As the war between Google and Facebook escalates, Google has recently indicated that beginning in January, all 23,000 employees will be receiving a 10% raise. This move is an attempt to prevent the defection of Google's staff to competitors. Silicon Valley has been seeing an increase in heated competition for talent as both Google and Facebook are expanding their services and require a higher concentration of talented workers to satisfy the production needs of the company. According to a recent study, approximately 10% of Facebook's employees are Google veterans and that number was gradually increasing. Universities and graduate students who used to prospective applicants to solely Google are now looking to other opportunities within the Silicon Valley. Google originally had a functional monopoly on high skilled talent for their services, but with the introduction and expansion of Facebook, potential employees have a wider array of choices for companies to work with.
The Chief Executive of Google disclosed in an email that the 10% raise was implemented in order to lift the morale of the company's employees. Specifically stated that they wanted to make sure that they "feel rewarded for their hard work" and to "continue to attract the best people". While Google is notorious for the numerous benefits they provide their employees and the luxurious work environment they provide, a survey conducted by the Chief Executive indicated that salary was the most important aspect of Google employees than any other component of pay. Other components of Google's pay include bonuses into their base salaries. What's also interesting is that Google is moving a portion of employees' bonuses into their base salaries in order to allow employees to receive some of it within every paycheck. This 10% increase provides a long-term benefit for employees as opposed to a short-term fluctuation in their salary. Ideally, the raise will allow Google to sustain their employees for a longer period of time.
As both companies introduce new products, such as Google's rumored social network development, the need for high skilled talent will be essential. Only time will tell which company emerges on top.
It amuses me that Google, being ranked as the number one place to work is now competing with Facebook. It was ranked number one do to its "cafeteria plan" and focus on the employees lifestyle, providing free food, and activities. Yet, this does not seem to be enough, in order to keep their employees they are now augmenting the salary to 10%. My question is, what do you think Facebook is doing to achieve such attraction? Are people quitting their jobs in Google to just to say they are working for "Facebook"? Or is Facebook actually offering something else?
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