As company leaders consider plans to support remote work in a post-COVID world, they’re looking to their peers for insights around making a smooth transition. This is uncharted territory for many. Fortunately, companies like GitLab have paved the way—and documented their journey in their public, internal employee handbook.
One important decision to think through and communicate company-wide is how to pay remote employees. Your employees depend on their compensation to pay their bills and maintain their lifestyle. If compensation might change due to relocation, it’s important to document and communicate that well in advance so employees can plan accordingly.
GitLab is a global, fully remote company that manages remote compensation for hundreds of employees in over 200 regions. Here’s how they do it:
There are a few basic approaches to remote compensation. Some companies use a global rate, where they pay everyone the same—no matter where they’re located. Others create zones to group together geographical areas with similar labor costs. GitLab, like many office-based companies, uses local market compensation, where each employee is compensated based on their area’s cost of market. This allows for:
GitLab uses a compensation calculator that aligns with their “commitment to transparency, sharing, efficiency, directness, and boring solutions.” The calculator is open to everyone, within and outside of GitLab, so candidates and team members can see how different inputs affect compensation.
GitLab takes the following factors into account when targeting for local market compensation:
Then they multiply these factors together to determine each employee’s compensation.
Transparency is a core value at GitLab, and they apply it to compensation in several ways, including:
According to their handbook, “Transparency creates awareness for GitLab, allows us to recruit people that care about our values, gets us more and faster feedback from people outside the company, and makes it easier to collaborate with them. It is also about sharing great software, documentation, examples, lessons, and processes with the whole community and the world in the spirit of open source, which we believe creates more value than it captures.”
A great compensation strategy allows flexibility for necessary changes, and GitLab certainly accounts for that. They run annual compensation cycles, and constantly iterate on their model. Anytime they make a change to their remote pay model, they run an analysis against their current team to understand the impact and get financial approval. It's certainly challenging to manage this level of complexity, and we’re proud to say that Gitlab uses Compaas to make this process manageable at scale.
Want to learn more about managing remote compensation at scale? See more best practices from GitLab.