Microsoft boosts cash pay to workers in bid to stop talent fleeing to tech rivals

Add to My Stories Microsoft workers will soon be in for a pay rise as the technology giant desperately tries to stop talent fleeing to rival companies in a 'dramatic' brain drain.
Competition from younger businesses like Google and Facebook has prompted the firm to significantly improve salary deals for many junior and mid-level workers, including shifting some of their compensation from shares to wages.The move comes as Silicon Valley sees its biggest hiring spree in more than a decade, with young talent being tempted by fat contracts, hefty bonuses and an array of freebies.

Please don't go! Bill Gates's Microsoft is increasing pay for some of its staff as it tries to halt a 'dramatic' brain drain to tech rivals In an email seen by the Wall Street Journal, chief executive Steve Ballmer told employees compensation will be increased for staff 'where the market has moved the most.'That includes junior and mid-level workers in research and development, and all mid-level employees in certain areas.

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Microsoft also said it will increase funding for its bonus and stock awards to better reward its top performers when it introduces the changes in September.Mr Ballmer wrote: 'These changes represent the most significant investment in overall compensation we have ever made.'The firm is responding to stiff pressure from Facebook and other privately-held companies who can tempt employees with the prospect of future public stock.It also faces fierce competition for workers from more established publicly-owned companies such as Google, Salesforce.com Inc. and VMware Inc.

Bra! in drain : Microsoft has announced plans to increase cash pay for employees as it attempts to hold on to top talentBrendan Barnicle, an analyst at Pacific Crest Securities, told the Wall Street Journal Microsoft was battling a 'dramatic' brain drain, as software developers in particular leave the company for sweeter deals elsewhere.
He said: 'There's an ongoing war for talent.'That war has turned technology workers - and new graduates - into coveted commodities in Silicon Valley, which is seeing its biggest recruitment drive since the dot.com bubble of the early 2000s.Microsoft, Facebook and Google are all aggressively recruiting college students in an attempt to hire them before they graduate.Skype and Groupon have launched billboard campaigns in the San Francisco area, urging young technology graduates to 'embrace your true calling' or 'do something massive.'

Rivals: Microsoft is fighting for talent against young firms like Facebook. Its founder, Mark Zuckerberg, welcomed the president to his California HQ this weekAs well as hefty salaries and big bonuses, technology firms are also offering employees freebies including iPads, meals and tickets to sporting events as the $805billion industry begins to bounce back.
Last year Google gave an across-the-board 10 per cent pay increase to its 23,000 staff in an attempt to stave off competition from smaller firms.Microsoft's move away from rewarding employees with shares is another indication of how much the appeal of its stock has diminished as a way of recruiting new talent.
The company's shares are now about 26 per cent lower than they were ten years ago, as investors begin to doubt its long-term growth prospects.But an insider told the Wall Street Journal stocks and shares will continue to be an important part of its compensation for employees, tying their fortunes with those of the company.



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