Open Salaries: Ensuring Equitable Pay Through Pay Transparency

[Music] thank you I know this is a topic that can be a little bit weird or maybe a little bit uncomfortable but hopefully we can dispel that over the next 30 minutes or so so first off I want to give a brief introduction on who I am so I'm at chin Berry I'm the CEO and one of the co-founders of lightforge games where a new video game startup about three years old now and we've been following Open salary since the very beginning prior to that I spent about 10 years at blizzard as a programmer working on Starcraft 2 and Heroes of the Storm and then I switched over to Epic where I ultimately became the director of UI on fortnite and in early 2020 right before the pandemic I co-founded uh I left epic and co-founded lightforge games uh with a couple other folks and here we are today so why are we here today well first off

the goal here is not to convince you all to go home and enact Open salary right away right um really today is about planting a seed right I know when I was first introduced this idea I thought it was absolutely Bonkers and you know I thought that there's probably all sorts of unintended side effects and downsides and things like that but after three years of open salaries and reaching almost 40 employees I can unequivocally say that for us at lightforge it's been a really big success so the actual goal today is to provide you all with the information you need to start your journey on open salaries and we're gonna do that in three ways first I'm going to provide the initial thought process that we went through um for why we enacted open salaries and some of the supporting research behind it I'll also provide a logistical blueprint for implementation basically How We Do It and finally I'll provide a bunch of the benefits and challenges that we've all learned on our journey over the last couple years with maybe a little touch of soapboxing

periodically because let's be honest we can all do better right all right so in order to really begin we need to have a shared definition on what Open salary is so open salary is a policy where management publishes full compensation information for all employees to all employees and that includes the names titles levels and any other contributing factors that go into it and this is specific actual hard numbers too not ranges and this is all forms of compensation including yes bonuses and Equity as well so essentially this is your HR nightmare scenario where someone takes all a payroll and emails it to the entire company and it's doing it intentionally so why on Earth would anyone do that let's go on that Journey so when we first formed lightforge games we were um like a lot of startups uh we were we wanted to be really values driven organization right and so in our very first uh meeting of co-founders we talked about things like core values and

who did we want to be when we grew up and so that led us to the question of what does the workplace look like in the year 2025 2030 2040 right what can we do differently as a company born in the year 2020 and so if a company is really nothing more than a group of people on the same Mission we looked at the people right and it's a really easy projection to make when you're looking through the generational lens which broad Strokes I know but uh already today Millennials are over 40. hell I'm a millennial and I turn 40 in May this means people with 10 to 20 years experience are typically made up of people in the millennial generation today and that's your leads and your directors and people starting companies also gen Z has graduated the upper range of gen Z is 26 years old uh that means that pretty soon they're going to be seniors they're going to be leading departments at big companies very soon and these aren't small Generations either these two generations combined equal 46 percent of the full-time Workforce in the United States and this is the general Workforce we have reason to believe that the video game industry

probably skews younger so why is this all important it's important because researchers commonly use the generational lens uh when uh trying to find what trends to expect and one of the biggest workplace Trends is that younger workers are placing a strong emphasis on corporate responsibility and transparency in a study by Gallup in 2021 they wanted to find the answer to the question what are employees looking for in their employer and Millennials and gen Z together had the exact same response for number one they want an organization who cares about their employees well-being right that's the number one concern that they have by the way that's not just for young people Gen X and Baby Boomers have that as a top three concern as well number two between Millennials and gen Z is also shared the organization's leadership is ethical the only difference really is at number three were older Millennials those born before 1988 uh want an organization whose leadership is open and transparent and young younger Millennials in gen Z want an organization that is diverse and inclusive of all people as remember three concern so put this all together half of employees expect a diverse Workforce

with ethical transparent leaders that care about their well-being Gallup goes on to make a recommendation in the study based on this information they write if your organization has not addressed the above items well-being ethical and transparent leadership and diversity Equity inclusion recently it's time to start having those conversations uh with your leadership team these aren't just topics for young people and this all combines with a deep distrust younger people have in institutions right especially financial institutions like housing Education Health Care and employment in a Washington Post article titled there's still a taboo on discussing salaries but Millennials are breaking it Jake Rosenfeld professor of Sociology at Washington University and author of you're paid what you're worth and other myths which I love that title he writes the oldest Millennials began their careers too late to enjoy the the late 1990s economic expansion and instead saw their incomes fall during the Lost decade of the odds quick side note that happened to me at that same time while I was at blizzard I saw my final take home drop three years in a row and I was promoted one of those years

the youngest meanwhile finished schooling and embarked on careers during the onset of the Great Recession with many struggling to gain a firm grip on a middle-class lifestyle during the uneven and prolonged recovery where else do you see this social media the anti-work and work reform subreddits hit the front page of Reddit every single day these are the discussions that young people are having these are our memes I think I can still say we right the the the great resignation and quiet quitting are also showing that people are making employment decisions based on this distrust so as employers it's really important for us to recognize that this is the environment that we're operating within we can ring our hands our yellow clouds all that we want but it'd be foolish to ignore the lived experiences of half the workforce so remember how gen Z and Millennials place dni as their number three at Job expectation well it turns out that uh Open salary is highly related to equitability in the workplace in a New York Times article titled want to close the pay Gap paid transparency will help which is a pretty on the nose title Marilla Hernandez associate

professor at The Darden School of Business rights by keeping compensation secret we might obscure our structural inequalities and enable inequalities to persist she goes on to write that even well-meaning employers can hide structural inequalities even from themselves so essentially when your company's policy is that of pay secrecy rather than pay transparency neither the employees nor management have the full information to fight structural inequalities payscale took this a step further and they compared the actual pay to transparency levels across 1.6 million people and as you can see from the from the bar graph here there's a clear correlation between paid transparency and pay equity in fact in the same study they concluded that transparent pay policies completely close the gender wage Gap in a New York Daily News opinion piece titled pay Equity begins with paid transparency Beverly Cooper neufeld president of power her New York and Sayer kawaja senior attorney at legal momentum right with salary ranges out in the open employers must think critically about how they set pay at the front end of the process before they answer

unconscious biases remember that we're gonna come back that quote in a minute right employers must think critically about how they set pay at the front end of the process at the same time women and people of color have more leverage to advocate for themselves and more information to make better decisions about jobs and industries to pursue helping to combat occupational segregation in short this is the most effective tool that we know of to fight wage gaps so for my first soapbox challenge if you're committed if you say you're committed to creating a fair and Equitable workplace for all why wouldn't you use the most effective tool we have available and so given all these Trends and expectations right um it's bound to arrive at some point right well as you can see from the spoiler title there it's already here it's been a lot written in the US press about how New York City California and Washington State uh now have laws where all job postings must contain salary ranges so in case you weren't aware if you operate in any of those regions and you post a job posting you need to have actual pay ranges in your job posting

and not these like 50 000 to 2 million dollar ranges either like real actual salary ranges in August of last year the European Union's paid transparency act went into effect putting the same requirement for all companies within the European Union across industry it's a growing Trend as well Whole Foods has been famously Open salary since 1986 and they managed to maintain it through their acquisition with Amazon even Starbucks uh they have paid transparency as part of their stated uh uh commitment to pay equity and the social media firm uh buffer um they've they're really vocal online about their pay transparency policies they've got a ton of information online about like practical kickstarts the research they've done all this kind of stuff in fact that's where we got a lot of our information and inspiration from as well and more importantly in video games it's already here as well last year in an article in Bloomberg Jason schreier wrote about how we at lightforge along with the Studio's Gardens and disbelief are all following radical paid transparency policies well in fact last year I was at a conference in September and um we realized that people sitting

at the table represented seven video game startups four of which had some form of Open salary going on so the main message here is paid transparency is here and the momentum is only growing so for my next soapbox challenge given how much employees are demanding this are you prepared to compete with companies who are practicing open salaries all right so that's the case for the why what about the how well the house is actually really easy right all you have to do is open up that salary spreadsheet you already have I know you have one right so all you do is just open up read access here's how we do it so at lightforge every employee has read access to our salary spreadsheet and this is the actual sheet right there's no other source of truth right it's not there's a secret one for management that we get to see too right like this is the one sheet to rule them all we make sure it's clearly accessible in notion right this isn't something we have to jump through hoops or ask for permission to see like right that's a big link right there on the front page of the HR section in notion

we also make it a part of orientation as well so in that same checklist that's like download this piece of software install this thing whatever one of the items is here's the salary sheet day one go go look at it it's right there book Market whatever you want to do and this is what they see right so I'm using made up data here which I get the irony on but uh some companies choose to publish their full salary information publicly we've chosen not to do that because sadly we're in an industry with the history of harassment however this is the exact same format of information that people would see right and so of course you've got your basic information like name title and start date you've also got your base salary as well the base salary there if you look to the right now roll family job level and step those are what feed into what someone's base salary is we then have a column for any adjustments that we might apply to someone's salary and then the final salary and that bolded column there that's that's important that's the actual final salary that's the same number we put into the payroll system and then right next to that too the stock incentive plan Equity that is the

actual number of shares as well because again if Equity is a form of compensation share that as well so remember that quote I mentioned a little bit ago um about how uh you need to pay transparency forces companies to think about pay at the front end of the process um well we learned that lesson really quickly so we um we always started as open Open salary company but we didn't have a standardized pay system at first and so what that meant was that for the first year as we were constructing offers uh we had to you know kind of ad hoc put together an offer that we thought was fair uh based on someone's experience level or Market rates or things like that and we learned really quickly that's really hard to do first off it's inefficient it's also really hard to do in front of an audience um so what did we do we copied from buffer um it's cool they encourage it so what they have is they've got a full system for a roll family which is something like programmer designer Etc level which is you know junior mid-level senior and

then step step is basically a more granular form of level that helps kind of allow people to still go up in their career in more granular steps and at each of those steps we list out this specific job expectations and what the responsibilities are for each of those and importantly what the salary is and so what that ultimately is it's a rubric of job expectations with the actual salary information associated with it and so the uh so that means that conversations for hiring and promotions and things like that can be done entirely around level and not around pay so it's not like someone's better at negotiating or you know someone asks for more it's all around you know what are the job expectations are they meeting the job expectations do we expect that they would or not right and this last point is important too that the standard standardization system isn't about flattening pay right we don't have flat pay we've got a 3.1 X from our lowest paid employee to our highest paid employee right um it's about uh having clear expectations and Clarity around what those uh how those those salaries are

calculated um and so uh it's it's really important for us that you know people can look at the job expectations you know understand what that is and understand what the pay is for each of those steps all right so let's talk about some of the uh the pros and cons so um first off we've noticed that we've had a massive Boon in recruiting thanks to our Open salary policy uh we were recently told by our external recruiter lfm Talent uh that we smashed one of their records uh for uh interested rate so interested rate is essentially when they send it send out a bunch of cold emails how many people write back that they're interested in learning more right typically for a company like us kind of an unknown company and a role like this game designer uh we would expect to see a five percent interested rate what we got instead was like 28 interested rate like nearly 6X increase on top of what they would expect and what we found out when we had follow-up conversations with folks was that our Open salary policy and our values uh were nearly universally stated is why they wanted to learn more and this continues through to hiring as

well nearly everybody's States during orientation when we talk about Open salary they stop me and they say by the way the Open salary policy was one of the major contributing factors for why I accepted the position in the first place and this builds trust immediately in the process as well um you know we've got all over our website and always in the first uh screen with uh when recruiting we always talk about our Open salary policy and how it works because it's a little bit weird when people to you know feel comfortable with it and commonly we hear from folks from marginalized backgrounds that they express relief and gratitude that this is uh that this is what the policy is and so we believe this has also led to a higher rate of women applying uh fighting that old meme of we'd love to hire more ex but they're just not applying and we know that's the case because in our diversity and hiring report last year uh we found that 42 of all applicants identified as women transgendered non-binary or other so bottom line is we're getting a larger more trusting and more diverse hiring pool thanks to our Open salary policy but what about the highest paid employees right a common skepticism I hear when when chatting with folks is oh

yeah I'm sure this is great but you know the highest paid employees you know maybe you're gonna have trouble with them because uh their salaries are going to be depressed or maybe it'll make others feel bad if they can see their salaries or maybe they won't want to share they'll be embarrassed they don't want to you know share their paid so uh so highly well in our experience so far this hasn't been the case uh first off I've already talked about salary we don't depress salaries right we just justify uh why someone's making a particular amount and we're okay with the fact that there's market rate information that experiences a factor things like that in terms of others feeling bad again this hasn't been the case for us either when I talk to folks that are more Junior about their feelings around the Open salary policy what we typically hear is appreciation that they have Clarity in what their career path is right they can look at the the different job expectations understand what the responsibilities are and then see what the compensation is associated with it they can even see other people to kind of get a bit of a grounding of oh that's what it means to be a senior or whatever it is right and I know when I started my career that was always a black box to me I had no idea what it meant to be to be promoted you know it's just like do more

better I guess right and then when you get when you when you do get that promotion and you get that that you know number going up like you have no idea was that a good amount was that a really good amount are they super happy with me well you know was it a bad amount no idea right it's complete Black Box so they Express gratitude in having that Clarity and what that career path looks like and then finally in terms of not wanting to share again we haven't seen that when I talk to Folks at the higher end of the salary range uh What I Hear instead is that they really appreciate um being a a part of the solution like they want to be a part of a more Equitable company and so they're happy to do that and I get it we're going to have a self-selection bias our website's all like empathy and rainbows and you know certainly we're searching for people who our values aligned with us but remember uh corporate responsibility caring for employees ethical leadership and transparency are top expectations for all people not just the beneficiaries of Any Given policy we've also seen a huge benefit on accountability as well so employees look out for each other not just for themselves and this gives us higher confidence in

the decisions that we're making and how we're making it in fact we had an employee once identify a clerical issue in their own compensation and they wouldn't have been able to do it by the nature of this error without being able to compare to others and so what could have been like a real nightmare to roll back and a complete breakdown in trust ended up being a celebration of our policies and an increasing in Trust and so we expect to have these open conversations in fact we charge the team with having these these open conversations uh during orientation when we get to the section of Open salary uh you know I always say to everyone look along with our Open salary policy all we're asking for is that if you have any concerns about your compensation or anyone else's we just have an open conversation about it and this this really helps fight those narratives and conjecture that are only natural it's human nature to look around and wonder what your neighbor's getting and make up stories and you know and and these kinds of things and so um what we find is with our Open salary policy people have the information they need to not fill in the gaps with made-up information so for my next soapbox challenge

if you believe that you're making good choices on compensation why wouldn't you want to combat conjecture and made up narratives of actual facts so let's talk about the challenges so the first challenge is hard conversations um it is uh without question that open salary definitely forces you to have more hard conversations in particular we sometimes have to have these really awkward comparative conversations with people in the room right so we're having a hiring discussion which we actually do open doors so anyone logged into our Virtual Office can can listen in as well but sometimes we have to say something like hey you person in the room do you think this person is a higher level or lower level than you uh and then of course that's really just a proxy for do you think this person should make more money or less money than you right but these are important conversations to have to ensure that we are being fair and so we I get it that you know there's these culturally baked in Hang-Ups around around talking about compensation um but we try to normalize it as much as

possible by just having the conversations more often and just just talking it out finally the other thing that's really hard with conversations is this idea of negotiation versus job level right I mentioned before about how our job level system meant that we could talk about things like job expectations and responsibilities and things like that but the honest truth is it's really hard to objectively know if someone's like a 3.2 or a 3.3 just from a couple hours of interview in a way that makes it feel really good that oh yeah we're definitely 100 objective and I think if we're really really honest with ourselves there's been a couple conversations that we really were probably having a negotiation conversation and just using job level as a proxy to that but the only Solace that we do have is that because we do have to justify and share the reasoning with the entire team and because they will see the results it sets a certain bar that we still have to meet even if we really want to land a candidate and the confidence and the accountability that if we do get something wrong the team will let us know about it but isn't that the point right the whole point of Open salary the whole point of this is to have hard conversations and

and if you're not having hard conversations around compensation and level and if you're not fully justifying and defending your decisions what are you even doing and lastly I want to talk about the the challenge of transition right so we've been open salary from the very beginning and I definitely 100 acknowledge how hard it would be to transition a company from pay secrecy to pay transparency right and the honest truth is I have zero experience doing it but what I can offer you being on the other side of the fence here is this thought exercise right so imagine that HR nightmare scenario right imagine someone leaks all of payroll to your entire company what scares you about that is it some unfair pay someone getting paid more or less than they should be getting paid is it an underpaid High performer that you've got someone who's really really awesome who's just not asking for more are you afraid of maybe despite your best effort there might actually be some accidental inequities in there that someone wants to can run some numbers or run some math against the numbers that might expose that well why aren't you doing something about it

if you currently have compensation issues that you wouldn't want people to know why aren't you fixing those issues now they're not as secret as you think people talk right so so fix those issues now all right so let's talk about next steps right let's say you listen to this talk and you're you're all in you totally believe me you got to do Open salary right what should you do well if you're a decision maker start with some further reading go to buffer Buffer's website has a ton of information right there's uh you know a practical Kickstart the research of them doing it over the last seven or eight years and you know the the that um job expectation Matrix that I mentioned before a ton of information on there start there also reach out to me um I'm gonna um uh be in the Overlook area after this I'm happy to take more questions and you know talk through concerns people have things like that but also find me on LinkedIn and like reach out to me seriously I view this as an important mission for the for the industry and I'm really happy to take time to answer questions and talk through people's concerns and finally think of this like a journey

right I would never recommend that someone comes to a 30-minute talk and goes home and switches flips a switch on something like this right um it's way too important so think of it like a journey take baby steps so you know learn talk reflect share post salary ranges you probably have to anyway right run that thought exercise that we just did before run it in a serious way find those things that scare you and then fix them and slowly expand access as well right you know right now it's probably just HR right upper management that has access to this but what if all your directors had access what if all your leads had access right slowly expand that access until everyone has access and if you're a team member what can you do well start by educating yourself uh your peers HR CEO anyone else uh who has uh that you have access to connect this to your company's Deni efforts hold them accountable for the nice words they have on their website and if your company has ergs I bet they'd be real interested in anything that would help fight the wage gaps maybe a bit spicier learn your rights

so I am not a lawyer do not get legal advice from video game programmers but under the National Labor Relations Act employees have the right to communicate with other employees at their workplace about their wages I pulled that quote from their website so I didn't get it wrong so that's that's how it works right so review your rights talk to a lawyer if necessary but start a conversation right make both the ethical and the business cases for uh for Open salary I genuinely believe that this is something that's better for both the employees and the employers at the same time so make it happen all right so that's uh end of my talk here that's all time I've got but thank you so much for coming to this thank you and yeah in case you couldn't tell I genuinely believe that open salaries are a key ingredient to creating a more fair and Equitable workplace in our industry so I'm super glad to be able to share this uh we've got a few more minutes so people did

want to line up for questions we've got some mics on either side there hi good afternoon thank you so much for the presentation and um it's a two-part question sure so the first part is how do you um how do you address independent contractors and Freelancers and adjust for original differences and the second part is um in the presentation you mentioned that you don't post this publicly because of harassment can you clarify that further uh yeah I'll take that one first um so we're a small company right um and so there's 38 employees right now if we were to post everyone's name and salary online which is what some companies do um the fear is that in the video game industry that would attract some unwanted attention and things like that to our employees and we felt that that was going too far in um kind of violating or exposing their privacy and so we view this as a company secret we get to know about it um but not outside folks uh in terms of contractors and things like that um for the companies that we have or

company contractors we typically are pretty open in general so folks do have Acts access to seeing how much we're paying for various contractors for independent contractors I we probably have that information we just don't really expose it all that much like people can probably find it if they wanted to but we don't make a big deal about that they're not employees I don't really want to necessarily put them under the same uh like they didn't necessarily agree to the same level of uh joining as employees have uh yeah hi it was very stimulating um first question is how do you manage the retention rates so to people same levels same salary one has a better offer negotiates something higher yeah but everyone knows yeah that's right so what happens right so uh in a case like that um what we what we say is that market rate can absolutely play a role in someone's salary right and if people are getting actual offers that's a pretty clear indication of what the market is willing to Bear right and so for a single individual if something like that

happened and we look at that we're like you know what that does seem like this is a trend this is what the market rates are we would actually bump it up for the the job level itself and then everyone who's in that same role family would actually get a bump to go with it um and we did that once in 2022 uh when kind of the Fang companies were just going wild with Engineers we made an adjustment we didn't go to the Bonkers levels that they're doing but we were seeing that in general engineering salaries had gone up a bunch and so we adjusted it across the board for everyone so basically your reaction is when there is a an evident Trend to raise everyone's salary accordingly is this correct yeah that's correct and I don't know that one data point would necessarily be a trend but it might inform information uh Fortune we do use also um uh what's it called the there's a company we use also for um uh salary information as well um yeah I didn't hear what it was but there's a couple different ones right um and so we use one of those as well to help inform Market information okay thanks yeah yeah I just want to be uh like maybe the terrible person in the room but if you can answer this question I think it might convince you know a lot of other Founders or people with uh in similar

situations so I was given a budget to hire uh you know a few people on our team or a very small company 10 people um I had about 110k for one person and we interviewed uh a really good candidate he was a Chinese immigrant and he asked for 50k so I'm now in a situation where I've got a guy who's willing to take 50k we didn't do transparent salaries we actually did hire him um and I now have 60k where we we could hire you know like a contractor or somebody overseas there's a huge incentive like we're trying you know we're under crunch time we're trying to release games we're trying to get things out we're trying to make money we're a small company like like on one hand like you want to do the right thing you want you want to make sure everybody's you know adequately equipped with you know what they need to live but on the other hand like that's that's 60k that can definitely change both myself and the company yeah how do you how do you deal with like the reality of your bottom line versus doing the right thing yeah absolutely I mean all this is about is being able to to defend the choices that you make right this isn't about trying to force you know everyone's got to pay a bunch more or things like that it's really about

defending we've actually uh as part of our system I didn't have time to get into it we do actually have exceptions uh that we codify right and so for us what an exception is is that someone brings something to the table for example that you wouldn't have expected like an animator who can program and it's valuable and there's a reason why you want it right um we can make an exception to change their salary at a discretionary level but we will uh document that there's a adjustment that happened here and here's the reason why and we did something like that exactly once and the team was really excited about it right so in a case like like what you're talking about if you can defend the choice of why you're making it um and make it clear to everyone this is why you made the choice um that would be the the you know bias that I would have for how to address that hello um you did kind of touch on something that I was going to ask with one of the questions but uh we can talk about the game industry all we want but we are a a piece of the larger pie with say like military simulation and film and all that how does this sort of transparency work when

you're dealing with say like a game animator role versus like oh here's the transparency on the film animator role and like how does that sort of work when you're not only like talking about what you would pay for a programmer for games versus a programmer for like a like AMD or something right I mean these are all factors that go into things like what what the market rates are right the traditional answer for why do back-end engineers get paid the most is because Facebook and other companies will also pay them right but they're not necessarily looking for a gameplay programmer so again it's all about the the justification and actually doing the homework and being upfront and and explaining to folks like this is why certain choices are being made and so that in that case if different roles are you know need to be paid higher for various Market reasons we just we just tell people that's it so uh super sorry I was just flagged down that we got to stop but I am going to take more questions um and uh we'll head out uh over to the Overlook so thank you everyone [Applause]

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