This was a huge project spearheaded by our incredible Head of People, Leia Rollag. I’m going to go into some of the thinking and dreaming we did to get here, and Leia will share a follow-up post on what it takes to go from dreaming to reality, along with some of the details on how to execute a program like this.
On June 16th, 2021, we shared some exciting news with the team: effective on July 1st, the Wildbit team will be paid consistently regardless of where they live. We have chosen to benchmark our compensation to Philadelphia.
An evolving compensation strategy
From our inception, we have worked with folks from all over the world: Wildbit’s first team member back in 2000 lived in Romania. Finding folks in areas where their cost of living, and therefore salary expectations, were lower allowed the business to grow in the early days without outside investment.
As the business grew, we were able to move away from that cost-saving strategy. We hired folks in the US, sponsored US visas for folks to move to the States, and paid above location-specific rates when the salaries seemed too low. We didn’t work with folks outside the US to save the company money: we chose the best folks who applied, or hired in specific timezones to better support our customers.
Most of the time, our compensation strategy involved asking folks how much they want to make and working to meet their goals. Simple, but not great, especially if you’re optimizing for equitable pay. We’ve been a remote company from day one, and a software developer in Romania is doing just as exceptional work as someone in Philly. Shouldn’t it be equal pay for equal work?
I think the argument becomes much stronger when we look at it from a personal choice perspective. In the US, when someone moves to a place with a lower cost of living, we never decrease their pay. That would be preposterous; they’re making a personal choice with their own financial goals in mind. Maybe they’re moving to be closer to family, to save more money for down payment, or to be able to retire sooner. It’s their choice. But at the same time, we had folks living in countries with a lower cost of living and being paid based on their location.
While this is something Chris and I had hoped to accomplish at some point in our careers, I would have never thought we’d be able to execute this so quickly.
First, we were able to pull this off because we’ve had Leia on the team for the last 9 months. Leia is our first Head of People, and she came to Wildbit equipped with deep experience and knowledge in compensation strategy. She took an idea—our dream—and modeled the whole thing out to look at real-life scenarios. What would it cost? Who would be affected?
Second, we can afford it! It pays to be product agnostic. Postmark, our largest product, is doing exceptionally well. And over the last few years, our team has gotten very good at building high-value, low-maintenance products that provide cash to spend on projects like this one. All this has allowed us to take the excess profits and give them directly back to the team. Thi Tran, our Director of Finance, was able to take Leia’s compensation models and apply them more globally to how it would impact our profits over time.
Why choose Philadelphia?
Whenever we’ve explored the possibility of doing location-agnostic salaries, we thought the benchmark would have to be San Francisco. Of the smaller, private companies that have made similar moves, they boast about choosing this benchmark. For Chris and I, that not only seemed unrealistic, but also kind of silly.
We don’t compete the same way that VC-backed companies compete. You don’t come to Wildbit simply to make a ton of money and then leave for the next place with more savings and a lottery ticket. You come to Wildbit for a bunch of other things. We run a profitable, calm, 32-hour work week company. We have strong values and principles. You’d work with wonderful human beings that will support you to do the work of your life, slowly and patiently. No politics. No unnecessary drama.
So when we set off to come up with a compensation strategy, Leia modeled out San Francisco, along with Philadelphia as a comparison. Philly is not only the city where Chris and I live, but it’s also the city where the business is currently incorporated. Plus, Philly is competitive when it comes to compensation, sitting in the next top tier after the big tech hubs of San Francisco and NYC. When we looked at the math to get everyone to Philly, we realized that not only was it financially doable, but also still very impactful to our team. It felt like a really huge win, and I’m excited to have made this work our own way.
Location-agnostic pay is the first step in a year-long project we call “solving for fulfillment,” which includes compensation strategy and standardizing recognizable titles at Wildbit. We had planned to roll out the titles and comp together at the end of the year. But once we made the decision, I got too excited to hold back on bringing everyone to the Philly salaries right away.
We started by benchmarking everyone to the 75th percentile. Our goal is to continue increasing our benchmarks to get to the 90th percentile. We are modeling the milestones we need to reach to get there while maintaining our profitability goals.
Anyone on the team that wasn’t at the 75th percentile will see salary adjustment effective on July 1st. In total, more than half of the team saw a bump. As a policy, we aren’t lowering anyone’s salary. If anyone is over the benchmark, we’re going to address this at the end of the year with more conversations around career journeys.
Location-agnostic pay is right for us
I don’t believe that location-specific pay is evil. Honestly, there are some unanswered questions, and some decent arguments around why paying local rates may be the right choice for some companies.
Wildbit is on a constant journey to be as people-first as we can. We weren’t evil when we had location-based pay. And we’re not suddenly saints for moving toward location-agnostic pay. Companies are at various stages on their people-first journey. What makes the journey great is living up to our 2nd value: Be guided by purpose (not process or practice).
We ask until we understand why. We don’t use best practices unless they’re best for us. We treat process as a tool, never hesitating to adjust if there’s a better way to achieve our goals. We aren’t afraid to move on from things that no longer serve us—and we don’t trade long-term impact for short-term gain.
For us, this is a huge, positive step in our journey.