It was an unprecedented move when Joel Gascoigne didn’t just release details about his salary, but also all the employees at his startup, Buffer (Gascoigne earns $280,500 today). A former Master’s student at the University of Warwick, Gascoigne co-founded Buffer in 2010 with Leo Wildrich. Three years into the startup, Buffer adopted transparency so radical that caused a ripple of effects across the business world, with magazines and news sites flocking to Gascoigne to understand: why?
For Buffer, transparency was not as superficial as simply allowing employees to know how much their co-workers are paid. Gascoigne took it multiple steps further, releasing salary data online and incorporating transparency into every workflow wherever possible.
Today, Buffer is almost a decade old and boasting more than 75,000 customers from the likes of Business Insider, Fortune and top 10 NFL team Denver Broncos. At a $60M valuation, Buffer is massively profitable—something you can discover from their revenue and growth reports.
You can even find out the progress of their product development on their public Trello board (which is 100% open to public comments too).
Buffer is also famous for buying out all its investors, which cost $3.3 million.
A social media management software that is here to stay, one can safely say that they pioneered the movement for radical transparency. Today, despite being in an era where consumers demand transparency and employees want more information, companies are still very much opaque. Despite progress—Whole Foods and SumAll took to pay transparency—more than half of HR professionals are still stubborn about adopting it.
Buffer found success in being transparent: every company can do the same.
Transparency is a very subjective term. In Buffer’s case, they adopted it as a core value and hence, applied it across the company. For some companies, transparency can be negotiated; certain information is considered too sensitive to be revealed to non-related parties, even if they are employees.
Extreme transparency, hence, is not everyone’s cup of tea. In reality, companies often champion transparency—it’s the commitment part that is tough. Gascoigne had to artificially insert it into every single workflow to ensure a uniform culture since 2013. Seven years later, they’re a sprawling team of 125 employees spread across 28 countries.
Buffer is an exemplary example of taking transparency to the extreme, then committing to it for every action they take. Their integration led them to:
- Releasing data on the diversity of their team and how they’re trying to become more inclusive
- Releasing all the salaries of their employees and how they derived the base salary numbers with their salary formula
- Showing how they share profits and contribute to charities
- Showing how much they spend on perks & benefits
- Integrating transparency into their workflows: if you’re an engineer sending an email to another engineer, you have to cc every engineer in the team even if they’re not directly involved
- Releasing data on the performance of their blog
Through this, Buffer found success—which is only going to grow exponentially in the coming decade.
A Case for Employee Engagement
There’s a reason why Buffer’s commitment to transparency has got them on several news sites and digital publications. Unprecedented and arguably ahead of their time, Buffer succeeded in tearing down siloes and building an internal culture that focused on collaboration and teamwork.
In a time where transparency is paramount to hire, engage, and retain employees, Buffer’s commitment becomes a future-forward step.
Anyone reading statistics about what employees are emphasizing today will realise that salary isn’t everything. A Hays’s survey in 2017 discovered that 71% of employees are willing to sacrifice parts of their salary for the right company culture. Tinypulse found out that, regardless of salary, not having a good culture meant that an employee is 24% more likely to quit.
Buffer’s success is evident: on Glassdoor, they’re rated 4.5 stars out of 5.
Treating Employees like Competent Adults
It sounds painfully obvious: you’re employing adults, why would you not treat them as such? Unfortunately, most companies do not do so.
If employees are adults that handle their own personal finances, why would they not understand the financials of the company?
Buffer understands exactly that by releasing their growth, revenue, and profit numbers. By doing so, the company empowered the employees to think with much better context. For instance, they might rethink their marketing strategy after a persistent fall in user growth. They might also double their efforts on lead generation when they see that revenue is falling each quarter.
Essentially, Buffer gave the employees ownership.
This way, employees can see how their efforts can fit in the grand scheme of things. They know what their marketing campaigns will do. They know how their newsletter will benefit the company. They know the impact of their erroneous decisions and grave mistakes.
By doing so, Buffer drives employee engagement.
Instead of making sure their employees are happy, Buffer is focusing on the most significant part of the employee experience. Employees associate themselves with the company and their efforts with the business outcomes.
Employees at Buffer know the ‘why’ behind their actions. It’s a solution that begets multiple positive outcomes—employee engagement has been shown to drive productivity, service excellence, work performance, and even revenue.
Career Progression made Transparent
How many times have you seen guides that told you: “If you want a pay raise or a promotion, you have to ask”?
At Buffer, they demystified the way they hire and promote leaders. In a blog post, they detailed a two-path framework that included growing leaders and technical experts that aren’t necessarily required to become a leader.
By making it transparent—with rubrics and outcomes at each level—employees can rest assured that their efforts will be recognized. They will know what is required of them at each level and thus, work with the next level in mind. Rather than work without an aim (e.g. putting effort into the things that won’t demonstrate whether they are deserving of a raise), employees will start thinking a step further.
It’s a win-win situation.
Committing to Pay Equity
Persistent wage gaps due to gender, ethnicity, nationality, and disability are still common in the workplace. One of the reasons is due to employees being unaware of wage gaps between them and their co-workers.
Buffer’s data on salary and how they calculate the salary is aimed exactly at that.
Rather than give a range—which many companies opt for—Buffer released data down to the last cent. By doing so, employees don’t have to draw their own conclusions and assume incorrect things about how they’re being paid: there’s a formula telling them how it happens.
For instance, one of the factors that Buffer consider is the cost of living. Being a fully remote team, not every employee resides in a place where there is a low cost of living. Countries like Singapore and cities like New York would rack up a higher cost, as compared to places like Hanoi and Bangkok.
Suppose Buffer was to pay based on equality—everyone is going to get the same salary, assuming that they were similar in terms of seniority. That also means everyone will get the same pay regardless of their situation and capability.
Hence, an employee living in New York would earn considerably less “real income” (i.e. after factoring in expenditure like rent, food, and bills) as compared to someone living in Hanoi.
However, Buffer took it a step further to make it equitable.
By factoring in the cost of living (which is split into tiers), employees are paid according to where they live. Hence, someone from New York can also earn similar “real income” as someone from Hanoi. As such, Buffer leveled the playing field and made it fair—one cannot argue that they’re “not paid enough”.
Influencing the Organizational Culture from Day 1
When Buffer introduced radical transparency, they saw a 229% increase in the number of job applicants in the next year. Besides the quantity, the quality of candidates rose as well.
Essentially, Buffer created an image of transparency that influenced the organizational culture. By being transparent about everything in the company, candidates and employees know what the company is like. This creates an inherently positive homgeneity in terms of core values: existing employees will become more transparent, and job candidates are already believing in it from the beginning.
Buffer built and aligned their culture from day 1. They created a culture where employees are vulnerable to ideas and feedback. With their two-path framework, they created a career progression ladder for those who are more experts than leaders.
By giving everyone ownership, employees feel like they ‘own’ the company.
However, radical transparency is not something that any company can implement within a day. Buffer took 7 years and they’re still updating it till this day while other companies are only looking at a partially transparent pay transparency. Though Nordic countries are putting in efforts to create a culture of transparency across the nation, many companies are still opaque with company information.
Rather than call Buffer’s transparency a ‘radical’ idea, it should be normalized and set as a floor for this decade. As millennials and Gen Zers gradually occupy larger percentages of the workforce, the demand for transparency will be higher. Eventually, companies will have to meet it regardless. By then, it might be a little late—companies should start today, before taking the next 7 years to perfect the core value.