One of the benefits of our new Salary System, is that the extensive rebuilding of our salary methodology Approaching salaries from first principles, means that it is relatively easy for us to explore future scenarios of changes we could make.
There are a number of changes we have in mind for the future, which represent areas of opportunity to further simplify our approach and adhere even more to our Compensation Principles.
It is important to note that all of these scenarios will require budget in order to carry them out. The budget impact based on the current team as of December 2023 is listed below for each scenario.
In order to have the possibility to carry out these changes, we will need to grow and hit profitability in order to have the budget to put towards these adjustments. We have the opportunity to work together as a team to achieve these improvements in simplicity and have all of our salaries positively impacted by the changes.
We have a long-term goal that salaries at Buffer will not be based on location. We stated this commitment in Our Vision for Location-Independent Salaries at Buffer in early 2022 and made our first significant step towards it by eliminating 2 of the 4 location bands we had at the time.
Today, salaries fall on either the Global or High band. Global sits at 90% of the High band. It’s important to note that by paying 90% market rates which are based on San Francisco (see Market Data), we are already paying well above market for almost every location in the world.
We can explore a scenario where we bring our 90% Global cost of living band up to 100% and eliminate the concept of Cost of Living entirely from our salary system.
Annual budget impact: $1,030,772
Note: we will likely remove the Salary Choice when we carry out this change (see below for more details). This would lead to an adjusted annual budget impact of $820,772.
One area we plan to improve in the future is to align the Percentiles we use across the company. Due to the fact that for the 2023 Salary System update, we did not have significant budget, we chose percentiles which matched as closely as possible with the prior formula. This has resulted in lack of clear consistency of percentiles across the team.
As a reminder, our current percentiles across areas are as follows:
Percentiles brought up to 80th
Percentiles brought up to 85th
For the updated percentiles, we have two scenarios: