You may have already seen our salaries and our salary formula, but another part of our process is to annually review the benchmarks that we use in the formula. To do this, we look at the data source for our salaries and make sure that all of our team’s salaries are keeping up with current market rates. We’ve been doing this since 2018, and we never decrease salaries during a rebenchmarking. In the last two years, we’ve also ensured that rebenchmarking always results in an increase rather than no adjustment.
Here’s an inside look from our most recent rebenchmarking in April 2022, followed by a deeper dive into how we approach salary rebenchmarking in general.
The Numbers Behind Buffer’s 2022 Salary Rebenchmarking
This year, we adjusted with a minimum increase of 3 percent and a maximum increase of 6 percent to align with market trends and help with rising costs due to global inflation.
This resulted in an additional increase of $42,000 per month or $504,000 per year to our overall operating expenses.
With a minimum increase of 3 percent and a maximum increase of 6 percent, salaries were adjusted in total between $2,078 and $13,500 per person across the team.
How Salary Rebenchmarking Works at Buffer
Every year at Buffer, we do a salary rebenchmarking, where we look at all of our salaries at Buffer and adjust them upwards to keep up with the current market. This is not a merit increase or any indicator of an individual’s value or contribution to Buffer. These changes are strictly to keep up with the job market. There are no changes to any other benefit or grant as a result of rebenchmarking, and we never allow rebenchmarking to result in decreased pay.
To go about this, we compare all of our salaries to the market using our trusted compensation data source, Radford. Radford benchmarks thousands of tech jobs around the world and offers extensive training for our team to make sure that the way we match roles aligns with the way other companies are matching roles in the market.
In our salary formula, we benchmark all roles to the San Francisco labor market based on tech survey data for the software industry. For all positions (excluding the executive team), we use the data from companies of all sizes. For the executive team, we do add headcount filters to be sure we aren’t comparing to salaries of executives at much larger companies.
From year to year, it’s not uncommon to see some variation in benchmarked numbers, either up or down. Ultimately, benchmarks are a reference point, and we apply them in a way that makes sense within Buffer. We have the ability to decide when we want to be influenced by the market and when we want to disrupt the market. For an area like customer advocacy, for example, we continue to lead the market in pay because supporting customers is at the core of what we do, and we believe our pay should reflect that.
To smooth out the volatility of the data over time and to stay true to our overall strategy, the 6 percent cap during the re-benchmarking season ensures that future merit-based promotions and pay changes result in salary increases. This is a decision that we’ve made given the factors we see at play right now, but it is something we will evaluate as part of this process each year.
We reassess every teammate’s salary at Buffer during the rebenchmarking, but there are a few cases where some teammates won’t have their salary adjusted either because they recently moved to a new job code that already accounts for inflation or because a greater change around their role is currently in the works.
Over to you
Do you have questions about how we do this at Buffer or want to share how your company approaches compensation? Send us a tweet!