Compensation
We are entirely bootstrapped, with no outside investors. Our primary source of revenue is billing for our consulting time.
Sustainability of the company is very important to us. We want to bring great people on at reasonable salaries and reward them as aggressively as possible for actual performance.
We may never be able to compete dollar for dollar with other tech companies but we can compete on being a great place to work, with lots of opportunities to learn, and the freedom to define and execute on our own projects.
We have 6 Global Salary Zones in order to create a sustainable and more equitable process as we expand into new locations, and provide transparency for our current team and potential applicants.
You can view all of our salary bands on our website.
Overview of Global Salary Zones & Salary Bands
We use factors for consistency across zones. It simplifies making adjustments to bands in future years. A market factor or role factor could be increased and then that would be applied to all of the impacted bands and zones. Each zone is a factor of the US Market Zone bands.
The market factors are based on the remote market, not the local market. We aim to pay as equitably as possible.
Many countries fall within one zone. Some countries have specific metropolitan areas in different zones due to differences in cost of market. In those cases, anyone whose home address is within a 1 hour commute of that city’s downtown is considered within that metropolitan area for salary purposes. To be considered within a 1 hour commute Google maps must show that someone can travel in 60 minutes or less from their home address to the city's downtown arriving between 8:30 AM - 9:30 AM on a Tuesday morning. If the lower end of the travel time range is 60 minutes or less, this demonstrates that the team member could reasonably work in the city, and therefore, we are competing against that city's market.
Each role is a factor of other roles. The role factors are the same for each zone. For example, regardless of what zone you are in, the midpoint of the Senior Designer/Developer/PM salary bands are 16% higher than the midpoint of the Designer/Developer/PM salary bands.
The factors for technical roles:
- Apprentice - .6
- Designer/Developer/PM - 1
- Senior Designer/Developer/PM - 1.16
- Team Lead - 1.283
- Principal - 1.41
- Director - 1.475
Additionally, the band spread from midpoint is consistent across zones. The band spread from midpoint for technical roles is:
- Apprentice - 0%. All apprentices within the same zone are paid the same salary.
- Designer/Developer/PM - 8%
- Senior Designer/Developer/PM - 8%
- Team Lead - 8%
- Principal - 8%
- Director - 10%
Global Minimum Salary
This structure has allowed us to set a global minimum salary by setting Zone 6: Low Cost of Market Zone at 50% of the US Market Zone salary band midpoints. The global minimum salaries at thoughtbot are now:
- Non-technical roles: $34,145 USD (Coordinator)
- Technical roles: $37,950 USD (Apprentice)
Placement within a Salary Band
We have guidelines used to establish an individual's penetration rate within the band. Focusing on salary rate penetration, instead of raw numbers, allows for more equity between zones.
What is salary penetration rate?
Range penetration is a paymetric that compares the salary an employee is paid to the total pay range for their position. This pay comparison describes how far into the pay range the person’s pay has progressed.
Range penetration = (salary – range minimum) / (range maximum – range minimum)
- 0% = Low-point of band
- 50% = Midpoint of band
- 100% = Highpoint of band
Directors use the guidelines to determine the salary penetration rate for each member of their team. Then the People team approves the salary penetration rate and applies it to the correct salary band to determine compensation.
The salary review is not a negotiation as salary negotiations are well known for leading to inequitable salaries. Additionally we aim to pay folks as fairly and equitably as possible. We do not low-ball offers or raises. If you believe that your band does not reflect the market for similar sized consultancies or that you are not being compensated fairly compared to your peers, please email hr@thoughtbot.com so that we can review the concern. If we determine that there is an issue with a band, we will work to correct everyone in that band, not just the person who raised a concern. We work hard to ensure that someone isn’t receiving more than their colleagues just because they asked.
Guidelines
New Hires in Non-Leadership Roles
- 0 - 25%: Hiring range for a designer, developer or PM who has not reached mid-level in all technical skills.
- 25 - 50%: Hiring range for someone who is mid-level for their role: designer, developer PM, senior designer, senior developer, etc. Or a mid-level + with no consulting experience.
- 50% - 75%: Extensive technical skills or consulting experience. Must have some consulting experience. Expected to be promoted in less than 1 year.
- 75% - 100%: Extensive technical skills and consulting experience. Needs to become familiar with thoughtbot processes. Expected to be promoted in less than 6 months.
New Hires in Leadership roles
- 0 - 25%: Hiring range for someone new to People Management, or managing a team of 2 or fewer employees, or no consulting experience.
- 25 - 50 %: Hiring range for an experienced People Manager, with senior level technical and consulting skills, experience hiring and growing a team. Will be managing more than 2 people at thoughtbot.
- 50 - 75%: Extensive People Management, Technical and consulting experience and skills. Principal level in at least one of those 3 areas.
Salary Review and Promotions
- 0%: Someone who has been in the role a while and having performance issues.
- 0 - 25%: Typical range for someone recently promoted into a role. (Occasionally, there may be a strong case for someone to be further into a band. If you suggest higher for someone newly promoted, please provide an explanation.)
- 0-45% : Working towards being mid-level in all skills required for the role.
- 50%: This person performs at a satisfactory level in all areas of their role. There are still some areas they could grow in, but if they didn't that would be fine too.
- 75% - 100%: This person is on the verge of a promotion. They are excelling in all areas of their role and ready for the next challenge. Clarification for leadership roles:
- Functional Directors: Excelling in all areas of their role. Principal level in People Management.
- Managing Directors: Excelling in all areas of their role. Principal level in People Management. Exceeding targeted PCM.
- Executive team: Excelling in all areas of their role. Principal level in People Management.