Three months ago I decided to start making Undercurrent’s salaries transparent. The decision was triggered by a late night discussion a few of us were having about the value of transparency. We were frustrated that the design of our compensation system lacked clarity, felt unfair at times, and wasn’t being improved on in a public forum at the same frequency as the rest of our business model.
To help us inch forward towards salary transparency, we created a chart with a handful of options –ranging from being completely open to keeping things as they are– and asked folks to vote for their preference. At one end of the spectrum we asked for your name, current and historical salaries at Undercurrent, and your bonus (% of total salary). At the other end of the transparency spectrum we’d open up salary ranges at each band level, but nothing more.
Over the next couple of days the votes trickled in. More tenured folks tended to opt for full transparency, while the remaining votes were scattered across the other categories. After collecting the majority of the votes… nothing happened. It was one of the few moments in Undercurrent’s holacratic history where something felt too big to process inside of a governance meeting. Everyone wanted a say. Instead of seeking consent the business wanted to seek consensus. It felt like the very antithesis of the principles we so often see and coach against and yet we couldn’t fight our desire to have a giant, company-wide discussion about it (though that didn’t happen either). The whole thing felt too hairy to deal with so I went out on a limb and decided to create tension inside the organization to force the issue.
This lead to a Google Spreadsheet aptly named Undercurrent Salaries: the first row had my name, band level, tenure, start date, salary, bonus %, gender, education, experience prior to UC, total work experience, and indicated whether or not I was billable. After entering my information and taking a brief pause to reflect on what was likely to happen next I turned to a colleague and asked if they’d like to participate: the price of entry was their current and historical salary information. They agreed to play along and we quickly spread it across the organization with ~60% of the business agreeing to share their data within the first day (it’s now somewhere around the 80% mark).
As expected, we received enthusiasm and discomfort in nearly equal measure as we went around asking everyone 1-1 if they’d like to join the spreadsheet. An opt-in approach naturally created this pressure and anxiety around being “in” or “out” of an important moment in our trek toward 100% transparency. Even some of the people who decided to share their data were uncomfortable with the approach we took (including some of our partners), but agreed that the upside was worth it. Everyone wanted to uncover pay gaps, look for gender disparity, understand how the model works, and in some cases decide whether or not it’s worth it to stick around and become a leader in this business.
Observations From The (Incomplete) Data
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It’s tough to confidently identify a gender pay gap with the data we have, but by my own measure I believe a mild one exists. For work on the billable side of the business we tend to pay our male colleagues roughly 4% more than their female counterparts to do the same work at the same band level.
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We have 12 band levels at Undercurrent and the salary ranges for each overlap and vary wildly. Some band levels have very small ranges, others quite wide. This isn’t necessarily a bad thing, but it’s something that often leads to a lot of confusion and debate. For example, someone who’s a Band Lvl 5 could take home less than someone who is a Band Lvl 4 and share the same accountabilities.
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It’s unclear what the compensation system values. Tenure, previous work experience, and education don’t appear to carry a lot of weight. For example, more tenured employees (> 3 years) effectively make the same salary as someone who sits at the same band level, but is new to organization.
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Before band levels (and Holacracy) Undercurrent employees used to hold more traditional titles: Associate Strategist, Strategist, Senior Strategist, Associate Strategy Director, Strategy Director, and so on. Those of us that were around during that time also offered up historical salary data and it’s really interesting to look at the similarities and differences. One of the more striking findings is a 39% increase in pay for what people used to make to lead team work/sales compared to what it is today. The work we did as a business was much different back then, but it’s arguably much more challenging now.
Since making our salaries transparent I’ve felt more trust between my colleagues, had many conversations about improved compensation models, and I believe some people have had their individual compensation adjusted too. I’m hopeful that when we do make a round of edits to the model that I’ll be able to share that here with everyone else.
On a personal note, I have to say I feel proud to have lead this whole thing. It was therapeutic and uncomfortable all at the same time. I had a lot of support, but I also created a lot of anxiety for folks. I still believe that had we not done it this way or had we waited for the ‘right time’ that it would have never come and we’d still be operating in a closed environment.
