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News — 03 April, 2019

HOT’s Journey through Salary Transparency

In September 2018, HOT held an in-person meeting of staff alongside our annual Summit in Dar es Salaam, Tanzania. After gathering ideas from staff, we ran a survey. The results: highest priorities for improvement were salary, benefits (specifically health care) and learning. This is the first post about what action we're taking based on what we heard, focusing on what we believe is a major leap forward for HOT: salary transparency.

HOT as a global community and staff team have always held the core values of openness and trust near and dear to us. For the staff team, that’s allowed us to do some really creative and unique things. For example, since 2011 we’ve maintained a remote-first workforce. Apart from teams in-country for a specific project, the remainder of HOT’s workforce - currently 20 people, typically work from a location of their choice. Team members trust each other to deliver on their commitments, help colleagues, and are open to feedback when something isn’t working.

team-99800e.png Our amazing global (remote) team.

In the fall of 2018 we realized that as HOT grew – nearing 100 staff when including our local affiliates in Tanzania and Indonesia – no longer did each person know everybody else on the team. That was a bit of a culture shock for us. At the same time, some team members expressed frustration at the lack of explanation around why a colleague in the same office and similar position could be paid a different rate. No one knew whether there even were disparities in pay. Could a man and a woman in similar roles be paid two completely different amounts, for example?

HOT Tanzania team

HOT Tanzania / Open Map Development Tanzania team and pet drone

In short - we were attempting to promote a culture of openness and trust yet not talking about how decisions on salary were being made. While pursuing transparency we were inadvertently promoting – among some, at least – feelings of inequity. No one knew whether salaries were fair or unfair, equitable or inequitable - in part because we had never analysed it. An important point for us was that feelings of inequity – even if not always grounded in reality – were as equally problematic as real inequalities. After all, who wants to work in an organization that tolerates unfair treatment of staff?

We knew HOT had to get more transparent about the salary decisions we were making, and we knew it was going to be tricky. Here’s just one example why: It’s always been in our blood that we’re truly a global team. That is – we do not, and should not, value the contributions of one type of team member more than another (employee vs. contractor or local vs. international). We wanted to avoid the “dual system” of job classification that has plagued the UN system and certain other NGOs, where international staff could be classified - and paid - on completely separate scales and receive vastly different benefit packages than local staff. This, in my view, is even more critical in an international NGO like HOT where we have all types of unique arrangements – staff hired locally to work locally on a HOT project, staff hired from a global candidate pool to support the global team, and staff hired from a global pool to deploy to a project location outside their home country. We have staff from countries with higher costs of living deploying to and working in lower cost of living countries. And staff from countries with lower cost of living deploying to other low cost of living (or sometimes higher cost of living) countries.

HOT ID - Mhairi and Harry

Harry and Mhairi in between mapping at the HOT Indonesia office

Salary transparency and our goals for HOT

To address this, we decided to aim for complete salary transparency across all projects and all locations. ‘Salary’ and ‘transparency’ are two words you don’t often see together. This was unfamiliar territory - and definitely scary. For some, it conjured up thoughts of: Will I be forced to reveal my salary publicly? What if I’m paid too much? Too little? Will I be given a raise? Could my salary decrease? After talking with organizations who had implemented some form of salary standards (thanks, colleagues at Ushahidi) and reading about others, it became clear that there were many forms of transparency. Some organizations were transparent internally (among staff) while others went public (e.g. Buffer). Some published a raw number without explanation due to legal requirements (e.g. government employers like the State of New York) while others published a formula (again, Buffer). For HOT, we felt like the best solution was one that emphasized transparency and equity during the process, rather than being overly focused on the end result without any explanation of how it was determined. Our management team felt we needed a solution which accomplished the following:

HOT top 10 list for salary transparency:

  1. Bring consistency to pay decisions; provide a clear framework for salary negotiation at hire
  2. Remove opacity in how pay is determined; make subjective decisions objective
  3. Demonstrate that salaries are 90% + of median private sector market rates for small organizations of our size
  4. Where inequalities exist (gender/location/etc), find them and get rid of them
  5. Publicize an open formula/method, not a raw number
  6. Demonstrate we’re ONE HOT: int’l & national staff on a single formula
  7. Provide clarity on roles/levels and possible path for career growth
  8. Each staff member is aware of the factors that went into their salary decision and how they were weighted
  9. Each staff member understands the reasoning behind their salary and can compute it themselves if desired since the factors are known
  10. Each staff member feels they are treated fairly and consistently based on a defined system

Before rolling out the framework

As we moved toward salary transparency, we took at look at salaries across HOT. Here’s what we found:

  • We had a 25x ratio between highest paid staff member (Executive Director) and lowest (digitizer/data entry in Indonesia)
  • We had a 5.5x ratio between highest paid staff member (Executive Director) and average (mean) salary: an impressive feat given that we work across high and low income countries. This compares to the US for-profit average of 1:243 - or 243x. Microsoft has a 1:11 ratio, and Apple is 1:43 (relatively low, but does not take into account stock options or large contractor workforce).
  • Gender: Men make on average $11.72/hour vs. women who make on average $8.83/hour

I’d characterize this as follows. Even with operations in very different countries, HOT is still relatively flat compared to many organizations. There are not massive variations in pay between average salaries and higher level management salaries. This is mostly a good thing although “too much” pay compression can also have unintended consequences including demoralizing veteran staff members and inability to retain top talent.

Gender disparities are an issue and we need to figure out what’s causing them. There are lots of variables here; the difference above does not necessarily indicate or (rule out) pay differences for men and women having the same role. However it may indicate relatively fewer women in higher paid management positions (overall, while gender equality has improved slightly in HOT staff team, we’re still at just under 40% women on the team).

The HOT Salary Framework Formula

In the end, after consultation with our entire management team and all country offices across HOT, we decided to adapt a variant of the Ushahidi/Buffer model. We ended up with a simple, global standard that will be used to determine salaries and wages at HOT, and 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 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. You can click on the diagram below to see the details. HOT salary formula.png

After rolling out the framework

We’re currently moving forward with rolling out the new framework globally. It was applied retroactively to all staff on the global team (remote staff) of which we had 20 as of January 1, 2019. Some initial findings:

  • Nine of 20 staff were already paid above the rate the framework computed. Rather than decrease their rate, no change was made for the duration of their contract. This in effect “grandfathered” them in to their current rate while industry benchmarks and the formula catch up over the next 1-2 years.
  • Eleven of 20 staff members were paid below the rate the framework computed and were given an increase of, on average, of 16% (after removing one outlier). For most staff this increase was made immediately and for a few staff members we are rolling out the increase over 6-12 months as project budgets permit.
  • Gender is not a factor in the new framework. As such, it is no longer possible for any discrepancy in pay to exist among men and women having the same role, location, and years experience with HOT (used at January 1st to set personal capital factor). The formula doesn’t remove all management discretion from the process, though, nor would we want it to. There is still some flexibility in setting some factors like the personal capital factor and we’d want to monitor salary levels of men and women going forward to ensure new discrepancies don’t arise.
  • In Uganda, all HOT staff were already contracted above the framework amount.
  • In Indonesia and Tanzania, because HOT works through affiliates Perkumpulan OpenStreetMap Indonesia (POI) and Open Map Development Tanzania (OMDTZ) respectively, we are still working with our colleagues to apply the framework within those partner organizations. HOT, POI, and OMDTZ have decided to apply the framework to all staff working exclusively on HOT funded projects and will share back results in the coming months.

HOT Volunteer

Pictured: HOT volunteer

As we enter the second quarter of 2019, there are a number questions for which we don’t have all the answers yet. I’ll make it a priority to report back on these, including: Has the framework made the hiring/recruitment process more straightforward? Did the new framework reduce the gap between the average woman’s pay in HOT and the average man’s pay? How did rollout in Indonesia and Tanzania affect pay? Are staff generally pleased with the outcome or do we have more work to do? I welcome your feedback, comments, and suggestions!