyone bends our normal interpretation of workplace norms so naturally we wanted to know how it worked. Gascoigne shares details below:

On Giving Raises:

“We haven’t had anyone ask for a raise yet,” says Gascoigne, “But we have introduced new levels and variables to the formula. As we grow we’ll need more team leads, for example.” If someone were to negotiate for a raise, they probably wouldn’t be a good fit, he says, arguing that paying above market rate as well as providing other perks should encourage people to stay for the long haul. If someone is simply chasing short-term benefits like money, there’s a culture mismatch.

Keeping It Accessible:

Most information, including salaries, equity information, and more is kept on an internal wiki. Other documents, like pitch decks to investors, are stored in Dropbox for any employee to see. “We tell people where it is but don’t require anyone to look,” he says. “This is in the background, we don’t throw it in people’s faces.”

Impact on Culture:

When the company first enacted salary transparency in January 2013, they had to “normalize” each employee’s salary. In every case but one, this resulted in a raise. The only subjective variable, experience level, was determined after meeting with each employee. No current employee is at the “junior” or “master” ranks. Buffer makes its revenue and other financials transparent to employees and routinely experiments with culture, something Gascoigne believes made this “just another step” and not a sudden (and jarring) change of direction.

Other Normally-Taboo Information Buffer Shares:

If someone is let go, the reasons are shared in detail with the team and are referenced to the company’s culture deck (below).

Fighting Jealousy or Animosity:

Gascoigne says he has a one-on-one meeting with every employee once a month. Team leaders have one-on-one meetings every two weeks. “If we ever see any friction, it will be brought up fairly rapidly,” he says. “It means we have a deliberate place for them to mention something to us. They don’t have to use any willpower or be afraid.”

Continuing To Incentivize Employees:

Buffer is willing to update the formula as it grows but hopes that its focus on work/life balance fosters employees that are in it for the long haul. “We believe in the Tony Schwartz way of thinking: it’s a myth that you get more done by having less balance,” Gascoigne says. And so far, he’s right. The company says it saw $130,000 in revenue in May and in January 2013 was charting a 300 percent year-over-year revenue growth.

“In Silicon Valley, there’s a culture of people jumping from one place to the next,” he says. “That’s why we focus on culture. Doing it this way means we can grow just as fast—if not faster—than doing it the ‘normal’ cutthroat way. We’re putting oil into the engine to make sure everything can work smoothly so we can just shoot ahead and that’s what we’re starting to see.”

How about you?

Would you work in a company where you salary is disclosed? Why or why not?

Sean Blanda

Sean is the Editor-in-Chief and Director of 99U. Find him on Twitter: @SeanBlanda.

  • Patrick

    Absolutely. Every employer is looking for the best in their employees and this gives employees the opportunity to bench mark themselves against each other. The know why each person is getting paid what they’re getting paid. Its genius. And i’m sure it would work.

  • rogernort1

    Not talking about salaries is a myth spread by bosses. There is no real disadvantage to employees knowing each others salaries. At worst they’ll find out that they’re being underpaid or didn’t negotiate hard enough on joining and they should address that. It makes no difference to the other employees.

    It does make a difference to the employers though. For obvious reasons. It’s more a problem when bosses aren’t paying their team fairly or not measuring their salary to results properly.

    • jenniebeme

      I agree the biggest disadvantage would be for the employer. Although I have been resented by my colleagues just by them assuming I make more money than they do. And it sucks when your peers get jealous and therefore treat you worse. It’s a petty thing, but just a thought.

  • http://twitter.com/katherine_raz Katherine Raz

    Love this idea except for this sentence, which, WTF? “If someone is simply chasing short-term benefits like money, there’s a culture mismatch.” Since when is a money a short-term benefit vs. what: a ping-pong table?

    • Walter Chen

      cash is a short-term benefit versus equity compensation, for instance.

    • http://joel.is/ Joel Gascoigne

      Hey Katherine. This is a great question. Firstly, I’m happy to let you know we have zero ping-pong tables at Buffer.

      I think salary is super important, in the sense that we certainly don’t want people to be worrying about their finances or struggling to get by as a result of working for us. That’s why we have aimed to come up with a formula that puts everyone on a salary that is better than the market average.

      What I was really aiming to get at with this, however, is that at Buffer we’re aiming to attract people who love the product and culture we’re building. We filter highly with a bias towards people who have spent time to understand our culture and are excited by it. Once people come on board, I feel a certain duty that they emerge from Buffer genuinely as a better person in a much improved situation as a result of our focus on self improvement within the culture. We specifically spend time to help each other in this regard.

      Let me know if you have any further questions, I think it’s super helpful to pick out some areas that might help others too:-)

      • http://tarheel.tumblr.com dovcohn

        Joel :

        1) Do you disclose equity grants as well? Are all grants equal based on these same criteria – job/experience?

        2) I find the $10K salary vs equity tradeoff in contradiction to your value of long term, culture fit over short term cash need. If someone is joining a startup, then they should understand the value of, and importance of equity as a motivation. If someone were to opt for cash, I would have serious doubts about their belief in the company or commitment.

  • http://twitter.com/JessiDarko Jessica Darko

    Seems kinda asinine to reward people for living in cities like San Francisco. Salary should be dependant on what you bring to the table, not where you choose to live. Presumably you don’t force people to relocate to SF, and that’s good, but don’t pay them less simply because they are smarter about where they spend their money (EG: Cost of living in SF is so high that living elsewhere lets you put a lot more to retirement… but you’re mitigating that wise choice by lowering their salary for making it.)

    You may think this is just additional help for people in SF and people who live elsewhere aren’t missing out– but if two candidates presented with the same set of skills, but lived in different locations, would you be more inclined to hire the one that costs less?

    Since the answer is likely “no”, then you’re paying him less for being smarter!

    • Sheryar Malik

      The factor is likely not based on the location by itself, but the cost of living associated with that place.

      Let’s turn it the other way around; if I was given the choice to earn 120.000 per year in SF, USA, or 120.000 in Sofia, Bulgaria, I would without a doubt chose for Sofia. In SF, 120K buys you an average lifestyle. With 120.000 in Sofia, you can do whatever you want, and fly anywhere once a month to further diversify your entertainment.

      Factoring in cost of living, a house in Antwerp, Belgium of 1 million, would be on the market in SF for 6 million. Same house, same luxury, same square footage. And the location is not “less”, it is just another market.

  • Eric Wesley

    I wonder how Buffer works out their one-on-ones in a meaningful way. It’s one thing to say that a one-on-one is a ‘risk-free space’, but in my previous experience, the only criticism that one can safely give is to clarify goals and expectations. Constructive criticism is largely unwelcome in many firms. Hopefully Buffer is an exception!

  • Ilya

    Above average market salary? Have you checked engineering salaries lately? 60k? You get twice that with a few years of experience, especially in SF. We can’t even hire an experienced engineer for less than 100k anywhere in the US.

    • mschneider718

      +1

  • David Grimes

    So I’m assuming that this really only work with a startup rolling in seed funding or some other type of upfront capital. It doesn’t make sense to me that a publicly traded company would be able to pay it’s employees “above average” market salaries without raising concerns from shareholders. What are your long term plans for balancing that deficit between the payroll and your overall profit as a company?

    Also, as you mentioned in the article, the whole reason that companies like to keep these things private is because pay rates change over time, and it causes people to be dissatisfied with their work to know other people in the same job are being payed more than them.

    For example: Bob gets hired for job X today at 80k (market standard) a year, he works with you for the next two years, at which point, Sue gets hired at 60k (the new market standard, as the job becomes more dilute with professionals) The only things you can do is bring sue in at 80k (20k above market average, shareholders would flip a brick), Decrease Bob’s salary, as to not cause dissatisfaction with Sue (Bob will leave your company), Or outright fire Bob, and hire someone at the new rate to replace him along with Sue.

    Doesn’t it seem like that would cause ridiculous amounts of turnover every time you bring on a new employee? You have to upset the entire team of Job x’s just to bring a new person in.

    So in your case, what is the benefit of transparency in salaries vs the old way of having that information private?

    • Centaur

      Missing the point completely. This is not about private, public or startup, but about the way in which we treat “salary”. What does the word average mean – according to Webster –
      a : a single value (as a mean, mode, or median) that summarizes or represents the general significance of a set of unequal values
      Which means you have the liberty to pay more than average and justify it as a true cost of ownership. Wouldn’t you pay a higher salary for experience, knowledge and skill. In other words you can attract the cream of talent as you are paying them top $s. You hire people for what they are worth and not what market averages are! This helps you to get long term loyalty and higher employee satisfaction.
      Probably one point which all need to understand is the “raise” in salary. While that can be strictly performance based, the yearly base should increase by the rate of inflation (i.e if inflation is 4%, then the base salary should increase by 4% to compensate for that increase and then add the performance criteria!) No one is then felt hard done by.
      Important to note – what about Non-performance or sub-par performance? That should be treated just as that and there should be open and transparent policy about “what happens if” you are one of them! (This avoids heartburns later!
      And you missed the point – if Salary is the only criteria that you work for a company, then I am not sure if you will be happy anywhere! and it might be better to let go of a person who is really talented but his sole focus is “money”. Any remember the old adage – No one irreplaceable, yes, it might slow you down a little but don’t let anybody fool you that they are in unique position of knowledge! (Except for the R &D guys in the labs – who anyway are motivated by all things other than money – mostly).
      Being transparent avoids all the unnecessary debate and the cloak and dagger stuff! A more productive and cohesive team!

  • seth cheeks

    “If” your hires are passionate people loving their craft and you truly have a strict 9-5 schedule and a 60min lunch break each day, then I can see this happening. Reason I see it happening in that situation is it gives creatives time to not be burnt out for your experimental projects, education and growing your skills in other areas. Through that you become so desired to work with that as the company grows and people get hirer salaries, your foundation of a great work/life balance is already set. Money is only a trade or part of the trade for your time. If you are working 80 hr weeks, your gonna want to get a serious six figures, it’s not going to make you happy but you will kinda justify the time spent working those hours. From there it’s how long will you go before total burn out.

  • http://JoaquinRoca.com/ Joaquin V. Roca

    I love what Buffer is doing. All the criticism you get for this is perfect. It means the policies you’ve put in place to manage your culture are working. Self-selection is a powerful tool and will help you win long term. Keep fighting the good fight, Joel!

  • Owen

    The big thing wrong with the formula is experience. I know the startup culture tends to be blind to anyone over 40 but in the real world in businesses with longevity there are two factors at play – one is that people expect their salary to rise in general over time and the second is that there are far more levels to experience than shown here – and in particular the master and expert levels need to have much bigger multipliers. Most skilled jobs have a range that is more like 2x between neophyte and true expert. In a company and industry that is only a few years old it is possible to pass anything from 5 to 7 years of experience off as expertise. but in many professions 5-7 years experience barely takes you out of the novice category. We’ve moved a long way beyond the apprentice, journeyman, master model but the 14-year timeline that represents still has a great deal of truth to it in many places.

    • John

      A “master” making only 30% more than a “junior” is ridiculous. I’ve seen people who are 10x or more as productive as others.

  • David Farbey

    I wonder if larger and more established companies could ever move towards this culture of internal transparency? Would it just be a matter of complexity, or do established organisations have an inherent bias towards internal confidentiality that would preclude such a move?

    • brittanyerin

      In my personal opinion, larger corporations have an internal bias against transparency and authenticity. Educated in the “old school” economy, they’re fearful that being open and honest with the people they help and serve will expose them for who they really are.

      Of course, complexity factors into that too. Many large companies just don’t have the time or the processes put in place to really focus on this sort of thing — but I believe that if they truly cared about the people that worked for them or interacted with them, they’d MAKE the time and the processes, no matter what.

      Love that Buffer is doing this.

  • jemmyw

    It seems like a way of preventing one on one negotiation. How do you keep hold of a great developer who loves the job but has a family to look after and has been offered a higher paying job elsewhere Using a formula doesn’t recognise that a good fit with a team might be worth more than experience nor that work is not the only pressure on a persons life.

    • jemmyw

      I’d genuinely like to know the answer to that. Would you just let them go? Is it worth the cost of staff turnover to keep salaries even?

      • jenniebeme

        According to Gascoigne, money is a “short-term” benefit and a developer who needs more doesn’t fit with Buffer’s culture.

        I definitely think about money in the long-term — I need it to be able to save for the long run!

  • https://www.facebook.com/TheJuliaClarkOrganization Julia Clark

    I believe in transparency! Where do I sign on for this company! I would love to be able to vote not only with my $ but with the way I earn my salary too!

  • grinblo

    What struck me in particular is the company culture manifesto and its focus on work-life balance. There are things in there that directly contradict much of the “being successful means getting no sleep” startup mentality. It’s good to see a company taking time to ponder what kind of impact it has on its employees’ lives. Like others in the comments thread, I wonder where the ceiling lies in terms of size. How big does a company have to get for all this to stop making sense?

  • Underpaid designer

    That awkward moment when my yearly salary is lower than the lowest starting base in that image and I’m a Lead Designer in my company😐

    • mx

      you need a raise, pronto:)

    • jenniebeme

      I applied for a “graphic designer” job in my home town. It required a bachelor’s degree, 5+ years experience and print plus web capabilities. Then they told me the yearly salary … $40,000!

      Yep, definitely lots of underpaid graphic designers out there!

      • Me

        My english is not so good but here is my history:

        At the start of the year, i decided to apply to a job wish ask for 5+ experience, print, web etc. the list was very long , i thought i will apply since i meet all requirements, and i thought it was going to be good pay, so i go there and have 3 interviews! same day with different people. and guess what, they wanted hired me for $400 at month, and they say they can maybe give me a raise after few moths, i ask people who work in there they say been there for more than 2 years and no raise! i hold a bachelor’s degree and im working on my Masters thesis. 8 years experience…. what a waste of time.

        it just make me laugh at some point i was going to ask are u talking about me coming and do ONE design at month?

  • Eddy

    There is a discussion in my company right now about publishing the salary of each employee. However, there are two groups, the one who want to publish it and the one who don’t want to. The first group is interested in negotiating salary with a peer group, the second one only wants to negotiate with the CEO. I think its more suitable to do that in a peer group because the know better about your personal performance and skills than the CEO. Some people are afraid of grudge, nobody can be forced to publish his or her salary. I would prefer that because there is nothing to hide about that.

  • brittanyerin

    What I think is particularly interesting is that many people my age — are already telling each other what kind of salary they make. Back in the day, that was unheard of!! My mom still even lectures me time and time again AGAINST it, but friends still insist upon opening up to me about what it is that they truly make — without me even asking!

    Not sure what it is. Maybe they feel as though I’m someone they can trust? Or maybe the stigma of disclosing salary has FINALLY worn off. We’ve entered a day and age where there are more important things to life than money, like purpose or creativity for instance — but where it still does, in fact, matter.

  • Bobby

    What happened to personal choice in this? If you want everyone to know how much you make and how much your co-workers make, go join a union. I prefer freedom to choose, not do I feel any need to explain any of my reasons.

  • Alex Salkever

    Call me crazy but I don’t see how this formula comes even close to paying market rates for people living in San Francisco. I don’t know of any skilled intermediate engineers in the Bay Area willing to work for an $88k base salary (assuming $60k base plus 1.1 multiplier + $22k in location pay). 1 Bedroom apartments in SF go for $2k and up. Taxes in California are close to 50% for young single people. So do the math on that – $40k goes to taxes, $24k goes to rent – that leaves you a whopping $24k for everything else. By my math, you would be barely making ends meet or living with lots of roomates (which might save you $1,000 per month). Even if the multiplier applies on top of the location benefit, it’s barely market rates. I’ve had to hire people here and $88k is about what you pay for mid-level marketing folks. I’d be really curious to hear Joel’s reply on how this is above market rates for SF – unless I am missing something.

    • Not Greedy

      dude $2k/month in discretionary spend is pretty good

      • Alex Salkever

        That’s not discretionary. Cell phone – $100. Cable/Internet – $30-50 (if shared). Groceries – $800 (SF prices). Utilities – $100 (in shared apartment). Transportation – $400 (if you drive or do a ZipCar) of if you take transit around town. Out of pocket medical – $50-100 on average. Clothes – $50. I’d say its more like $200 per month discretionary.

    • Brian

      It is a small startup so there isn’t enough money to pay a higher salary. That’s why they get equity and hope the company gets bought out by Twitter.
      I met Joel 3 years ago at a startup weekend event in Palo Alto and I liked his idea but I’m surprised he was able to form a company around a twitter app. Congrats on your success.

  • Jospeh Walter

    Thank you very much for posting this. The idea’s expressed in the Buffer Deck mirror my belief structure on a base level, and go beyond what I have considered. Very powerful.

    It goes beyond disclosing everyone pay. Which is awesome, but to build a company around transparency on all levels. And simple approach philosophies. I hope the founders of Buffer are spoken of in ten years like Mark of FB and Larry of Google..

  • Geoffn

    I suggested an open salary approach at my workplace 25 years ago and it went, democratically, to a vote. What was the result…? 16 no’s and 1 yes (me). And everyone thought I was crazy!

  • Swissreader

    To give you another example: The Alternative Bank Schweiz in Switzerland, with currently 85 employees has salary transparency since it was founded in 1990. Each salary is published on the intranet.

  • Baldrick

    A very interesting idea. Coincidentally, a colleague and I were discussing the concept a few weeks ago.

    To set the scene, we work for a multinational who pays different base salaries according to the different functions. On top of that, they pay a bonus to all staff, based on the number of years that they have worked for the company. So, although we all have the same base salary, some of my peers get paid more than I do because they have worked for the same employer for longer. The real problem arises because there is no flexibility in the system. If a person with 10 years of seniority does just enough work to remain employed, they will get paid more than a person with 8 years of seniority who is doing more work/has more responsibility/does more strategic work, and we do not have a system to reward the latter of the two.

    To be realistic, it is the way of the world; the younger/more junior staff are more eager and willing to take on more challenges and projects. On the other hand, it leads to unequal distributions of work: within the office, we all know who can deliver a project on time and who will do the minimum required.

    My colleague and I wondered whether publishing salary particulars, or even just seniority levels within our office, would influence our expectations of each other and consequently lead to a fairer distribution of work.

  • Mike Miller

    This was pioneered years ago by Ricardo Semler and employees at Semco in Brazil. The key difference is that at Semco, salaries are not determined by any pre-set formula, but are set by the employees themselves.

    The fact that all employee salaries and business unit financial figures are public information (and employees are expected to understand this financial information) ensures that salaries are set in line with the revenues of their particular business unit.

    This is not a recipe for abuse, as some might believe. Company profit sharing ensures that employees have an incentive to keep the finances under control and not abuse their financial powers. Transparency also ensures that each employee checks the behaviour of other employees when it comes to financial expenditures.

    It’s the next step in workplace democratization.

  • ashmoran

    Heh, I’d bookmarked this to read properly and comment that Ricardo Semler wrote about a similar tail, although I see now that Mike has already mentioned that. Another valuable thing Semler did was to offer accountancy training to every employee so they understood the data they were seeing.

    I’ll be curious to see how the Buffer approach compares to Semco’s, as the market rate for the various roles varies over time.

    If you happen to read this, Joel, you might enjoy picking up a copy of Semler’s Maverick!, salary secrecy is just one of the many corporate traditions he unceremoniously expelled from his company.

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