Software giant, Microsoft Corporation CEO Satya Nadella said in a memo to staffers that the company is increasing compensation for its employees as the labor market tightens and employees contend with increasing inflation.
Microsoft has planned to “nearly double” its budget for employee salary increment and boost the range of stock compensation to give some workers by at least 25%.
This had come in an effort to retain employees and help people cope with inflation. The move will mainly affect early to mid-career employees, the software giant said in a statement.
The Redmond-based company said, “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.” It added.
In addition to contending with cost-of-living increases and a tight Seattle housing market, Microsoft is locked in a fierce battle for talent with companies like Amazon.com Inc., Google, and Facebook owner Meta Platforms Inc., as well as startups.
The company further said, “This increased investment in our worldwide compensation reflects the ongoing commitment we have to provide a highly competitive experience for our employees.”
As per the memo shared by Nadella, the company has already put in place higher budgets for promotions and a special stock award meant to recognize the exceptional impact and support retention of the most competitive talent pools.
The stock hike will be applicable to Level 67 employees who are senior managers and below. The increments in salary budgets will differ from country to country, based on market demands.