Microsoft plans to increase salaries and benefits to keep its talent in the competitive job market as decades of inflation have eroded the spending power of American workers.
The Seattle-based tech giant said Monday it would “nearly double” its employee payroll budget as part of its retention efforts. Microsoft is also increasing the range of its stock-based compensation by at least 25%.
“This increased investment in our global compensation reflects our ongoing commitment to providing our employees with a highly competitive experience,” a Microsoft spokesman said in a statement to The Post.
According to Bloomberg, the increases apply primarily to early- and mid-career Microsoft employees. The company had 103,000 employees in the US and another 78,000 around the world as of last June.
According to Microsoft, the changes will apply primarily to employees in early and mid-career. Boston Globe via Getty Images
“This year, as we move closer to our annual total rewards process, we are making a significant additional investment to reward our employees worldwide,” Microsoft said in a statement obtained by Bloomberg.
“While we have accounted for the impact of inflation and rising living costs, these changes also recognize our appreciation for our world-class talent who support our mission, culture, customers and partners.”
The higher cost of living is just one of several considerations for companies like Microsoft and its competitors, all of which face the challenge of filling jobs in a period of high worker debt that has become known as the “Great Resignation.”
Microsoft currently has a hybrid work policy and managers must approve schedules where employees work from home more than 50% of the time.
“People come and stay at Microsoft because of our mission and culture, the meaning they find in their work, the people they work with and the way they are rewarded,” the Microsoft spokesperson told The Post.
Microsoft also encourages stock-based compensation. Getty Images for Leaders
Inflation rose to a higher-than-expected 8.3% in April and has been steady for months, eroding workers’ wage growth and putting pressure on household budgets.
Rental costs in big cities like New York have skyrocketed. The latest consumer price index showed that the cost of accommodation rose 5.1% year-on-year and 0.5% compared to March – the fastest annual rate of increase since 1991.
The prices of basic commodities such as petrol and groceries are also increasing.
In February, Amazon doubled its base salary cap for corporate employees to $350,000. At the time, the company described struggling with a “particularly competitive job market”.
Tech giants aren’t the only companies making new efforts to attract and retain talent.
As reported by The Post, Walmart is rolling out a pilot program aimed at young college grads, putting them on the path to store manager roles that pay up to $210,000 a year.