HOT began to roll out our new salary framework in January 2019. The framework is a simple, global standard that we use to determine salaries and wages at HOT, that applies to all HOT employees and individual contractors in all locations. With this framework, HOT aims to provide more transparency into salary decision making and ensure a consistent and equitable process for all staff, regardless of position, location, gender, or any other distinguishing characteristic.
The HOT Salary Framework
The HOT Salary Framework is based upon a formula made up of four factors that, when multiplied together, determine a HOT employee’s annual salary or, for contractors, hourly rate. Each of these factors is explained in more detail below:
- The “Role Base Salary” is a number in USD that serves as the base benchmark salary for each position in our organization.
- The “Location Factor” (between 0.2 and 1.0) adjusts the base salary to local cost of living (taking data on salaries, housing, food etc into account).
- The “Personal Capital Factor” (between 1.0 and 1.25) factors in applicable skills, level of responsibility, and demonstrated achievements unique to each individual.
- Lastly, the “Additional Earnings” provides an additional 8% for contractors for whom HOT does not pay any local taxes.
To calculate a salary, first determine the Role Base, then multiply it by the Location Factor, Personal Capital Factor, and Additional Earnings Factor (if any). The resulting number is an annual salary for full-time employees. For part-time employees and contractors, divide the annual salary by 2080 (based on 40 hours per week x 52 weeks) to determine hourly rate.
Each staff member is assigned a standard role based on duties, level of responsibility, and years of experience. All roles are benchmarked against US average pay for that position using Glassdoor.com with an organization size of 0-50 employees (no location specified). This is the organization size that best aligns with HOT’s annual revenue. A similar or “best fit” title is used if there is not enough data points on Glassdoor.com for HOT’s exact title.
Next, a “Nonprofit Multiplier” of 90% is applied. We are driven by mission - not profit - but still want to compensate staff well, within our means. For us, this means paying 90% of market average salary for organizations of our size.
Roles in HOT
Guidelines for roles
HOT work locations are grouped into several bands according to two inputs:
- Cost of living (compared to Washington, DC, US) Source: Numbeo.com
- Average salary (in your country compared to the US) Sources: ILO, UNECE, Gallup
Bands range from 0.20 to 1.0. HOT’s base band is 1.0 for US-based staff based on a Washington, D.C. benchmark.
Staff deployed on mission with HOT outside of their home country for long periods of time (over one month)
Staff deployed from lower cost of living locations receive a “bump up” to the 0.50 band to recognize hardship in being away from home. Staff deployed from higher cost of living locations continue to be paid based on their home band in recognition of costs that they continue to bear in their home country such as housing, retirement savings, student loan or housing debt, etc.)
The HOT Framework also accounts for “Digital Nomads”: Those staff with a permanent address in 1.00 or 0.90 bands but who choose to live/work in a lower cost of living country. HOT’s “Digital Nomad” rate is 0.80, which gives staff on the global team the flexibility to live and work where they choose while sharing cost savings between the staff member and HOT. HOT also has a Nomad rate for remote staff hired from lower cost of living countries. A higher than normal multiplier of 0.50 is used in recognition of the fact that HOT is recruiting their talent from a global hiring pool.
Personal Capital Factor
Each staff member is assigned a “Personal Capital Factor” at time of hire. This determines a staff member’s level within a given role. This factor ranges from 1.0 to 1.25, allowing for a range within each role. Personal Capital Factor is set by hiring Director at time of hire and approved by HOT’s Finance Director to ensure consistency. The default level is 1.0, which may increase based on:
- Skills (gained from prior experience and education - may include language, technical skills/programming languages)
- Scope of responsibility
- Results/achievements (within HOT or previous)
Because HOT often takes on short term, time-sensitive projects, we rely heavily on contracting individual specialists for time-limited projects. Working as an independent contractor offers great flexibility in terms of where, when, and how work is performed. However, we recognize that contractors need to cover more of their own costs (tax, health, equipment, workspace, cost of taking time off).
A 1.08 multiplier is used (8% additional pay) when calculating a contractor’s rate in locations where HOT does not incur any tax liability for hiring contractors.
Other Additional Earnings
Deployed staff may receive a housing stipend, per diem (time limited), and home leave travel allowance (for long deployments). More information on these benefits can be found in HOT’s Expense Reimbursement Policy (staff access).