The Price of Fair Pay: 7 Questions With Dan Price
Chances are, you have heard of Dan Price.
In April 2015, he made headlines around the world for slashing his own USD1 million salary and setting a USD70,000 minimum wage at his company. Overnight, he profoundly changed the lives of his employees, challenged perceptions about the purpose of business, and drew the admiration of millions and the ire of big-business pundits.
Though largely known for his latest move, Price’s life mission has always been to support the little guy or gal in their pursuit of their business dreams.
In 2004, when he was just 19, Price founded Gravity Payments from his university dorm room. He built the business on the notion of helping independent businesses receive the same advantages as large companies in the credit card-processing industry. At Gravity, Price has fostered a transparent work environment full of engaged employees, all passionately aligned with the company’s mission of putting people and purpose before profit.
Price has been recognized for his leadership and entrepreneurship by “Inc.” and “Entrepreneur” magazines, and was named the National Entrepreneur of the Year by former U.S. President Barack Obama in 2010.
A YPO member in Seattle since 2013, Price will speak at the March 2017 YPO EDGE conference in Vancouver.
- You have inspired other leaders, like Megan Driscoll, to increase their company’s minimum salaries. What is your guidance for other companies that might not be able to offer USD70,000 to employees?
I took the bold action of setting a USD70,000 minimum wage for the Gravity Payments’ team who are the smartest, most engaged workforce I’ve ever seen. They make our clients’ lives easier by being fanatically obsessed with finding savings for our merchants and simplifying credit card processing. The pay increases resulted in delivering even more for our clients. I invite everyone to read more about the service our merchants receive on our blog. For us, paying more resulted in less distraction, greater autonomy and higher capability – all things leading to high levels of engagement, and ultimately better business outcomes. If an organization focuses on paying everybody a living wage, it will have a competitive advantage.
- You have dealt with a lot of skeptics and negative press in the past two years. What is the most difficult part of making such a public, company decision and being the center of a global conversation?
When something is said by a skeptic, we look for insightful parts of what they say about us and use it to improve execution of our plan — it’s motivational. Throughout the media firestorm following the USD70,000 announcement, we stayed focused on the reason I founded Gravity Payments in the first place; to provide a fair and transparent option to independent businesses who are frequently gouged with expensive, confusing fees by an industry fraught with unscrupulous practices. It is gratifying to hear testimonials from our merchants who benefit from this commitment. I’m in this for our clients, and I never want to lose sight of that original vision.
- After the announcement, your company was flooded with resumes. How did you make sure you were hiring the right people and not just those interested in the salary?
After the USD70,000 announcement, I had opportunities to bring on highly qualified, incredibly talented people; real rainmakers. I elected not to hire some of them because the reason they wanted to be here did not align with our culture or our strategy. No matter how tactically gifted someone might be, if they are not aligned with the “why” in their hearts — the reason they come to work — they will create a divide and the company will become worse not better. The key to attracting the best talent is to know what’s important to you, to know who you are and where you want to go as a company. Stay true to that regardless of what opportunities you have to turn down along the way.
- The salary bump has recently been credited for creating a baby boom among your team members. How else has it impacted their lives?
- Our profit nearly doubled and our client attrition rate hit an all-time low. Not only are we able to help more new small business clients than ever, we’re retaining the ones we had at an even higher rate. There are so many merchant success stories, I can’t include them in this brief space but I invite everyone to read about specific industries we’ve helped here.
- The average salary at Gravity increased by 50 percent in the year following the USD70,000 announcement — from USD48,000 to USD72,000.
- Team members significantly cut down on commute time by being able to afford moving closer to the office — we’ve saved a total of 1,560 hours in commute time just in the past year.
- Our team members have also greatly increased their planning for the future, including a 130 percent increase to 401K contributions, buying first homes, marriages and even drastic changes to improve their health. Here’s a link to an infographic that better tells the story of the initial impact of our USD70,000 minimum wage.
- Gravity employees saved up and pitched in for six months to buy you your dream car. Other than increasing everyone’s salaries, how else do you foster your relationship with your team?
Before we do anything at Gravity Payments, we ask “why.” Discovering the “why” has helped shape our company and our values. It also helps us find purpose-driven people; people on a mission. At Gravity Payments, we’re known for saying “you are the CEO of your job.” What’s exciting about that statement is the creativity that comes from it — you define the success and you go after what it means to achieve those goals. And the environment at Gravity Payments respects and rewards that creativity. We’ve also put unique and innovative perks in place to eliminate distractions so our team members feel their job is an extension of their values. It all adds up to a highly collaborative, purpose-driven atmosphere.
- You’re a YPO EDGE 2017 speaker and the theme of this year’s conference is “Sharpen Your Edge.” How do you stay sharp as a business leader?
Supporting our Sales and Merchant Relations teams dedicated to helping independent business owners keeps me sharp by constantly reminding me why I founded Gravity Payments. Most recently, staying sharp has also included working on my book—set to be released soon.
- What one message or lesson you hope other leaders take away from your leadership journey?
Focusing on making ‘screw you money’ will never make your company more competitive or lead to sustainable, long-term success. Leaders who understand this concept have an edge and will ultimately win. I believe you can pay a living wage and see amazing business results. Big picture, I want to see a shift in the focus of business from financial engineering and greed towards solving some of the greatest problems facing society.