“Today we are investing in each and every one of you for the long term,” announces the Microsoft boss.
(Photo: imago/Hindustan Times)
Dusseldorf On Monday morning, Microsoft boss Satya Nadella addressed his workforce directly. “Time and time again we see that our talents are in high demand,” the manager wrote in an email, praising employees for their “admirable” work. “That’s why we’re making long-term investments in each and every one of you today,” it said.
Translated, that means: Microsoft employees are being enticed away by the competition – and the top management reacts with a significant increase in wages. The company is nearly doubling the global pay-increment budget and increasing annual stock-based compensation programs, according to the memo released by industry outlet Geekwire.
The payments mainly benefit employees from the lower and middle salary range of the 181,000 employees. Nadella writes that Microsoft factored in inflation and the rising cost of living. Top positions from General Manager and Vice President are excluded.
With the higher salaries, Microsoft is responding to a dissatisfied workforce. According to an internal survey, only two-thirds believed they could get a “good deal” from Microsoft. In the previous year, the value was still 73 percent, as “Business Insider” reported.
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It is unclear how much the 3,000 German employees will receive from Microsoft. “Performance-based budgets will vary from country to country and will be based on regional market data,” Nadella writes. The German press office did not respond to a request on Tuesday.
What the German employees of Microsoft will receive has not yet been announced.
(Photo: imago images/Manfred Segerer)
Microsoft employees receive a base salary plus bonuses and stock options. Nadella wrote nothing about the absolute amounts of the increase. According to the Glassdoor website, a software engineer at Microsoft in Seattle earns $187,000 a year, and a software development engineer earns $216,000 base salary.
Tough competition for Microsoft in Seattle
Microsoft’s spending on stock-based compensation programs is public: it was $6.1 billion in the past fiscal year. The stock options are for five years in order to keep the employees in the company.
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According to reports on job platforms, employees below the top management rank receive between $10,000 and $150,000 annually in shares, depending on their career level. This amount should now increase by at least a quarter.
IT specialists are rare and in great demand worldwide. In Germany alone, according to the management consultancy McKinsey, the economy needs 780,000 additional developers or other specialists due to the increasing digitization of all sectors.
At Microsoft’s headquarters in the greater Seattle area on the US west coast, competition is particularly fierce. For a long time, the Redmond-based Windows maker had pretty much had the job market for IT professionals to itself. In the meantime, however, the Seattle-based Amazon is also vigorously recruiting workers, as are various start-ups and Google or Facebook, which have satellite offices there.
Last February, for example, Amazon announced that it would increase its maximum base salary from $160,000 to $350,000 in order to survive in the “competitive job market”.
More: BMW, Telekom, SAP: This is how Germany’s top corporations compete for IT specialists