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Open Source The Almighty Buck

Buffer Sees Clear Benefits To Transparent Employee Salary Policy 137

An anonymous reader writes: At social media startup Buffer, a single leadership decision eliminated salary negotiation for new employees, preempted gender-based salary discrimination, and prompted a flood of job applications. The decision? Make all employee salaries transparent. "We set down transparency as a core value for the company," CEO Joel Gascoigne said in 2014. "And then, once we'd done that, we went through everything. And salaries was one of those key things that we found that [made us] question ourselves: 'Why are we not transparent about this?'" Years later, the policy is still in place (go ahead and calculate your salary as a would-be Buffer employee) — and it presents a fascinating case study for anyone interested in the ways open organizations approach a rather prickly subject: transparency.
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Buffer Sees Clear Benefits To Transparent Employee Salary Policy

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  • by Kjella ( 173770 ) on Thursday March 03, 2016 @01:24PM (#51629975) Homepage

    Something tells me I'd either be very happy with my starting salary, or very unhappy with my "master" salary...

    • by OzPeter ( 195038 )

      Something tells me I'd either be very happy with my starting salary, or very unhappy with my "master" salary...

      But with the hipster street cred of being a "Happiness Hero", why would you ever care about your salary?

    • Something tells me I'd either be very happy with my starting salary, or very unhappy with my "master" salary...

      Indeed. For entry level, the salary levels look fantastic. But then there is little increase. So as time goes by, their most productive employees will leave and go to where they are paid what they are worth. If salary transparency was a panacea, then the government, where salary levels are public, would be the most efficient organization.

      • by Anonymous Coward

        This is assuming that the out of the gate "master" salary is the same as the salary cap for that position.

      • by TheSunborn ( 68004 ) <.tiller. .at. .daimi.au.dk.> on Thursday March 03, 2016 @02:09PM (#51630363)

        Only if you don't read the article. (Yes I know this is slashdot, but still).
        Hint: There is an aditional 5% increase each year you have been there.

        • by swilver ( 617741 )

          Doesn't matter. A master at his/her craft is worth far far more than 1.3x that of a beginner.

          • by ADRA ( 37398 )

            Certainly -worth- yes, but never have I worked for companies where employees of equal status make N-times the salary of another. Its basically a tax on the worthy to support those that are less capable.

            Ultimately, there's essentially no company that can just continually hire genius people and pay them their amazing value vs. the less capable competing job seekers. If those less capable job seekers seek N dollars and that's what you pay more gifted employees, you either raise your wages across the board (not

        • > Hint: There is an aditional 5% increase each year you have been there.

          So they adjust for inflation. Which everybody should be doing. Still isn't a raise.

      • Assuming the cap is the same as the starting salary, it's still only a problem if they have need of high-end developers. If they can instead do well with relatively low-end skillsets (such that "master" is simply the highest skillset they need, and is being paid what they're worth), then this could be an excellent policy to acquire and retain their desired workforce.

        And nobody is claiming transparency is a magic bullet that will solve all your problems, only that it's a potentially valuable tool. As for

    • Something tells me I'm unhappy with my salary. But then the pay is shit here.
  • I really like the idea. The San Fran salaries for CS are maybe 15-20% low, though.
    • No negotiation on salary basically means they are bottom feeders.

      They are looking for average at best, seat warmers at worst.

      • Not necessarily. Salary negotiation goes with trying to offer a low bid, if the person accepts it then they got one for cheap.
        The if the employee who may be a good fit, gets the low bid, may just decline the job, where they may be willing to go higher.

      • Re:For SF... (Score:5, Interesting)

        by ShanghaiBill ( 739463 ) on Thursday March 03, 2016 @01:51PM (#51630223)

        No negotiation on salary basically means they are bottom feeders.

        Did you look at their salary levels? In the SF area, they are offering $122k to entry level programmers. That is not "bottom feeding". It is ridiculously high. My company (San Jose) offers fresh "BS in CS" grads between $80-100k, and we have no problem getting people from SJSU or even Berkeley. Their problem is on the high end. As that employee goes from beginner to intermediate to advanced, their salary only goes up by $20k. That is a pittance. In the SF Bay Area, there is no way you are going to hang on to good experienced people for $145k.

        • by hattig ( 47930 )

          My logic is that as they are a small company, they are not hiring entry level programmers as they don't have the in-house resource to train and mentor them effectively. So what you are seeing is a mid-range, senior, architect type range. The developer 'buckets' have no concept of senior specialisations and cross-team architectural skills, and thus they are not offering enough, IMO. It's also seems to be self-selected...

          A slight win of the gimmick currently is that people may be aware of them and they can av

          • 401K matching and equity is what I'd call long term, 5% cost of living adjustment every year is huge, even in the relatively short term. I mean if you are looking for a job and not planning to keep it for a year or more then you're really looking for contract or consulting work.

        • Entry level programmers are paid 80k? Holy crap. So this employee is really costing the company 160k because there's going to be a number of resources pulled away from their main project to help them. How the hell do they stay competitive?

          • Entry level programmers are paid 80k?

            San Jose has the highest cost of living in the nation (higher than Manhattan). A 1500 sq ft home a quarter mile from Gangland USA goes for $750k before it's bid up by people offering cash + $50k over asking.

        • by dgatwood ( 11270 )

          In the SF area, they are offering $122k to entry level programmers. That is not "bottom feeding". It is ridiculously high. My company (San Jose) offers fresh "BS in CS" grads between $80-100k, and we have no problem getting people from SJSU or even Berkeley.

          The ones offering $122k to entry-level programmers are probably in SF. That extra $20k either covers the cost of driving your car for an hour and a half from someplace with only moderately insane housing prices or covers the difference in the cost of a

      • They should just go grab resources from WiPro or any of the other H1-B farms out there.

      • by msauve ( 701917 )
        It works for the federal government (GSA grades), they don't have any trouble attracting good candidat... oh, never mind.
      • Not necessarily. I could run a business and start salaries at $200,000 and reject any candidates I didn't think were worth that much. I'd probably be inundated with applications from delusional idiots that think they're worth that much, but I could get a set of highly skilled and exceptional employees if I'm willing to pay them what they're worth.

        It really depends on how their entry rate compares to the rest of the market. If the base salary is in the upper range of what a starting developer can expect t
    • by Anonymous Coward

      Funny you should mention that. See, from what I've seen, most techies in the Bay area are underpaid.

      Families need $200,000 to live comfortably in S.F. [sfchronicle.com].

      When I see averages of $135K for developers, I just think a lot of techies don't have a clue. And it explains why the companies out there prefer 20 somethings: they're too stupid to know better.

      Sure you can live out there cheaper - if you want to rent a basement room in some old lady's house or commute an hour or so one way.

      I'd love to move back home (Berk

      • Simple solution: Live in Oakland, and take BART to work.
        Another solution: If you make $100k, live with a partner that also makes $100k.

      • by dgatwood ( 11270 )

        Paywalled article. Given that I can't read the article, I can only assume it is based on lots of incorrect assumptions.

        An average two-bedroom apartment in SF costs ~$4,000/mo., or $48k/year. Food for a family of four costs under $1,000 per month, so we're up to $60k. Renter's insurance will cost you half a grand, and car insurance will probably add another grand for two cars. If you use public transit frequently instead of driving, that will probably balance out. Either way, you're in the ballpark of

    • What about NYC? About 120k where renting an apartment is minimum $2000/month...

      And for Paris it is way too low, intermediate for $80k wtf? an apartment there is also at least $2000/month, it means 50% of your net salary.
      • by ADRA ( 37398 )

        https://newyork.craigslist.org... [craigslist.org]

        Certainly expensive, but with > 2500 listings under 2000 from a back-of-napkin search, I think you exaggerate a little.

        Plus 2000/mo is 12 * 2000 == $24,000 or 1/5 your gross income. That's actually quite reasonable if that's the number being quoted considering the tertiary benefits of living in a large lively international city.

        If you want to make more money and save it, there are countless cities where you can make more proportional (and probably real) dollars in less 'h

  • The article says "Years later" but from looking at the site, most of the employees have been there less than a year and not many have been there for more than two. I suppose describing the elapsed time as years is strictly accurate but it's a bit misleading.

  • Why would transparency effect salary negotiation? What you are paying others makes no difference to me. I am negotiating MY position, not someone elses. No executive doesn't negotiate their salary, why would you? Stupid.
    • Uh, I meant "affect" not "effect". Maybe I should stop going on the Internet so much.
      • We would all be happy with this decision.

        • What would you do without my keen insight into topical issues? You would be left with StartsWithaBang spam and people who post about HOST files.
          • What would you do without my keen insight into topical issues? You would be left with StartsWithaBang spam and people who post about HOST files.

            I'll settle for the Internet that existed when we created it and it was just for military and research universities.

            Ah for the days before USE*NET spam ...

            • I remember the first time I saw spam on USENET. I actually was confused and emailed the guy asking if he meant to post it. Hahah. Then I was wondering what kind of person would send such things to the group and what the point of it was.
      • Hey, realizing you made a mistake is something 95% of the internet population wouldn't notice, care, or apologize for. You're ok in my book! Now if we could somehow ban people who use apostrophes to make things plural...

      • Depends on what you intended.
    • It gives you more information. If you see other employees making a certain amount and you know you are more productive or can add more value than they do, you have a much more compelling argument for getting a raise. I suspect that for most people, it's easier to argue over relative worth as it's pretty easy to make the case that you are better than employees B and C, but they make more money rather than to discuss value in a vacuum. It's also an easier argument for a boss to look at and agree with as well.
    • by mark-t ( 151149 )
      How do you know how much you are worth in the first place if you don't know what employers are willing to pay? Either your expectations are unrealistically high, in which case you'll be passed over, or your expectations are too low, and your employer is getting you for less money than he may have otherwise been willing to pay for your skills.
      • Thats a weird question. I don't base my salary requirements based on what an employer is willing to pay. I know how much money I need to make in order to live the lifestyle I want to live and I know in general how much money a company can generate from my position. It isn't an unreasonable amount. Do you think executives care about how much a company is willing to pay?
        • by mark-t ( 151149 )

          It certainly never hurts going into a salary negotiation having clear knowledge of what the employer is willing to pay. It's less about earning what is important to you and more about simply knowing that you aren't going to try and overvalue yourself in a salary negotiation or your employer is undervaluing you.

          Of course, if all you care about is money, and you don't care what people think of you or even necessarily what you think of yourself, then hey.... I suppose your system will work fine.

  • Buffer Sees Clear Benefits To Transparent Employee Salary Policy

    We now have intelligent buffers handling HR stuff? Cool.

    • Buffer Sees Clear Benefits To Transparent Employee Salary Policy

      We now have intelligent buffers handling HR stuff? Cool.

      The summary doesn't make it very clear, but they're talking about Emacs buffers, using hr-mode 6.2.9 (though XEmacs users are stuck on 5.9.x, because 6.0 introduced a reliance on an obscure new feature of Tramp which doesn't work on XEmacs yet). Supposedly 6.3 will bring integration with org-mode and ceo-mode, allowing essentially all business operations to be automated. That's been promised for years now, though, so I'm not holding my breath.

  • I think it is a good idea in principle. You should be able to see what you will earn as you progress in your career development. https://open.buffer.com/transp... [buffer.com]

    However ... the base salary is very high, and the 'master' salary is only 30% higher. That's not a very inspiring career progression!

    So either they don't hire graduates and juniors, or this is the company to get into if you are one of these!

    In my experience, 'master' developers develop code that is far better (through experience) than a graduate or

  • By having publicly documented wages, employers at the low-mid tier can now set your wages by mutual agreement. You cannot go find a better job (salary wise), unless you can get a line on one of the upper tier companies who will definitely keep their salaries secret. Similarly getting employees from one of those upper tier companies might be nearly impossible, since you can't offer him anything competitive.

    I think this hurts everyone to the pyyhric benefit of women and minorities.

    • Basically, yes. It takes power out of the hands of employees by allowing employers to dictate salaries in an environment which appears more fair.

      Negotiations are complex. One tool in negotiation is a standard of fairness.

      I argue for the elimination of minimum wage when implementing a Citizen's Dividend for several reasons. On one hand, the Dividend accomplishes an establishment of a minimum standard of living: you don't need a minimum wage. Some of the secondary economic effects lower the cost of g

      • Very well said. One thing that set of alarm bells in my head was when people were talking about a $15/hr minimum wage. Now that's a reality in some places. We also see the phenomenon of farmers paying migrants (the Mexican kind, not the Muslim kind) under the table because those jobs aren't even worth $8/hr.

        Minimum wage is a band aid measure, a rather crude one at that, to create a society where everybody is doing $something 39.5 hours per week (now 29.5, thanks Obama) and everybody who can get a job doi

        • Minimum wage is a band aid measure, a rather crude one at that, to create a society where everybody is doing $something 39.5 hours per week

          Minimum wage and public aid were a great system for the 1900s. I don't call out minimum wage and public aid as bad because they're outdated; I call them out as bad because we have new factors. The new factor approaching us looks a lot like the Industrial Revolution, and I know how to navigate that safely. I also know my solutions would have been inappropriate until very recently [wordpress.com].

          As we know, unions never work in the real world.

          Trade unions were an excellent device in a world where labor laws were weak and the economy was too volatile and too poor to

    • On the other hand it allows other companies to poach top talent because they know exactly what a talented individual is making and can make a better offer. It does require some other company to be proactive in seeking out talent, but a good company should be looking for better employees. Having more information is always better as it allows for more intelligent and informed decision making, but when the information is asymmetrical it naturally disadvantages some players, which is why companies generally don
  • Steve Jobs' tried this when he founded NeXT computer. Employees had full access to the payrolls. There were also only two starting salaries; $75,000 if you started before 1986, and $50,000 if you started afterwards. I'm not sure how this worked out for them considering the flux of that company.

    https://en.wikipedia.org/wiki/... [wikipedia.org]

  • Does the calculator also take into account living expenses and commute times? That is a part of the total compensation picture as much as the salary.
    • Buffer is a totally remote company so workers work from all over the globe, so commute times aren't part of it. But it does take into account where you live. If you choose to live in San Fran, you'll make more than if you choose to live in Iowa. From that standpoint, it kind of sucks that your coworker in LA gets paid more than you in Iowa, simply because he chooses to live in a place with higher average rent (even if he doesn't pay it), even if you both produce the same work. They also encourage their emp
      • So people who live in more expensive places are somehow more valuable to the company? That's interesting. It seems like this is at the other far end of the scale, where it doesn't matter what you do for a company or how good you are, you will make the same regardless. Also it sounds like people who are settled with families need not apply.
        • While I get that cost of living needs to be included in salaries and is (the same position in SF pays more than in Iowa), it can't be fun for someone doing the same job as another person to know what their coworker gets $20,000 more a year because they live in an area with nicer houses and higher rent. They do have some employees with kids and families, but it does seem the majority don't and travel pretty freely.
  • by Archfeld ( 6757 ) <treboreel@live.com> on Thursday March 03, 2016 @02:02PM (#51630319) Journal

    I used to work for a company that made bonuses general knowledge within a department. They held a staff meeting and merit bonuses were given and the reasons why were discussed. They also maintained a department ranking and that was posted as well. It didn't really bother me, but I was almost always in the top 3 amongst 25 to 30 sys admins. What wasn't broadcast were the perks and $$$ given by the end-user groups we supported, and again I supported stock traders and private banking groups who had cash to throw about, so I am convinced I was getting significantly more than almost all of my colleagues. I miss the money these days but not the stress and corporate B$, not to mention having time off. 24 hour on-call gets old pretty fast.

  • Since they can get equivalent people in much cheaper locations and pay them less?
    • And the people have less attitude..
    • by uncqual ( 836337 )

      Can they get equivalent people as easily elsewhere? I don't know the answer to that in this case, but I've been a hiring manager for engineering over the years both in the Bay Area and other areas and the quantity of high quality applicants was, overall, significantly higher in the Bay Area than any other area I was in.

    • by ameoba ( 173803 )

      Everyone else has spent time & money drawing talent out to SF. It's the highest concentration of skilled developers you're going to find anywhere. You can't just ignore that huge talent pool.

  • So people who live in more expensive places are somehow more valuable to the company? That's interesting.
    • by Paco103 ( 758133 )

      People that have dependents are also apparently more valuable to the company. I never understood that. All my coworkers with spouses and kids get a bump (in terms of insurance premiums paid for and in some cases family leave, but I don't get any "equivalent value" by not having those things. I know people will point out that they don't really "get extra" because their wives shop, husbands buy toys, kids are expensive, etc, but as an employee working for my company how does that make them worth more?

  • too bad all of their positions has stupid non market names so correlating salary among the industry norms is near impossible.

  • Diversity Guardian is the kind of hire you make when you're spending other people's money and of course being a start-up that's precisely what they're doing. Wankers.
  • Any recruiter in the Bay Area will tell you the compensation is based on two areas: the base and the equity package. They have low-risk/high-risk in this calculator, but they say nothing about how much equity goes with the higher. My bet is that the rock stars get a lot more stock than the average joes.

  • The problem with having all salaries transparent, is that it takes away the negotiating ability of workers. Workers now won't be able to negotiate their salaries as it's all transparent and will pretty much be the same as everyone in their department. If you look at countries like Denmark (where salaries and tax returns are all public), this is exactly what has happened: This will probably save the company millions in the long-run.

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