Podcast

Should where you live determine what you're paid? [Podcast]

A deep dive into the location-agnostic compensation model.
September 29, 2021
Oyster Team
Should where you live determine what you're paid? [Podcast]

Welcome to New World of Work: a podcast exploring the new frontier of the modern workforce. In each episode, we’ll hear from some of the world’s best and brightest people and culture experts on the cutting-edge topics HR professionals are most interested in today, explored through a global lens.

Episode description

One challenge that’s proven to be a hot-button issue in the HR world recently is the question of whether or not an employee’s location should dictate their salary. The location-based compensation model suggests that where an employee lives should influence their salary, while the location-agnostic model takes the opposite approach. In this episode, Rhys sits down with Leia Rollag, Head of People at Wildbit. Recently, Leia spearheaded the company’s move to location-agnostic pay—a strategy that ensures all employees will be compensated based on the quality of their work, not on where they live. Leia shares her take on the location-agnostic compensation model and how it can help to level the playing field in remote workplaces.

Episode transcript

Rhys: Welcome to New World of Work: a podcast exploring the new frontier of the modern workforce. 

I’m Rhys Black, Head of Remote at Oyster, a global people operations platform making it easier than ever to build a brilliant team on an international scale.

On New World of Work, we’ll hear from some of the world’s best and brightest people and culture experts on cutting-edge topics that people operations professionals need to hear today, all through a global lens. 

Join us as we navigate this new world of work together and learn more about each other along the way.

The remote revolution has sparked a fundamental shift in the way we view the traditional 40-hour workweek model. One challenge that’s proven to be a hot button issue in the people operations world is the question of whether or not an employee’s location should dictate their salary.  

For example, should an experienced developer living in India be paid the same as an employee with the same experience level living in North America? According to the location-based compensation model, the answer is no.

In addition, with the ability to work remotely, many people have moved to less populated areas to take advantage of a lower cost of living. Should these people have their pay slashed as a result, or should it stay the same, regardless of where in the world they’re living?  

Leia Rollag is the Head of People at Wildbit. Previously, she held positions at Netlify, IFTTT and Thumbtack. Most recently, Leia spearheaded Wildbit’s move to location-agnostic pay—a strategy that ensures all employees will be compensated based on the quality of their work, not on where they live.

In this episode, Leia shares what it was like joining a company who is putting their money where their mouth is and actioning the kind of change that truly puts people first. Leia kicked off the episode by sharing a bit about her career so far, her first experiences with Wildbit and its co-founder Natalie, and what she loves about the company’s culture.

Leia: Like a few of us, I've been working in tech for a while. This is my fifth tech company in-house, and I'm a bit of a recovering startup. I tend to gravitate towards companies that have strong engineering cultures and I like to get in and around twenty five team members. I've gone all the way up to 600 before. But my my my favorite spot is the building stage. And that's why I was attracted to Wild because this is their first I'm their first people person, which is really surprising having been a 20 year old company. And I geek out on compensation systems benefits and I've done comp and almost all of my roles. And, you know, last year was hard and I quit my job during covid and I was seriously reconsidering whether or not this is the right role for me being, you know, ahead of people and responsible for so many things. I was talking to a colleague who is a H.R. consultant, and she was saying, you know, people first companies just don't exist, in fact, for like three years away from people for his company and existing. I was like, well, now that was one year ago. So we're two years, so we're closer. But at the time, I just wanted to be a little bit more optimistic than that. So I have at least I had at least one more go in it. So I found I actually hadn't heard of Wild Bit before I found them on the people, geeks, Caltrans people, geeks like Channel. And when I was interviewing Natalie pings me and she's like, hey, do you want to just chat? Like, OK, yeah, let's just chat. So I get on. And she had just come back from an exercise and she had her feet up in the chair and her hair tied up and no makeup on. I was like, who is this real human? I'm loving this. And then we just had a real human conversation. And what I realized was that I really wanted to prove to people like my colleague that people first companies did exist and then lo and behold, while it was here doing it, you don't have to put profits before people in order to be a profitable business or successful business. And so she's doing it. I wanted to prove it was a good match. And actually, my one year anniversary is coming up next week.

Like I said, while it is a people first company, and what that really means is that we believe businesses exist and should exist for the human constituents. So that means like for your team, for your team's community, like the ripple effect, their families and the people that they interact with on day to day. And then also, of course, for your customers were product agnostic. We have four products right now. I think Postmark right now is the most well known. But we just recently launched People First Jobs, which is a job board to help candidates find companies that are people first, like while bit and what do I love? So I think it's really just about how much the leadership team and managers and everybody else sees each other as actual human beings with real human lives and real human experiences. For me, that means I don't have to bulletproof my arguments to get things done. And I think that's because, you know, everyone sort of bought in and the leadership team is collaborative, which is kind of rare. So all those things are what I love about the company culture.

We have 36 team members right now, so we're still quite small and that's intentional. That's something that we try we try to preserve and we don't have an HQ, so we're all remote. And the company has been remote first since they started, which I think we're coming up on our 21st anniversary. So it's pretty long, pretty long standing company and a third of our team are global. We have people in Serbia and the U.K. and Russia. We have a lot of people in all parts of the world. And the rest of us are in the US with the majority of people on the East Coast because my founders are live in Philadelphia.

Rhys: As Leia mentioned, Wildbit was an early adopter of a remote working environment. With team members working all over the world from the U.S. to Russia, Wildbit has plenty of experience with approaching work through an international lens.

Next, Leia shared her perspective on location-agnostic pay, why she loves it as a people operations strategy, and why she believes some companies are still reluctant to adopt it internally. 

Leia: What I personally love about location agnostic pay is so simple. It's like you don't have all these formulas, you don't have location factors. You're not trying to proxy cost of living. And that being able to talk about it is really just like where you live does not factor into what you're paid. So you can have multiple people in the same role being paid, the same independent of where they live. Well, because there's a little bit more to that, but it doesn't have it's so much easier to explain and understand than a location based pay structure.

So what's interesting about location, you know, agnostic pay and how it relates to company culture or employee morale is that, you know, that's that's it's a it's a it's a strategy. It's a compensation strategy. And your compensation strategy is just one piece of a bigger picture, whether you choose location agnostic pay or location based pay, it's just really important to have a compensation strategy in the first place because you need something that's consistent and you have to have stuff in place to guard against biased and favoritism. And so, you know, as it relates to culture and morale, I think the most important thing is like you just do the work. You put your stake in the ground. Do you be open and honest about it so people can choose for themselves? And I also think it's not just about pay, right. It's about the intangibles. Too wild. But we have strong principles and values. We have a thirty two hour work week, truly flexible schedules, deep work. And I can't tell you how much having a manager that cares about you as a human being and that's willing to move mountains for you to help you achieve your career goals, you know, matters. That stuff is just as important, if not more important is your total package, you know, and those are the things that actually should help you define what kind of compensation strategy you should have in the first place. You know, you got to look at what you offer in its hole.

You know, I think there are a lot of reasons why companies think location based pay is justifiable. In fact, you see a lot of companies out there talking about it. GitLab, for example, and have them having published their compensation calculator in order to make their pay structure more transparent and more understandable or Buffer that took it one step further and publishes every single individual salaries with names on it. I felt like I was sneaking into somebody's closet and recently I just read a post by Slate CEO on fair pay that I thought was pretty good and wild. But we don't we don't think that you should take a stand against location based pay. And I think all the reason for that is because, you know, in my career, I've learned kind of the hard way that it's not like strategies aren't one size fits all. It's not plug in, plug and play. I, I really take my approach to be objective and analyze all the different reasoning why you might pick one strategy over another. And more importantly, what's the impact those wise and those what flaws are so important? You got to figure out like does it align with your company values? What are you trying to build? Who are you trying to attract or retain? What can you afford? And so what's interesting about this project is in the beginning, I personally wasn't convinced in a location agnostic pay being right for a while. But I had so many questions. I ended up talking to a lot of people, including almost every single person on our team. And I think, in fact, I looked at seven different arguments for and against location agnostic pay, and I took that all that data, plus all my models in order to have a productive conversation with finance and my founder to make a decision. And here we're at.

I think with people going remote, you're remote workers have always just been a canary in the coal mine. And so with this, you know that people going remote and this canary in the coal mine, we've got people exposing kind of what was already there, which is just a confusion and a lack of clarity around how compensation works. And these companies going out there and saying they're going to cut your pay if you move really just in the absence of explaining what their compensation strategy is in the first place, like how could you not fill in the blanks? And thank goodness these companies are putting profits before people and having this reaction. I do really think it is a matter about like how the heck do you communicate where you stand and why you chose that? Not like here's the effect to you. And by the way, pay cuts. Oh, my goodness.

When you're growing, I mean, these hyper-growth companies are growing so fast and you have to prioritize. And so oftentimes the people stuff just isn't prioritized. It's not a matter sometimes it's like that. It's not that they wouldn't do it. It's just that there's this laundry list of things that need to happen now.

Rhys: Leia’s rationale for companies who may not have adopted a location-agnostic pay strategy as of yet makes sense, but it goes to show there’s a strong need for every company to educate themselves on the available options. Finding a solution that works for your team is crucial, and the best way to do this is to do your research, explore and of course, communicate.

For companies that are struggling to determine how to compensate their employees, Leia suggests a simple solution: just ask.

Leia: I think when when wild that started, like a lot of companies, they they just asked people what their salary expectations were and figured out if they could afford it. And it was as simple as that. And at the time, you know, when when they were beginning as a company, I think before postmark, they because of that sort of leaned more towards a location based pay structure. And over time, people did want more clarity around the compensation. They wanted more clarity around their career pathing. And so Natalie realized, like, she needs somebody to come in and help her out with that. So she she found me, someone who enjoys digging into the nitty gritty of that. She's like, I have this vision and like, I have no idea how to execute it. Let's talk. And so what I was able to do is sort of take her vision and pull it down into the tactical and answer all the questions she had because she had a million questions. But really, the idea came from her one day just in our one on one, she's like, so what's up with the same paper, same work thing? How does it work? I have all these things. It's like, OK, I'll look into it. And I like really looked into it and, you know, laid out all the options almost to a point where I think she was like, well, there's a lot of options.

Rhys: So why is location-agnostic pay about more than just compensation? Leia says it’s about helping employees build careers that support their personal goals. 

She mentions the idea of “solving for fulfillment,” which is a great way of changing the narrative to focus on people’s overall health and happiness, rather than just looking after the bottom line.

Leia: The project itself is from a vision perspective, the project itself is not just about location agnostic pay location agnostic pays one pit. One piece of this idea of solving for fulfillment and fulfillment for us doesn't just mean at wild, it means in somebody's life and what they're trying to achieve. And so we have this vision to have these structures in place that help people achieve their goals and its cost structure. Clear, honest, transparent. And then I'm also looking at career pathing, career journeys in a way that just doesn't put you in a box like we have with four different products. We really want people to be able to take, I don't know, do rotations and tours of duty in a sense and try out different things. And sometimes you have a career ladder and it feels like the only way to move is up through that ladder, not laterally trying out different things. And while that is strictly it's sort of been a kind of company that has like a consulting mindset where you kind of pop in and out and people have a lot of wide skills. So we're working on career path. Things are career journeys. And then like, how the heck do you tie that to recognizable titles? Oh, my goodness. But compensation and this sort of freedom to move locations is just one piece of this whole like how do we help our team achieve the things that they want to achieve? It's a big chunk of work.

I mean, outside of researching, I mean, I spent I think I spent nine months on this project, maybe a little shorter, which is usual for a process, but yeah, nine months. And typically this kind of work is done with your career path or your career journeys already defined. And by that time, Natalie and Natalie and I had already decided location agnostic pay. And she she she was like, we're going to give people races. Why not do it now instead of later? Like, tell me was like, seriously, tell me why I need to wait. Can't we just be honest with people and can't we just tell them where we're at. Like it seems like giving people raises is better than like making them wait, wait for one reason or another. And and we and that was that for me was a bit of a personal struggle because I you know, I had heard stories where it's challenging to do it that way. And in fact, it didn't end up being challenging at all. And the end ended up going pretty smoothly. But we definitely had it out. And I think that that was the most interesting, like piece of the the way that we implemented it compared to the way that maybe most other companies might implement it. So I still have this piece that I have to tie up loose ends on the other end.

When you're growing at one of these hyper-growth companies, you're growing really fast. When the team and I began to implement location agnostic pay. In terms of hurdles, one of them was talking to every person on the team. It was quite an undertaking. The reaction of the team was one of the things I was nervous about. We've had three people join since we rolled out the structure. In terms of what's next for a while bit. Sure, maybe something like this project is just one piece of a bigger, bigger. This project is just one piece of a bigger vision, and that's something we're calling solving for fulfillment.

I think the reactions was the things that the thing that I was most nervous about and the thing I was probably most guarding against because having rolled out strategies before, that's the stuff on the other end is the hardest part. I do think by talking with everybody before going into making the decision and being very upfront about like this is what we're doing. This is why we're doing it. We're going to consult you. We're going to get all your perspectives helped smooth out. It was it was one of the smoothest rollouts I think I've ever done. And I think that created a lot of buy in in the beginning when when I talked to the team, I really just learned how much they care about each and every one of each other. It was really important to them that we try to do everything we can to support everyone, especially our global team. So I knew we were already primed in that direction and in fact had all their responses to my arguments to be able to pull it to Natalie so that she can make an opinion on it. And when we rolled it out, generally, the team was just grateful. I personally was moved by stories where we had parents saying we don't have to say no to our kids as much or seeing people talk about their dream of owning a home, being closer than it was before. It's very heartwarming, but that's why you do it. Or like that's why you should do it. Right. The reason why businesses exist is for their human constituents. And so the whole thing should be for how do we bring bring everyone along?

We have had three people, I think join what's amazing about a compensation strategy in general, just period, is that you can you can and should be upfront about what you pay and why you pay that way before asking people to invest so much time into a process. And, gosh, getting to the end and then trying to like penny pinch them down. So what we were able to do is we hired our head of engineering at this time and all of our candidates. We sent them emails saying, hey, this is what we pay, this is why we pay it. We understand that it is what it is. We own it. We own who we are. And we had a lot of positive responses from that, where people were like, this is amazing. And we didn't you know, you didn't have to get to the end where it was this this weird thing. And that happened also with a couple of engineers that we hired as well.

Rhys: Being open and honest about compensation is something most companies today could work on. For years, money talk has been viewed as a taboo in many cultural settings, but it’s time we break down the barriers and start a dialogue where everyone feels comfortable speaking up.

Finally, Leia shared what’s coming down the pipeline for her work at Wildbit, and what she’s enjoying most in her role.

Leia: Well, what's next, can I can I say that we're about to go into a holiday season, is it too soon for that? I know it was. It's a good amount of work. And the past 18 months has been pretty wild ride, especially for people, leaders. You know, I kind of just want to say to all the people, leaders out there, like take time off, like take care of yourself. I'm planning to take some time off. And you have the pieces of this project, of course, going to try to in the process of fleshing out. And then I'm working on a post right now that outlines those arguments and the different responses that I received from the team and the different angles of it. And then I'm looking to do a post on how we actually modeled out what all the different scenarios in order to decide what was affordable and then also what the what our goal would be and what the next milestones are in order to get there.

I think I am most enjoying the thirty two hour workweek. We say thirty two hour work weeks because we really mean it. It's not just four days with 10 hours in it. We recently did a webinar on the topic and we launched a landing page that includes a bunch of other companies that are embracing the four day workweek because there's a lot of people that are starting to realize that knowledge work is way different than manual work and your brain can only be creative during a certain period of time. I think it's like four hours at a time and the ability to recharge actually creates more creativity and more productivity. So we're really excited to see other companies and I think even countries experimenting with this, like didn't I hear Iceland came out to do that? So we're really excited about that. And, you know, for me, thirty two hour work week plus deep work, true deep work, like not deep work in the sense of being distracted all the time. I could not have done this project. I mean, I, I got into the nitty gritty and the nuance of the topic and having a manager that really thought that that was worth my time is a super big deal to me. [00:29:46][68.2]

I personally lean heavily into the flexible schedule, not sure I can speak about everybody else, but I will go really hard for a short period of time and then take a good amount of time off. And I'd like to sort of fluctuate in that way. And I I'll take time off in the middle of the day to go do something. I think when I was interviewing or had a product was like saying to Natalie, Oh, I would never go see a movie in the middle of the day. And she goes, What? Why not? What if you needed to go see a movie in the middle of the day? And he's like, I don't know what you're talking about, really. She's like, yeah, maybe your brain just needs to stop and, like, mull it through. I think we have a lot of, like, processers, like people who process at the company and being able to lean into that flexible but flexible work is a really, really big deal for us.

Rhys: Along with the co-founder of Wildbit, Natalie, Leia has created a location-agnostic compensation strategy that I think a lot of other companies could learn from. As we enter this new world of work, it's important to have these types of conversations and hear perspectives from the companies and the people behind these forward-thinking policies.

Here are a few key takeaways that really resonated with me from the information Leia shared:

  • First, location-agnostic pay strategies aren’t just about how employees are compensated. They’re related to the entire culture a company is building, and the values they’re standing up for as a whole. Paying all employees equally based on their work and experience, not only their location, helps everyone feel supported and understood. I love what Leia said about “solving for fulfillment”—helping people feel satisfied and fulfilled in their career is the ultimate goal at Wildbit, and any strategies they implement are driving towards this aim.
  • Second, like any other strategy, location-agnostic compensation isn’t a one-size-fits-all solution. Before making any hard-and-fast decisions, all companies should take a close look at their values, vision and the kind of company they’re hoping to create so they can make an aligned and intentional choice.
  • And lastly, Leia mentioned that one of the best aspects of location-agnostic pay is that it enables employers to be upfront about payment from the get-go, rather than surprising potential candidates later on down the line. Everyone appreciates honesty and transparency, and a location-agnostic pay model helps to promote these qualities.

Thank you for listening to New World of Work, the podcast exploring the new frontier of the modern workforce through an international lens. We hope this episode served to expand your horizons and open your mind to a new perspective.

Be sure to subscribe, rate and review the podcast so we can reach more listeners.

I’m your host, Rhys Black. See you next time.

Not sure if location-agnostic pay is right for your company? Leia breaks it down on the Wildbit blog.

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About Oyster

Oyster is a distributed HR platform designed to enable visionary HR leaders to find, hire, pay, manage, develop, and take care of a thriving distributed workforce. It lets growing companies give valued international team members the experience they deserve, without the usual headaches or the expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll and great local benefits and perks.

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