We pay at the top 10% of San Francisco market rates for salary + bonus (but not stock options) at Basecamp. Those rates apply to everyone here, regardless of the role or where they actually live. We don’t even employ anyone who live in San Francisco!
We picked San Francisco as our benchmark because it’s the highest in the world for technology, and because we could afford it, after carefully growing a profitable software business for 15 years.
For programmers, designers, operations, administration, and the vast majority of other roles at Basecamp, simply following the top of the market rates is a pretty sweet deal: High salaries, benchmarked against the top market, yet most people live in places with far lower cost of living, which means we’re even more competitive in local markets.
(While we might be top 10% for San Francisco, I’m pretty sure we’re in the top 1% for, say, Fenwick, Ontario or Spokane, Washington or Madrid, Spain.)
But where this doesn’t work as well is when the San Francisco market rates reflect how technology hasn’t really raised all boats. While the rates there for programmers and designers are far higher than many other places, this is a lot less true for, say, customer support or other roles that hasn’t seen the same market competition.
So while we’ve been mechanically following the market rates for the majority of positions at Basecamp, we’re breaking the peg for those that weren’t seeing a big benefit. Where before we’d have roles that started in the $50,000s, our new minimum wage at Basecamp is now $70,000, regardless of what the benchmarks say.
This means that even if you start in an entry-level position, like junior customer support, the starting salary is $70,000 right off the bat. Again, no matter whether you live in a high cost of living area or not. You decide where to live, and the pay stays the same.
Calling $70,000/year “minimum pay” might strike some as odd. It’s well in excess of what’s the “minimum required to live” (at least in most places!), which is a driving force behind the larger debate of equating minimum wage with a livable wage. Instead, we’re choosing to link “minimum pay” not simply with what’s the least we can get away with, but rather as literally just the lowest pay that we offer at Basecamp.
This new floor also means that the entire salary range at Basecamp is now around 5x. The highest paid employee is paid around five times more than the lowest paid employee. Compared to the companies we normally benchmark ourselves against as part of that top-10% SF target, that’s probably looking a fair bit more egalitarian.
We’re not a big company at Basecamp. Just over 50 people. We can’t fix all the problems in technology, whether around pay or otherwise. But we can set one example, and hope to inspire other likeminded companies to consider their policies and practices from a different angle. Like having the pay range of the entire company, not just the most sought-after positions, feel the rising wealth of technology.
Just remember to go at your speed. Basecamp wasn’t paying these top end salaries when we started. Or even after we’d been around for five years. We do it because it’s possible now. Not because we’re putting ourselves in a bind trying to keep up with Mr Venture and Mrs Capital.
(We don’t hire very often, but when we do, the postings are announced on our Basecamp Job Openings mailing list.)