The rates people are paid : building a fair retribution system


#1

There are of course lots of things done on a volunteer base around the OFN project. BUT we need also at some point to be able to buy beers :slight_smile:
So we are working on local and global business models, which means enforcing a “platform coop” strategy (every hub using a local common should contribute to it), and a % contribution to global common by local partners and white label users.
But around that, we also work a lot in “projects”, like for example there is a new client who wants to build a markeptlace based on OFN and ask a lot of new features, ask a specific front end, etc. In those case we can build a proposal by setting up a team, and it makes sense to try to gather in that team OFN contributors (like devs who are already doing dev on OFN).

So as we want people to work together in JOY, we also want to make sure the retribution system we adopt is fair for everyone working on an OFN project :slight_smile:

Fair = equal?

What is a fair rate?
I guess a wage is supposed to enable someone to pay for their daily expenses, but those expenses are not the same if you live in London/Paris or in Mumbai or in “La Loupe” (small town in France ;-))
I know @nick told me in UK you had a conversation around rates in that sense.

Should we differentiate the rate depending on roles and experience?

Should dev people be paid more than non-dev people?
Should an OFN junior developer be paid less than an experiences OFN dev?
My opinion on that is that the rate should be a mix of effort and value. Regarding developers I guess a junior dev will do less in the same hour than an experienced OFN dev, so I guess we can recognize that somehow, so that we don’t always work with the same super efficient developers who know very well the code, and empower a distributed team.

How to handle habits regarding rates?

I guess some freelance developers have some usual rates they charge. Should we allow every dev to fix their on price? Or should we collectively say : on OFN projects here are the rates? Those rates could be co-designed and agreed upon by the community, and we could use that as a basis. It can be also a range of rates to leave a bit of margin and ensure a fair system at the same time.

Here is an example of table I wanted to share with you to open up the discussion on the topic
https://docs.google.com/spreadsheets/d/1dGJgoivBFsQ5zWgV7e2wSSmJCjRuWEBGhxrMowS96co/edit?usp=sharing

Ping @Kirsten @serenity @nick @tschumilas @enricostn @emak @pierredelacroix @paco @CynthiaReynolds @sreeharsha (please give us also some tips about usual rates in India, I took India as an example, let me know if you think it’s consistent or not…)
Thanks for your views on that.


Single global dev team: integration process, rules to be certified (and thus paid), and rates
Updating rates to pay people
#2

Is it helpful to develop OFN platform co-op wage rates by pinning them to minimum wage rates around the world. World min wage rates are often given for different juristictions within a country also to reflect regional differences, and these wage rates are collected annually, so we could have annual adjustments accordingly. We could say for example - something like 5 x the minimum wage rate for experienced devs, 4 x for new devs…


#3

Or pin them to living costs per location as this is probably more coupled to the filling of needs for the individual. Once you have a reference budget for one place it’s easy to calculate the budget another place by the cost index.

The wage rates can then be a multiple of this budget per month/year, (and optionally an additional experience/excellence factor).


#4

Additional input from @enricostn https://about.gitlab.com/handbook/people-operations/global-compensation/


#5

risk of minimum wages being some countries / political systems are fairer than others, e.g. USA completely shit and we shouldn’t be pegging to that!


#6

perhaps useful to clarify somewhere that we are talking here about base dev rates. Project management and other overheads (including commons contributions) are likely to / will need to be added in translating these to quotes both internal and to other clients


#7

Yes, please. Dev work is not all the work :muscle:


#8

In my personal opinion all commons contribution tasks (dev, project mgmt, product mgmt etc) are equally important and should be compensated based on the same formula.


#9

Thank you all for bringing this up. Here are some of my thoughts. It’s basically a summary of all the above which means we are on the same page.

  • I like transparency around agreements and rates. It is the first step to fairness.
  • I agree that living costs is a better baseline than minimum wage since minimum wage depends on the political situation. And covering people’s needs is the ultimate goal.
  • I find management, development and testing equally important. They have a similar value even though it’s impossible to know the real value of all the work.
  • I didn’t see anyone mention competitiveness. The higher the rates, the more people are willing to work and the easier we can build our teams.
  • I agree with the low beginner rates that increase with experience. It depends partly on the value of results. But it also acknowledges that we support beginners with knowledge and training without charging for it. It also takes the pressure off beginners to perform like the pros.
  • GitLab’s compensation principles seem to be very close to what we are discussing here:

    Compensation is based on market rate for the region, your job title, and your (expected) level of performance.

Maybe we should start creating a document with our principles like GitLab. It will be easier to discuss specifics. And then we can compare the results of a formula with the real rates we are paying at the moment. The principles document could also contain the groups that support them. Not everybody using OFN has to obey the principles. It’s free.