The ‘Great Resignation‘ has shown that employees will go elsewhere if an employer doesn’t give staff what they need. Amid the cost of living increases, one thing employees may want is a pay rise.
At least this is the perspective of tech giant Microsoft. The tech giant has committed to nearly doubling its budget for wages and stock options.
Interestingly, rather than focusing on senior staff, Microsoft wants this pay move to impact “early to mid-career employees”. This was shared by Microsoft CEO Satya Nadella in an email to all employees.
Managing extra wages
In a statement to staff, Microsoft explained the policy change: “As we approach our annual total rewards process, we are making a significant additional investment this year to compensate our employees globally.
“While we have factored in the impact of inflation and the rising cost of living, these changes also recognize our appreciation to our world-class talent who support our mission, culture and customers, and partners.”
In an internal message to employees that was shared with Bloomberg, CEO Satya Nadella noted: “Time and time again, we see that our talent is in high demand because of the amazing work that you do.
“Across the leadership team, your impact is both recognized and deeply appreciated — and for that I want to say a big thank you. That’s why we’re making long-term investments in each of you.”
It is unclear exactly how pay increases will be dealt with, but Microsoft stated: “Specifically, we are nearly doubling the global merit budget. Merit budgets will vary by country, based on local market data, and the most meaningful increases will be focused where the market demands and on early to mid-career levels.
Additionally, Microsoft is “increasing annual stock ranges by at least 25% for all levels 67 and below.”
The reason for higher pay
While raising wages helps employees in a time when the cost of living is skyrocketing, it also helps Microsoft as a business.
With employees ready to resign for better wages, this policy makes Microsoft more competitive in the ‘Great Resignation’. Particularly, as tech competitors for talent like Amazon have doubled its maximum wage for employees this year.
Ensuring that employees can have a good quality of life in trying times is a simple way to improve loyalty. On top of that, rewarding employees for hard work is an effective tool to build a bond to a company.
With all this in mind, is it time you followed Microsoft’s example and gave out some pay rises?
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