Seattle-based credit card processing company Gravity Payments

Gravity Payments caters to small and medium-sized businesses

It was six years ago when CEO Dan Price raised the salary of everyone at his Seattle-based credit card processing company Gravity Payments to at least $70,000 a year.

Price slashed his own salary by $1 million to be able to give his employees a pay raise. He was hailed a hero by some and met with predictions of bankruptcy from his critics.

To pay his own bills, Price downsized his life, sold a second home he owned, and tapped into his savings. Some financial experts believe Price’s decision was a big risk.

But that has not happened; instead, the company is thriving.

The extraordinary move gained worldwide recognition, yet Price thought he shouldn’t have gotten that much praise for what he did. Instead, he believes it should be the norm for all businesses and employers.

“Our turnover rate was cut in half, so when you have employees staying twice as long, their knowledge of how to help our customers skyrocketed over time and that’s really what paid for the raise more so than my pay cut,” said Price.

Like many businesses, Gravity’s revenues took a nosedive in the first two months of the pandemic losing 55% of its business in 2020. At one point, Price figured Gravity was only four months away from failing but his 235 employees in both Seattle and the new office in Boise came together with an excellent solution.

“They came back to me and said, why don’t we see what every individual on the team can do in terms of working extra hours and volunteering for a pay cut,” Price said.

The CEO was blown away by his team’s response. Ten of his employees elected to receive no pay at all. Two to three dozen employees volunteered to slash over 50% of their salary.

In total, 98% of Gravity staff participated in the pay cut, giving up a total of $750,000 in wages. To help his employees, Price also cut his salary to zero during this tough time.

Because of their collective sacrifice, the company went from losing a million and a half dollars a month to losing only half a million dollars.

If it weren’t for his team’s effort, the company would have been forced to lay off employees or raise fees by $20 per client to earn the additional $400,000 the company needed.

However, Price didn’t want to do that knowing that most of their patrons are small business owners who surely took a hit during this pandemic.

“I’m sure it would be a big loss of trust if we, suddenly, decided to do layoffs. It would undercut exactly the heart of how the company is supposed to work,” he said. “This company has always been about sticking up for people over money, over greed, over corporations.”

Gravity is getting back on track by helping their clients do the same. Aside from significantly reduced salaries, his staff also doubled their productivity and worked more hours than required to serve their growing number of clients. Some employees also volunteered to do during the weekends.

This is what happens when a company takes good care of its employees.

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