In April 2015 I announced that every employee at my credit card processing company, Gravity Payments, would be paid a minimum $70,000 annual salary. The policy quickly made headlines, and, all of a sudden outsiders--many of whom had never heard of Gravity before--started predicting whether the new minimum wage would spell success or failure for the company. Progressives touted it as a new frontier in income equality. Many conservatives described it as blatant socialism. Others simply wondered whether we'd be able to afford such a huge pay increase.
Today, two and a half years later, I can say that the results, while overwhelmingly positive, have also brought about unexpected challenges. The biggest downside to the $70K decision was that it created a misperception about who we are as a company. Our goal is to make credit card processing as cost effective and headache-free as possible for independent businesses, whose profits are often eaten into by the fees big banks and unscrupulous salespeople charge. As a company, our greatest strengths lie in that passionate pursuit, and that is ultimately why people want to work for us. While we want to be a good employer, our team generally values the opportunity to serve more than our pay policies. But because of the media frenzy surrounding those policies, we have become "the $70K company." This brand misalignment has had a negative impact on our company by confusing prospective clients and obscuring our commitment to independent business advocacy. We have had to devote a huge amount of energy to reverse this misperception and communicate what Gravity Payments is really about.
On the other hand, the employees whose salaries rose under the new policy have experienced a noticeable improvement in their quality of life and have been able to do the things they'd previously had to put off for financial reasons. Before the policy change, no more than two Gravity employees per year announced they were having children. After the $70K announcement, 13 Gravity team members--10 of whom were first-time parents--had a baby. It was Gravity's own personal baby boom. Voluntary 401(k) contributions have almost tripled, and while there's no way to measure the exact impact this has had on their lives, it's evident that, by reducing the anxiety inherent in laying a retirement nest egg, our team can now turn their attention toward more fulfilling activities. Finally, an unprecedented number of Gravity team members are buying houses. These are first-time home buyers, many of them Millennials, buying houses in one of the most competitive housing markets in the United States.
All in all, I could not be prouder of the changes that have taken root at our company. We don't know what the future holds, but as long as we keep helping our people create better futures for themselves and their families and create an environment in which they know they are taken care of, I'm confident we can weather any challenges that may come our way.