Buffer’s salary policy takes transparency to another level

This arti­cle is part of our Going Against the Grain series, which tells the sto­ries of com­pa­nies bold enough to break busi­ness norms and try out new ideas. To explore the rest of the series, head here.

For some experts, salary trans­paren­cy is the gold stan­dard in equi­table work­ing. 

With some major UK employ­ers post­ing gen­der pay gaps in excess of 40%, could trans­par­ent pay poli­cies help deliv­er fair­er pay?

Sev­er­al munic­i­pal and nation­al admin­is­tra­tions are plan­ning to pilot or run pay trans­paren­cy schemes to close cor­po­rate gen­der pay gaps. The UK announced a pilot pro­gramme that will see par­tic­i­pat­ing busi­ness­es pub­lish salaries on all job adverts. Across the Atlantic, com­pa­nies in New York will soon be required to pub­lish the min­i­mum and max­i­mum pos­si­ble salaries on all future job list­ings as part of a new city­wide law.

Social media man­age­ment plat­form Buffer is a pio­neer of the con­cept. Its pay trans­paren­cy rules go one step fur­ther, pub­lish­ing employ­ee salaries online, includ­ing the CEO’s earn­ings. Peo­ple can opt out, for exam­ple for per­son­al safe­ty con­cerns.

Jen­ny Ter­ry is direc­tor of busi­ness oper­a­tions at the San Fran­cis­co-head­quar­tered com­pa­ny. Her $165,759 (about £121,000) annu­al salary is pub­lished online for all to see. The ini­tial deci­sion in 2013 was to make pay trans­par­ent inter­nal­ly, she says, to bet­ter align the com­pa­ny with its val­ues and “so the rest of the team would be able to see what oth­er peo­ple made”. Find­ing a pos­i­tive response to the move, Buffer decid­ed to go one step fur­ther and make salary details pub­lic.

“The rea­sons for mak­ing it pub­lic were twofold,” Ter­ry says. “The first was to con­tin­ue to be as trans­par­ent as pos­si­ble in every­thing we do as a busi­ness. And sec­ond­ly, as an ear­ly-stage com­pa­ny, the founders were look­ing for ways to struc­ture pay to account for busi­ness growth.”

The pol­i­cy was fur­ther devel­oped to include a salary cal­cu­la­tor and career frame­works, which aim to help employ­ees see how their earn­ings could poten­tial­ly grow as their career pro­gress­es. 

“You will know the set pay for your role and area, and you will know the skills and career lev­el expect­ed of you in order to progress to the next pay brack­et,” Ter­ry says. “This gives our peo­ple the tools they need to have con­trol over their own des­tiny.”

Transparent benefits

One imme­di­ate ben­e­fit was that the num­ber of peo­ple apply­ing for open posi­tions sky­rock­et­ed, accord­ing to Ter­ry. “Can­di­dates were very encour­aged to see that lev­el of trans­paren­cy at the busi­ness and it helped for peo­ple to know what to expect, in regards to pay, before apply­ing to the role,” she says.

Oth­er busi­ness ben­e­fits include improved lev­els of trust among teams, remov­ing the need to nego­ti­ate pay ris­es and help­ing to elim­i­nate pay gaps between cer­tain groups. 

Because pay at Buffer is trans­par­ent, the busi­ness doesn’t have an adjust­ed pay gap when com­par­ing peo­ple in the same roles. “Whether you’re male or female, if you’re in the same posi­tion, you’re going to make exact­ly the same amount,” Ter­ry says.

How­ev­er, Buffer does still have an aver­age gen­der pay gap, because more men occu­py senior roles at the organ­i­sa­tion. It’s some­thing Buffer is hop­ing to address by hir­ing more women into these top posi­tions.

One of the advan­tages of imple­ment­ing pay trans­paren­cy ear­ly in the life of a busi­ness is that new hires know what to expect before join­ing the busi­ness. “Because the team was still quite small in 2013, the founders were able to get a lot of buy-in from their col­leagues before their salaries were made pub­lic,” Ter­ry says. 

Now when peo­ple join Buffer, they should know what they’re going to make upfront. “There should­n’t be any sur­pris­es about the peo­ple mak­ing more or less than you, because we’ve made all of that avail­able and trans­par­ent to you before you join the team,” she adds.

Clear expectations

Some com­pa­nies don’t have the advan­tage of being a start-up with a small team. For these organ­i­sa­tions, it’s impor­tant to set clear expec­ta­tions from the off­set. Ter­ry advis­es busi­ness­es to make the tran­si­tion incre­men­tal­ly. “What steps can you take to reach your end goal?” she asks. “This might mean just pub­lish­ing your career frame­works at first and then adding a pay range for each role lat­er.” 

This is some­thing that Buffer does, too. Accord­ing to Ter­ry, the pol­i­cy is “con­tin­u­al­ly evolv­ing” and has been adjust­ed to include a for­mu­la for cal­cu­lat­ing bonus­es and based on an employ­ee’s loca­tion. “Even though we have a for­mu­la for cal­cu­lat­ing salary that’s con­sis­tent across the busi­ness, there are still ele­ments of it that we would like to con­tin­ue to improve upon,” she says.

Cap­i­tal­is­ing on the ben­e­fits of trans­par­ent pay may take some adjust­ment, but as more busi­ness­es look to improve pay equi­ty and close gen­der pay gaps, a trans­par­ent salary frame­work may be one solu­tion.