As a global remote non-profit with a strong social justice commitment, The Engine Room has spent a lot of time thinking (sometimes overthinking!) about how to approach compensation.
Tackling this – even when everyone agreed it was necessary – meant we got challenged as a team about how we were living our values when it came to some of our internal structures. It also meant we got challenged as individuals when we started to see and address how much inequity still lurked in our approach to compensation despite many previous strong efforts to address it. This made for a rocky but ultimately gratifying path.
After a year spent researching potential options, talking to the team and digging deeper into where we had come up short so far, in late 2022 we rolled out a new framework, developed with equity, transparency and intentionality as its driving themes.
Core areas that needed to be addressed included:
- Moving core team members from contractors to employees,
- Ensuring adequate healthcare provision for all team members,
- Revisiting the role of location in determining compensation, and
- Creating clear, consistent salary bands.
Part of what assured we were able to align our compensation framework with our values was that we added this work to our yearly organizational targets. Making it a goal as opposed to something on a task checklist gave it meaning, urgency and importance.
Where we landed – and why
Moving from contractors to employees
Employment is a fairer way to engage a team than contractor status. It’s more secure, it honors the norms of where people live, and it protects both organizations and team members.
That said, it’s also logistically and financially challenging for small global non-profits to have an employee model. TER has team members in 10 countries. To undertake employment on our own would mean navigating the many hurdles of legal requirements, benefits, social contributions, taxes and contracting regulations in each country where we have team members.
Luckily there are strong global EOR (Employer of Record) options. We researched ones that fit our needs and met our digital resilience requirements before we settled on a combination of partners that helped us transition the majority of our team to employee status.
Ensuring access to healthcare for all team members
Covid elevated the need for health benefits in terms of what we value for ourselves and each other. We previously offered a monthly wellness stipend but we hadn’t offered an intentional approach that assured all of our team members had adequate healthcare coverage. Some of our team members lived in countries with socialized medicine, others paid out of pocket for health insurance, and others simply paid directly for medical services.
This meant that even with equity in salaries, we were destined to perpetuate inequity with one of the most important human needs: access to medical care. From the outset we committed to figuring this out.
Much of the solution lay in the change to employment, with additional stipends introduced for those based in areas where employment didn’t include healthcare benefits.
All team members living in countries without guaranteed healthcare now have access to healthcare as a benefit, offered through either country-specific employee status (with an employer contribution), no-cost national healthcare, or as a health insurance reimbursement from TER.
Revisiting the influence of location in determining compensation
Our team is global and our previous calculator set salaries based on location. This meant team members in wealthier nations with higher costs of living earned more. With the pandemic our team moved around a lot and this further complicated setting salaries; in some cases moves entailed raises and in others, cuts.
Based on our commitment to a more collectivist approach and our social justice values, we decided to take location out of the equation.
Our reasoning was that if we wanted to stop perpetuating the differences between the global majority and global minority north, we needed to equalize pay. We started by level-setting salaries based on US standards (as we are officially a New York-based nonprofit) and applied those to our salary bands. We understand that the buying power of our team members in the global majority south is now higher than many team members in the global minority north (though these members still make fair market salaries). And we are good with that. This is part of our definition of equitable and sustainable ecosystems (read more about our thinking on that here: What does it take to fund + build a more equitable tech and human rights ecosystem?).
Creating clear, consistent salary bands
One of the things that was most important to our team was that we create and share salary bands. For us that meant getting clear about what those bands were and then assuring that we had fair and consistent salary ranges associated with them.
A major shift was creating stronger equity among team members across the types of work that we do – research, local community support, larger tech and digital rights projects, admin, etc.
For us, pay equity means that two staff members who do different work of equal value need to be paid the same. Regardless of the type of work a team member is doing, their compensation is the same as others at that level.
Our current structure now has three levels: support, team and director. These bands have a starting salary range for hiring and an ongoing range that allows for growth within bands, as well as a built-in structure to reward longevity at TER.
How did we afford it?
As a small organization wanting to be thoughtful but without a lot of extra financial resources, we used to give a lot of time off (sabbaticals, annual office closures, extended PTO [paid time off]) that went beyond the normal expectations for time off. We also provided wellness benefits to compensate for fewer core benefits.
What we hadn’t done was account for the true cost of this. As we looked for ways to make this financially feasible, the first thing we did was to reduce the PTO to a reasonable amount, and to cut some of the smaller stipends and our sabbatical policy.
While we felt the pain of these adjustments, the team was overwhelmingly supportive of the security of employment and healthcare now available to everyone. We were still able to maintain six weeks of annual PTO and a reduced work week, alongside generous family and health leave. Lastly, we got a lot more transparent about project level budgeting, charge rates and agreements with partners. More on that in another blogpost if there’s interest!
What was hard and what we learned
- There is a lot of compensation information out there in the world to digest and no exact model to replicate. Staying clear and true about our commitment to equity, transparency and intentionality saved us from more than one rabbit hole!
- We had a lot of prior organizational thinking, ideas, tools and conversations to review. This was both helpful and daunting. Once we took a step back and thought about all of that work as background research versus an accumulation of steps we had to implement, we realized that we could create a much simpler – but informed – framework. That was liberating (once we got there!).
- In addition to All-Team calls, we had 1:1 conversations with team members at a couple of junctures to check in. We found that as we made changes for the team as a whole, new things to think about would emerge from these more personal conversations that we could then look for patterns in and refine what we were doing. This kind of work requires a listening ear to what’s important to people individually and collectively. That took different types of conversations.
- Once we had worked out the compensation structure it led us to a whole new set of exciting conversations on team structure, leadership, and how we innovate and create. It also gave us an opportunity to deepen the conversations we were already having around what other equity issues we could examine.
Reach out if you want to talk more – hello@theengineroom.org