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January 31, 2023

How Would Salary Transparency Go Over at Accounting Firms?

In case you're new round these parts, compensation is a popular topic of conversation.

In case you're new round these parts, compensation is a popular topic of conversation.

What we've managed to do is to give people a place where they can talk openly about their pay, whether they think it's fair and to stay informed about what other jobs offer.

But what if your employer did that? I stumbled across this old Fast Company post about a startup called Buffer that discloses all its salaries and the formulas behind them:

[T]he formula is composed of job types, seniority, experience, location, and equity. That translates into figures: The results, then, are totally open: CEO Joel Gascoigne makes $158,800, [CMO Leo] Widrich makes $146,800, CTO Sunil Sadasivan makes $137,600. 

Okay, first of all, this would be possible at an accounting firm. But why would a company want to do this? Buffer says that it discloses all this info because it "breeds trust amongst all people involved" which, okay, maybe, but I think this reasoning is far more interesting:

"For certain areas, companies operate in a vacuum, without any feedback or discussion," Widrich says. "[By] sharing with the whole world how we compensate our team members, we're getting an incredible amount of feedback from others, that helps us get to the next level, improve the formula and do an even better job compensating our team in a fair and beneficial way."

Some firms, to an extent, have tried to do this. We covered PwC's change to its comp structure several years ago and have kept up with KPMG's Early Career Investment Bonus Program but I can't recall anything that comes close to the universal compensation disclosure that invites meticulous feedback like what's being described at Buffer. It's pretty hard, actually, to imagine having access to the salaries, bonuses and other compensation data for everyone in your firm. Would you want that?

On the surface, it might sound like a universally horrible idea, what with the mutinies and all. But, at the very least, it would root out pay gaps between men and women and maybe even minorities. And it could help explain why recruits with master's degrees are paid virtually the same as those without them. As a master's degree holder, that always bugged the shit out of me.

And I have no doubt it would force a firm to get more serious about ensuring that everyone is adequately compensated for their education and skills, but would knowing what your co-workers earn really cause you to trust them more? Would it make you more honest and productive (another claim Buffer makes)?

Don't worry, I haven't lost my marbles. It'll be a chilly day in hell when an accounting firm discloses the salaries for all its employees and partners. But maybe some burgeoning firm that's eager to challenge people on how they think about compensation would give this a shot. If you started a firm, would you consider it? If so, how do you think would go over? If you were an employee, would you want that level of transparency? Is there anything that firms can actually do to make compensation more transparent? Discuss.

Why This Startup Made Their Salaries Radically Transparent [FC]

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