 Next up we have Konstantin, he is a co-founder of Travis CI and he's going to talk about how he replays salary negotiations with the Sinatra app. Personally, I like apps that does this so we don't have to exercise our developer skills, our social skills. Hello, can you hear me? Yes, this is exactly the motivation behind replacing salary negotiations with the Sinatra app. I also really hate calling people and if there's a ... Anyway, I'm Konstantin, Konstantin Haase on Twitter or RKH Popcorn, these are two of my many Twitter accounts, just RKH on GitHub if you want to, I don't know, tweet at me. Anyway, let me be the first to welcome you all to Singapore. I'm happy to be back and I'm giving a talk. This is the first time I'm giving a really ... I talk about this topic and an important thing about this topic is I have actually no clue. I'm probably one of the least qualified people. I have no real experience as an employee from the salary discussion standpoint and so on. This is actually ... I don't want to say this is a non-technical talk because I actually think it's just ... This is a very technical talk. There will even be code. I promise there will be code in these slides, obviously when talking about salary. Who was here yesterday for Joe's talk, the lightning talk? Yes, so that actually said that salary isn't that important, so this talk did not say that salary isn't that important, it said it's not the reason that people leave. I also think that this talk that I'm giving is not so much about salary but more about development and leadership or rather how we do things at Travis. I think it's an important aspect of that is that I'm trying to break a taboo here, a taboo that people have been breaking previously, very famously with the talk pay hashtag and some news articles and blog posts lately. It is a great taboo to talk about salaries. I don't know how it is in Singapore, I know in Europe and in the US it's not something people generally talk about with their friends, with their colleagues, but it's not just that, it's also not companies, companies I found don't really talk about salaries either. I mentioned there was the talk pay hashtag where people were tweeting their salaries, their job, some details and that gave a lot of momentum to having a conversation about salaries. There's also bots that do that anonymously so you don't need to reveal your salary and there are some companies, a very small number that are aggressively open about their salary structure, most well known probably Buffer who have published their salary formula and not just their formula, they've actually published a complete list with names and everything of all their employees and the salaries they're paying. Buffer also is trying to be a very, very open company about this which is quite impressive. So recently they saw themselves forced to let people go because they couldn't afford from their budget anymore to pay that many salaries which also brings us to one important aspect of this presentation which is looking at salaries from the employer side as well as just what people are making which actually is the side that as a co-founder at Travis I've had to deal with more often than the other side. Well we're actually in a salary and I think that's where one of the major conflicts between employees and employers comes from or the major friction points or interpretation differences is the different view and interpretation of what the meaning of a salary is. Who knows these people? Yes? Yes? Is that a big thing here? In theory? So that's interesting. Let's talk about their salaries. Does anyone know what they make and how they're paid? A lot? Yes? Correct. No, not correct, depends on who you talk about of these five. So they all renegotiated their salaries last year, initially the three main actors renegotiated their salaries to one million per episode. So how do you pronounce it? Gallic Parsons and Cucko playing Lennart Hofstadter, Sheldon Cooper and Penny, last name unknown or at least I don't know, got a deal of one million per episode in August 2015 at a time where Helberg playing Howard Wolowitz and Kunal Nayar playing Rajish were getting paid 100,000 per episode which caused the two to try to renegotiate their salaries and they were aiming for getting salary parity with the other three which was denied to them. They got a raise which is undisclosed at this point which is supposed to be in the mid-six digits but essentially the salary negotiation ended with the studios threatening to write them out of the series. And this makes you wonder, what does this mean? Does this mean that one's a 10x actor? This is a phrase from a very popular especially in the Bay Area, this concept of the 10x developer and this comes from a strong belief in an actually misused word in that context I think, the belief in meritocracy that merit defines your standing in an organization. This rock actually has been changed for one that believes in collaboration so I didn't want to do GitHub shaming or anything but in the Bay Area there is as I said this strong belief in the 10x developer core is a great resource in general on such topics. If you want to learn the difference between a full stack 10x generalist and unicorn programmer there are other like if on this topic 10x engineers there are the really great questions like what do mediocre people do in Silicon Valley, you've got to wonder. Some of the questions are why are the best programmers ten times more productive than mediocre programmers but paid only three times as much. Another interesting question very interesting to me as well is how do bootstrap companies hire talent. I've actually once was asked by someone in a bar like you didn't take VC how do you pay salaries? Anyway nothing against VC just saying there are bootstrap companies and they do pay salaries. I actually work for one of these I actually founded I'm a co-founder of one of these bootstrap companies who here has heard of Travis CI. We bootstrapped found it in 2012 we have 38 employees at the moment that was my last count from Slack this morning. I think we have some top talent we're based in Berlin Germany but we're actually a or try to be a remote first company so we have employees in eight countries of 16 different nationalities also again I tried to count it this morning there might be something of other interesting things to give you a feel we have a 54% women in our company in our engineering team it's 50% it's a one-to-one split with a very wide range of backgrounds and we're actually planning to keep hiring in the future and salaries is an important topic for us from the company perspective salaries currently account for 46% of our spending I think in most companies it's actually higher at least most software companies but our infrastructure costs are also very massive but that on its own makes it the biggest cost center if you just look at it from a budgeting standpoint so any conversation that we have there even if it's just changing it by a small percentage has a big impact on our company finances salaries have actually for a long time been quite a mess at Travis to be honest we started bootstrap we started with not essentially having any money and we started hiring in Europe and specifically mostly in Berlin which by Western standards is a really cheap city and salary was based on so what do you need and that has actually led to once we started hiring overseas for instance a very uneven not well thought out distribution and you essentially got a raise when you said oh money is really tight I need more money but no one ever went like oh you've been here so long great work so we've been having a discussion for quite a while in the company on how to change that and we came to the conclusion and the result is that we got rid of salary negotiations at Travis CI if you want to work at Travis CI if you're going for a job interview we do not negotiate salaries with you instead we have a Sinatra app that will tell us how much we'll pay you why do we believe before I tell you more about this app why do we why are we trying to to get rid of why have we removed negotiations from this process well we think that negotiation skills don't reflect your value to the company which is the employer's approach to to how you decide on salaries if you remember that the three main characters where one point at a salary that was ten times the salary of the other main characters in the Big Bang Theory that was not based on them being ten times better actors this was based on them being ten times more valuable to the production of the show so your negotiation skills are not the main value you provide to the company unless of course you're hired as a negotiator then that's that's a different discussion the employees view on salaries different it's not it can be the value argument can be used in a negotiation or in figuring out if it's appropriate but the employees view is usually in financial needs base and your negotiation skills also don't reflect your financial needs but most importantly as one of our core values at Travis we care about creating a diverse and welcoming working space and we believe that salary negotiations harm underrepresented groups there is lots of evidence for this for instance women people of color generally under represented groups often are impacted from things like imposter syndrome there has been a study for when women and men look at a job at and their five requirements listed and for women one of the most common approaches is like I'm not so sure about this one requirement I'm really bad at this I probably am not a good fit for this up and most men approach it with oh yeah I check of three of the five I can totally do this this is not any individual person this is just a general thing that is more dominant in under represented groups and there's also statistical data to prove the whole thing salary negotiations are very likely to cause pay gaps within your company so these are some of the things we wanted to tackle and we've been working on this for over a year and we call it the Travis CI salary framework we finally rolled out release it this March company internally and this here is the very first time we're actually talking about this publicly so all the things I'm telling you are not really known outside of Travis let's first look at how again how other companies have solved this buffer also has an app I don't actually know if that's Sinatra or not their approach is very very formula based we also have a formula but I get to that in a second you can actually access their app publicly can go to buffer.com slash salary and then you can select role experience location and it will tell you exactly what you would make when you were to join a buffer but let's get back to our our framework so buffer was a big source of inspiration and figuring these out because they also have public explanations of all the things so we developed this framework for a full year and very importantly to how we are Travis approach these things this is a conversation that everyone in the company could take part in so a lot of this was actually discussing aspects of what is a fair salary for instance or what should be in a salary so we decided that we want to pay by value and we want to pay by needs by needs so we want to take both these aspects into account and we also want to come up with generalized rules that apply to everyone and that also everyone could question so in a way you can negotiate salaries but you cannot negotiate your salary you can as an employee at Travis CI say I think this pay difference is too big or we should in general pay higher salaries and then you can give a proper reasoning or we should our increase our salaries because the euro is taking a nose dive because the UK is leaving the EU or something like that but you can say I like to make 500 bucks more month that's not an argument you can use that's a screenshot of our app this is confidential you're the first people seeing this outside of the company let's talk about what goes into this are people taking photos this is being recorded so let's talk about value how do you measure value or how do you quantify what someone provides to the company buffer does that with a factor so they say you have an experience factor of 1.6 or something that is something we we started off with with playing with that but we found really hard to what does that actually mean and then everyone talks about senior developers but senior is such an overloaded term in the industry where there again is a massive mismatch between employers and employees similar to what does a 10x developer actually mean so we instead decided to take an approach where we have levels and then on these levels we have certain expectations that are quite meta that when we have an employee at a certain level we expect them to fulfill these expectations one way or another so if you had the discussion how do you define a 10x developer if they even exist I don't really know how you place them on our levels but let's just pick a level let's pick the the level 10 of our software engineering career path and that has expectation like shows an intuitive grasp of situations analytic approach only use another situations which is basically you see a problem you already know how to fix it without having to analyze all these things it's self-motivated to the point that they create new work for themselves and sometimes others and understands business requirements does not just understand but also shape the big picture so these are very vague and then you're supposed to work with your team lead at Travis CI on a regular basis mostly through one-on-ones setting specific goals for yourself to fulfill and reach the point where these are expectations the company can have to work through we currently have our engineering career path defined up to level 17 we do not have anyone at level 17 the main intention is to show people that there is room to grow while at the same time staying a software engineer and staying at Travis CI because this is actually one thing we see happening in the industry so much that people reach this point where they're senior developer and them what I guess not just about salary this is actually about your professional growth career development and so on and not just about your bank account statement and then you often see one of two things happen either people go to a different company to do something new and fun or people become managers and in both cases you lose your best developers in one case you might swap them out for potentially a bad manager if someone wants to be a manager like I'm not I don't want a bad mouth developers becoming managers like if someone is really passionate about that sure but becoming a manager because it's the next logical step in your career path is a really really bad reason and these levels we've constructed or try to phrase them in a way that employees should level up about once a year so that it's also clear how often people can expect salary raises and most importantly we don't view this as a performance review that you get once a year that we can use to justify to not give people a raise but instead as a program for us to grow people internally if someone does not meet the expectations for the next level that needs an investigation of what's going on is this some productivity issue do we have other problems here that we need to address or are our expectations wrong you do not fix productivity issues by paying people less the other aspect we take into account is needs we use a generalized needs model based on location this was actually a discussion initially where we assume the bigger discussion would be should you pay by location or should you not pay by location actually the opinion at Travis was pretty unanimously that you should pay by location the bigger question was how do you determine that those differences but essentially even if we wanted to not pay by location just pay everyone on level 10 no matter where there are the same salary we could either not afford that or we couldn't hire in California essentially but then we have the goal had the goal that if we pay by location differences we want to be scientific about this we want to be reasonable about this and we don't want to have someone basically get a worse deal because they're in a cheap or an expensive location we don't just want to pay people in San Francisco more than everyone else essentially so how do you do that there's one interesting statistic that's a Big Mac index has anyone heard about the Big Mac index so Big Mac is a great thing because it's in so many countries and it's essentially the same supply chain but it's different cost so you can compare countries based on what the Big Mac costs we do not use this for salary determination by the way it's also it's a bit unfair to have India in there actually because it's chicken meat in India which has a different cost associated there is different conclusions you can draw from this like Big Macs are the most expensive in Switzerland but that doesn't tell you actually much about Switzerland because of your then compare that to or Norway for instance it's the second most expensive it's the cheapest in South Africa but if you compare it to how long it actually takes an average worker to work to get the money for a Big Mac you see that Switzerland is still pretty good and actually Hong Kong is the best way it takes on average 8.7 minutes of work to get a Big Mac whereas in Ukraine in Kiev Ukraine you have to work for almost an hour there actually way better statistics to reason about costs of living one of my favorite is Numbeo which is actually something that we used so we use Numbeo we use the international labor organization we use the Bureau of Labor Statistics and we use shadow stats which is basically going like are those Bureau of Labor statistics statistics aren't actually that great to look at this Numbeo is actually a crowd sourced database that gives you very detailed insight into into living costs for instance for Singapore it uses 6,300 something entries you can see what a McDonald's meal costs as well but also this possible income rent and so on when I when we started investigating I built a little web app where you can basically enter which city you live in where you want to move how much you make and then you can calculate which salary you should aim for when you move there it doesn't work well for Singapore because that data on there is outdated and some models in there are outdated but works quite well if you want to move from San Francisco to Berlin or the other way so say you make 130k in San Francisco means you should aim for somewhere below 60k euros in Berlin if you want to keep the same standard of living that's living costs but also market rates are a big factor as well there there are some websites like Glassdoor where people can can enter their salaries and then it can give you an overview of a location pay scale is similar also really nice to know they have like 5th and 95th percent or I've actually think I think this is 10th and 90th percentile and pay scale has it as well for the US thanks to the open government campaign under the Obama administration you can actually just access the data from all the visa applications so you know what people are getting paid when they get a visa for the US or a green card important here is that you only compare data points from the same source because the visa data points for instance tend to be on the high end of the salary spectrum so you shouldn't use that data paid point on its own but you can use it quite well to compare to cities and the same is true for Glassdoor and pay scale where salaries at least in the US where I can compare it to other sources are more on the lower end so I use that I did a factor that's a comparison between Berlin and that city and created a splatograph of the biggest cities in the world to see a correlation between market rates mark this is market rates compared to Berlin and this is living costs compared to Berlin and you actually see that almost all the cities are in a very nice line you also see that Singapore is quite the outlier so living costs are significantly higher here than in Berlin but salaries are not proportionally higher as well and then besides that what we took into account is I think I'm running bad on time so what we also said or what was more like the conversation went like this so if we take living costs into account and rent and all these things shouldn't we take income tax into account and the conclusion was yes we should but you can't really calculate the income tax for everywhere in the world and then okay that's right and then I spent a weekend playing with some ruby code and turns out you can calculate the living car the income tax for everywhere in the world I created a ruby library you can gem install income tax you can tell it which country you're in it doesn't do tax deductions or anything even though someone emailed me and they want to do like a tax filing program for you I don't know I think they actually never got back to them anyway so you can tell it how much you make or a salary a country and we'll tell you what gross income net income taxes and important for us you can also tell it a net income like the income after taxes and it will give you a gross income interesting things I learned there in Mali you can choose your tax rate basically you go to negotiate your taxes and they go like so we want to pay 3% you want to pay 30% you can also bring a goat and use that as your tax payment and from that we calculate the the salary levels we have a baseline per country that's based on market rates and then a city adjustment for expensive cities that's based on living costs so we do take market rates into account for the US but we don't take market market rates into account for San Francisco but we do take into account that the rent is really high in San Francisco here's actually the code I promise code there's the others it's been cut off the result basically the rounded we have our own rounding method to be more favorable to our employees so it's Texas applied on top of the before taxes we apply of someone's working part-time before Texas is a monthly value times 12 monthly is the the base value plus the increase for the level you're at times the level plus the city adjustment exchange to the local currency yep that's essentially it if we would pay less than zero we just pay zero we don't make people pay and with that we've actually calculated the rates for 3,536 cities in 209 countries for four of these countries we also have 92 regions you might wonder 209 countries there aren't that many countries I recommend to you this YouTube channel I also found myself in that income tax gem to for the first time specify what this gem sees as a country and stating that this is not a political opinion but just trying to model income tax best currencies are very tricky employees that are not in the US or Germany can pick their own currency we have conference allowance converted to the currencies I imported a set a list of currencies with exchange values which I didn't know when importing this currency list included gold so if you work at Travis CI and we pay you in gold you get 4.45 ounces of conference allowance per year I assume this is how you go home and we've wrote this out with you said for all our new hires for to replace salary negotiations we're very happy with it it reflects what we set out to solve we think the rates that come out are competitive based so there are some relation to market rates they're comfortable we think people can live of them they're fair this is has to do with the rules applying to everyone for instance they're feasible they're within the capabilities of our company and their prospective so people know there is a path to take and most importantly I think it's a model that everyone participated in and can participate in shaping how that develops in the future thanks if I don't know if there's time now otherwise hit me up later or treated me email me I also brought stickers thank you Constantine I have no calls about my salary but I absolutely love what you guys are doing at Travis so round of applause and maybe you can set one question can you hear me yep yeah what's your plan for bringing existing employees across to this have you done it or is it going to be a gradual thing so we actually started doing that so we've brought on so all of our engineering team I think is now on the framework so we have this concept of people being on the framework and people being off the framework we started rolling that out we don't have all the career paths done so we have the career paths done for software engineers designers support we're working on our administration career paths right now so that's why not everyone is on this now but the majority of Travis CI is paid in accordance to the salary framework yes so we've actually discussed this releasing this public first of all we want to actually talk more about this blog about this not just to like show off what we did but also to get a conversation started that goes further than just Travis we still need to figure out what work needs to be done so that we can actually release our app which would probably also be quite interesting for people outside yes so this is where do I have to slide currencies are tricky so what we actually have is we have a Travis CI exchange rate which means we picked a change rate at certain points in time and decided that that's the exchange rate we use for the calculation these exchange rates are usually paid at times that are favorable to the person paid in this currency we also update this but this is a semi manual process so we decide to be up the change rate and the reasons there might be extreme changes or we actually plan to review this on approximately every basis if someone thinks the exchange rate is they can go to the currency page in our salary active discuss which will automatically be able to be existing issue about the currency or credit you want and then mention that it's not enough labor what we've also did is that why of course I briefly mentioned people who might be able to choose their currency so we have employees that are not getting paid and what the local currency is and the main reason for choosing that is we have an employee in Mexico the Mexican case so it's really unstable so she chose to get paid in euros instead so that's one approach we also take there. One last short question. Hello okay I have a question that is easy to actually work in business order because I also face some sense for example we have a project that mostly simple we have a project that is the tax rate of different countries in front and the exchange constantly during the rule of the government and I got the application that exchange the tax form every three months for Europe country yes Europe in our tax forms will be my job work. Pass I can't talk to him after during the language sorry. So round of applause.