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Google hands staff 10% pay rises

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Google is showing it still knows how to make its employees feel special – it is giving all 23,300 of them a 10% pay rise next year.

The internet search leader also plans to shift part of workers’ annual bonuses into their regular pay packets, according to an internal memo sent by Google chief Eric Schmidt, but those bonuses will not count towards the 10%.

Google has long been known for feeding its workers free food and pampering them with other perquisites that would be considered luxuries by most employees.

But the company began taking away some of the goodies in late 2008 and early 2009, and it went so far as to lay off a few hundred people to help boost its earnings during the depth of the worst US recession since the Second World War.

But the good times are now back at Google, with revenue rising 23% to 21 billion US dollars (£13 billion) in the first nine months of 2010.

Confident of even more prosperity ahead, Google has added 3,500 employees so far this year to expand its workforce by nearly 20%. It has also been spending heavily on acquisitions and investments in the data centres that run its online services.

The raises are yet another sign of Google’s bullishness. The company didn’t disclose how much the added payroll would cost, but assuming an average employee salary of 100,000 US dollars (£62,000) – which is not outlandish by hi-tech industry standards – the across-the-board raises would amount to an additional 233 million US dollars (£144,000) annually.

Mr Schmidt framed the raises as a way to reward “the best employees in the world”, but the move may also be part of a strategy to slow defections to up-and-coming internet rivals, such as Facebook. The rapidly growing social networking site has become more aggressive about recruiting Google workers since it hired one of Google’s top sales executives, Sheryl Sandberg, as its president two-and-a-half years ago.

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