Compensation is an important topic at any company. At a company like Buffer, where our salaries have been transparent since 2013, compensation is a transparent internal discussion where the whole Buffer team can share thoughts and feedback. A plenty has changed in our salary formula over the past few years. We took a very simple formula and constructed it more accurate to the labor market, and most recently, we’ve been focused on improving our formula to make it a true-life benchmark for a remote-first world. In this post, we’ll share an overview of our compensation logic and a simple explanation of our salary formula. Transparency is an incredibly powerful tool, and we hope that sharing our approach to compensation can help others who are currently navigating this room.
How we think about compensation
Our approach to compensation has evolved over the years, and our wage formulae have taken various shapes, but a few fundamental pillars of our overall compensation philosophy haven’t changed. [?] Ultimately, we view compensation and benefits as the situate of tools that empower our teammates to bring the most appropriate to Buffer so that we can share that same generosity in service of our patrons. We crave every single customer interaction to be a delightful suffer. By guaranteeing our squad members are fulfilled and involved with their work, we can build the solutions and tools that is compatible with our customers to achieve success and fulfillment in their personal and job lifetimes. These key principles guide all the decisions we make about our team’s compensation and benefits:
Transparency: We openly share our approach and all salaries to create trust, hold ourselves accountable, and serve as a resource for the industry.
Simplicity: We aim to maintain an easy-to-understand formula that allows anyone to easily see how we arrive at any individual salary.
Fairness: We ensure that those with the same role and responsibilities who are at the same experience level are paid equitably.
Generosity: We pay above marketplace to attract the team we need, thrive as individuals, and evaded exceptions and inequity resulting from negotiation.
Our salary formula
Every base salary at Buffer is derived from our salary formula. The formulaic approaching decreases biased decisions about compensation. This has been a valuable tool to ensure our awareness of any gender wage gap since our wage formula is rooted in objective market factors applied systematically across the team. Read our latest salary analysis for more insights into equal pay at Buffer.Our formula is your persona x cost of living= your salary.How we ascertain role compensation We benchmark each role to data from Radford, a platform that meets compensation and benefits data regarding companies is involved in world surveys twice per year. The persona benchmark is based on the software industry and the 50 th percentile of San Francisco market data. We selected San Francisco as a part of our principle of generosity as it is a competitive labour market. How we apply cost of living After we’ve benchmarked for point and suffer grade, we multiply by a cost of living factor that objectively considers one of four geographical areas in comparison to San Francisco’s cost of living and property price index.
High cost of living 100% of the San Francisco market= multiply by 1. Examples: San Francisco, CA& New York, NY
Intermediate cost of living 90% of the San Francisco market, multiply by 0.90 Examples: Singapore& Sydney, Australia
Average cost of living 85% of the San Francisco market, multiply by 0.85 Examples: Boulder, CO& Madrid, Spain
Low cost of living 75% of the San Francisco market, multiple by 0.75 Examples: Bangalore, India& Wroclaw, Poland
These cost of living multipliers take into account being a world team while closing the gap found in traditional compensation approaches.To see this formula in action, check out our salaries page with the whole Buffer team’s transparent salaries.
The future of our salary formula
For the past few years, we’ve had the goal to further simplify our formula and do away with the cost of living consideration as an element of the formula. In practice, this would mean we’d eliminate the low-spirited, average, and intermediate bands to pay everyone at the same level of San Francisco market wages. The result of this alteration would be a $1.2 Million increase in operating expense based on the team we have today( March 2021 ). While this change remains a consideration, we’ve deliberately specified a objective to do this incrementally rather than all at once. Investing in our team is important, though we must weigh trade-offs, and in this season for Buffer, we believe that expanding our crew size is more in line with serving our customer’s needs. Meanwhile, we’re also reading sell transformations that are bound to impact world compensation. With more corporations embracing remote study, access to talent is no longer dependent on the local ability pool. You don’t need to live in Silicon Valley or New York City to work for corporations headquartered in those areas. You likewise don’t need to headquarter in those cities to access top talent! While we’ve never searched simply at local marketplace to benchmark our salaries, we recognize that cost of living will likely become more and more irrelevant as part of the movement towards substantiating a global personnel. What do you think of our approach to compensation? What are some ways you’d like to see salary become more transparent within or outside of your organization? Join the discussion with the Buffer community on Twitter here.
Want to work on a squad that has transparent wages? Check out our current job openings here.
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