As an employer, I’ve always dreaded the whole issue of salaries. No matter how close, aligned, passionate, and engaged someone is, this figure of how much you get paid brings up all sorts of issues and triggers around value, entitlement and inequity.
I wanted us to be good payers at Good Empire, right from the beginning. I just wanted to remove that obstacle from someone’s decision to join us. I wanted someone to feel good about what they were getting paid, and want to give back, and care more.
I’ve always believed that what someone actually needs to live, and live reasonably comfortably, is as important a factor as market value, or what they feel they’re worth, and then of course there’s what the company can afford to consider.
We made the decision in early 2020 to be transparent about finances at Good Empire, which included budgets and salaries.
Which sounds good and well, but can be (and has been) even more triggering.
We also made the decision to adopt a 4-day work week. Which pretty much means our work week at Good Empire is more like 32 hours, not 38 or 40. But we still pay full time salaries.
I did a fair bit of research on this one, and I truly believe that A) a more balanced equation of days spent “working” for a company, for an income, vs days spent not doing that, days spent on whatever else “living” means to you, could have a profound effect on society, connection, mental health, self-awareness, happiness, family, everything.
More on this in another blog.
I also wanted to remove the possibility of someone (historically women) undervaluing themselves, or not having the confidence to negotiate or ask for a payrise, as well as the issue of someone over-valuing themselves and pushing harder than others for a higher salary.
I wanted to remove unconscious (or conscious!) bias.
Anyway, after the last conversation with one of the team about salary, I felt that what we needed was a framework. Something clear and transparent that showed what someone should be earning, and how they might progress, and took out the need for any negotiation. Or at least minimised it.
We started doing some research, and found so many good models, generously shared openly and publicly, by companies like Medium, and Buffer.
I was especially drawn to the Buffer model, for its simplicity. I didn’t want to inherit a complex performance review matrix that drove an overly-aggressive meritocracy.
I wanted everyone just to be able to relax and feel comfortable with what they were being paid, so we could all get on with bring our vision to life and having the impact we want to have.
Whilst still having a clear path for being able to earn more money, if that’s what someone wanted, as they grew, or levelled up.
Here’s the model we’ve implemented, and I’d like to especially thank CEO Joel and the Buffer team for publishing their model, and in fact the salaries of their entire team, as well as their humble insights and the changes they’ve made. It’s brilliant work, and has strongly guided our own model.
Good Empire Salary Calculator
- Role Base x
- Cost of Living factor x
- Leadership x
- + Loyalty/Life Extras
Yup. Okay, what does that all mean?
1. Role Base
We start with a base salary that is a measure of the market rate of the “role” (we use a few sources for this, including Hays Guide, Pay Scale, Seek and Linkedin), and the skill/training required to learn or qualify.
|Role Base Tier||Role type||Examples||Base Salary (A$)|
|Tier 1||General||Customer service||60|
|Tier 3||Skilled||Digital marketing||90|
|Tier 4||Highly Skilled||Engineer||120|
It’s worth noting that our approach to “roles” is not based on a title, or even a single role. Roles are more like hats we each wear. They sometimes change. Someone might take on several roles (being an early-stage startup, this is pretty much necessary). At the time of writing this, my roles include vision, brand, product, strategy, culture, funding, finance, and impact.
So we look at the highest tier role someone takes on.
Also, we started Good Empire in Australia, and at the time of creating our model, the whole team was based somewhere in Australia, so we use, and benchmark in, A$.
2. Cost of Living
This is an adjustment based on the cost of living of someone’s location (where they live and work from).
This is to create a more equal “real life take home salary” situation. A salary is more about what someone earns, than what it costs the company, in our belief. And it’s more relevant for someone what they can actually do with that money, than it is a number.
|Cost of Living||Examples||COL Adjustment|
|High||San Francisco, New York, London||x 1.2|
|Above Average||Sydney, Melbourne, Singapore||x 1.05|
|Average||Adelaide, Madrid||x 1.0|
|Low||Bangalore, Wroclaw, Cape Town||x 0.9|
We’ve weighted the scale to favour those in low cost of living places, because we’d like to positively contribute to the “average income” in those lower income places.
This feels like a complex issue, but we’re erring on the side of lifting those on less. At the time of writing this, we don’t have anyone on the team working from a low cost of living location, so we’ll relook at this when we do.
I’m in Adelaide, and Good Empire started here, and it’s an “average” cost of living place in the world, so we’ve made that the “neutral” base (x 1.0 adjustment), which says that our base rates are also therefore benchmarked for Adelaide and similar locations.
Borrowing from Buffer’s Good Life Curve, we also reference Numbeo as a source to figure out the comparative COL for different cities.
We keep this one simple. Do you lead a team? How big is the team? How many people do you lead?
No one is “just” a leader in Good Empire. Everyone in leadership also has at least one role to do, so in some respects, our approach to leadership is like another role. For some people, it’s a very big role.
We’re not talking about leadership qualities. We’re talking “do you lead/support a team?”
|Leadership Level||Description||Leadership Factor|
|Self Leader||In a team||x 1|
|Small Team||Lead a team of 1-5 people, team lead||x 1.1|
|Medium Team||Lead a team of 6-20 people, dept lead||x 1.2|
|Large Team||Lead a team of 20+ people, exec lead||x 1.3|
Note that this isn’t exact maths, in terms of number of people in your team as a lead, it’s more of a guide.
This adjustment not only reflects the added skills, responsibility and value of those who also lead a team, but also reflects the scale of the organisation. As we grow in scale, leaders will be leading bigger teams, and we’ll hopefully be able to afford higher salaries for the greater complexity and responsibility involved in leading.
Yes, we expect everyone to show leadership qualities, and all of that, but we’re not factoring that in here. (It’s in our growth rubric however)
4. Experience + Growth
This is an adjustment that covers both the experience someone brings when they start a role, and also their growth in that role. As in, it’s also the factor we use for progression in a role, as you’ll see in our Growth Rubric.
|Experience level||Description||Example||Exp Factor|
|Level 1||New||New in that type of role||x 0.9|
|Level 2||Intermediate||Knowledgeable, 1-3 years exp||x 1.0|
|Level 3||Advanced||Bit of a gun, 4-6 years exp||x 1.1|
|Level 4||Expert||Respected among peers, 7-10 years exp||x 1.2|
|Level 5||Master||Global industry leader, 10+ years exp||x 1.3|
As with leadership, the maths of years of experience isn’t exact, it’s really more of a guide.
When we say “new in that type of role”, we mean new altogether, as in, they haven’t done it before, not that they’re just new in that role in Good Empire.
5. Loyalty + Life Extras
There are a few other important things we wanted to build into someone’s salary, including loyalty, and dependants.
Rather than creating more multipliers, we’ve opted for these to be fixed add-ons.
Loyalty Pay Rise: $5K pay rise on anniversary each year
This isn’t a bonus, as such, but a standardised pay rise, for no other reason than your loyalty, your time with the company.
It’s not reviewed, not linked to performance or growth. It’s just about time.
Reason I like this, in particular, is because sometimes someone doesn’t want to progress, or change roles, or upskill – they like their role, and sure, they’re growing with the company, but their role doesn’t necessarily change, and they’re comfortable with that.
And sometimes, that’s exactly what we need.
And this, hopefully, goes some way to creating a way that someone can steadily increase their salary without having to change their role or take on leadership.
And if they do level up in experience, or change roles, or take on leadership, well, it’s an added bonus to reflect simply, their time with the company.
This payrise obviously stays with someone no matter what role they might change to.
Dependents Support: $2.5K per dependent per year
Another well-researched factor in Buffer’s salary model, which I really like, and have adopted for Good Empire.
It’s effectively an annual add-on, based on how many dependents someone has to support. This can be children, or a live-in grandparent, or a partner unable to work. We’ll specify the definition of a dependent.
This is not to encourage someone to have kids, or punish someone who doesn’t. It’s a reflection that if someone DOES have kids (or another dependant), then, like the location they live and work in, they have to also support those dependants on their salary, so it doesn’t go as far.
$2.5K doesn’t nearly cover the cost of a child, we’re just trying to add a little something to help, so that someone feels a little freer to make the decision to have kids or support a dependant, if that’s what they want.
If someone doesn’t, then they’re not losing anything.
Long Service Bonus: Every 3 years, here’s $5K, go take a f**king holiday.
That’s pretty much what it says on the box. We may make it conditional that someone takes a month off work. We’ll see when the first of us (me) reaches 3 years!
So that’s it. We’ve also made some (we think) good decisions around paid parental leave and a few other things, we’ll share those as well.
No doubt we’ve made some mistakes with this model, and we’ll make changes as we “work it in”.
We’ve tested it against the current team’s roles and salaries and experience, and it works out well so far.
Some of us were a bit underpaid according to the new model (we increased their salary), one of us a bit overpaid (we didn’t drop their salary), and some of us (well, me), the company can’t quite afford to pay the full amount according to the model, and that’s okay, we’ll work our way there slowly.
We’ll keep this post updated if anything changes, and we’ll also try to share any issues or problems that arise from the new model.
Check out Buffer’s salary model here: https://buffer.com/salaries