The Salary System will allow us to easily bring in fresh Market Data and compare it to our current benchmarks. This is part of our regular Rebenchmarking process.
In cases where the new data suggests that the market rate for a role has decreased, we will not drop pay for those in that role**.** We will keep them on their current benchmark (and earlier market data) until either 1) the market data suggests an increase or 2) the teammate sees another change that leads to a salary increase, such as a promotion or Future Iterations of the salary system. You can easily see what benchmark someone’s pay is based on by looking at the Benchmark column in the Salaries - Detailed tab located in Salaries Sheet.
In cases where new data suggest an increase during this Rebenchmarking process, those salary increases will be honored and individuals will see a raise. If the market has drastically shifted, we may at times adjust our Percentiles to avoid those individuals being significantly “underwater” (see below) down the line, however if the market rate has increased then we are committed to meeting that change.
In cases where new market data leads to a decrease in the salary for that role, the individual will be legacy’d and keep their current salary. In this case, we consider this teammate to be “underwater” in that they are technically at a lower number in a newer benchmark. In almost every case like this, these individuals will be back on course and switch over to the newer benchmark with a salary increase within one step change. In cases where someone might see a step change but no pay increase, we will issue a one time bonus in the amount of the difference between the steps.
For the case of the 2023 Salary System rollout, the Legacy Comparison tab shows clearly who is on the new benchmark (due to it being higher than their existing salary), and who is “underwater” and is keeping their legacy salary based on our previous salary formula and Radford Market Data.
As part of the Salary System we have decided that salaries will go down if and when a teammate drops levels, or when a teammate switches into a different role with a lower salary.
In the case of a lowered level, it is appropriate for the salary to drop since this will only result from a thorough review and determination that the teammate is delivering at a lower level than they are currently at. To keep the salary at a higher level, when others at the same level are being paid a lower amount, would not be adhering to our Compensation Principles, in particular Fairness. This is not a situation that occurs frequently and has only happened a handful of times in the entire lifetime of the company. It’s worth noting that there are a variety of situations where salaries increase, so even in these cases the salary will often increase even separate from a future promotion.
In the case of a team member switching to a different role, this would often be a situation where someone is making a career change and Buffer is supporting them in learning a new skillset. This is something that already comes at an expense to Buffer vs us going out and hiring someone who already has this skillset. If the team member were to go out and find a role at another company, they would be able to attract a salary at the market rate for their level in that role. It is also only fair to others in that same role at the same level, for the new team member to match their salary. In an unusual scenario where someone switches to a role they already have experience in, and in fact this results in a salary increase, this of course would be honored.
These two scenarios and our decisions around them are important for the integrity of our salary system and adherence to Compensation Principles, especially Fairness. You can trust that salary will always match level and role (i.e. we will not legacy based on a different level).
The other instance where a teammate’s salary might go down is due to exchange rate fluctuations. You can read more about How we handle exchange rates here.