If you lead a $2 trillion software company--like, say, Microsoft--you probably have a lot of things going on. The company's CEO, Satya Nadella, seems pretty calm anytime I've heard him speak, but let's face it, it's gotta be a stressful job. Among other things, there are products to design and ship, customers to take care of, and stockholders to keep happy. At any given time, any of those can lead to a number of major challenges.
The last thing you want to worry about is losing your best employees. That's because a CEO doesn't do those things alone. For that matter, the CEO doesn't actually do most of those things. It's just not possible in a company the size of Microsoft. In fact, I'd argue that one of the biggest challenges--if you happen to run one of the world's most valuable companies--is finding and keeping talented people who can help you deliver whatever it is you make.
That's not just true of really big tech companies like Microsoft. It's true for every company and every CEO. Managing people is always the hardest--and most important part of your job. Everything else rises and falls on how you lead your team.
I think it's fair to say the past two years have been especially challenging on that front. First, companies had to figure out how to keep people working when they couldn't come to the office. Everyone who manages people got an unexpected crash course in how to run a team meeting via Zoom. A lot of them failed.
Now, many of the same companies are trying to figure out how to get employees to come back. That's a challenge because the past two years have proved that a lot of the jobs we thought had to be done in an office don't. A lot of people are just as--if not more--productive working remotely than they ever were in a cubicle. They're also a lot happier.
That's a big deal. Keeping your people happy is a pretty important part of keeping them productive.
Not only that, but if your company isn't willing to adapt and be flexible, your employees will just, you know, get a different job. If nothing else, employees realized over the past few years that their highly marketable skills meant they had a lot more influence over their working conditions. In Microsoft's case, that means competing for talent with some of the wealthiest companies on earth.
Microsoft's solution is pretty straightforward. On Monday, GeekWire reported on a memo from Nadella, in which he told employees the company was doubling the amount of money it will spend on merit-based salary increases. Let's be honest, few things make employees happier than being paid more money.
"Time and time again, we see that our talent is in high demand, because of the amazing work you do to empower our customers and partners," Nadella wrote in the memo. "Across the leadership team, your impact is both recognized and deeply appreciated--and for that I want to say a big thank you. That's why we're making long-term investments in each of you."
The thing most worth mentioning here is that, in many cases, the paragraph would have ended one sentence earlier. In many companies, the CEO would have sent out a nice memo thanking everyone for their hard work and encouraging them to keep it up. That's nice, and all, but your employees can't pay their mortgage with your appreciation and encouragement.
That's why the last sentence matters. Nadella isn't just telling employees how valuable they are; he's also backing it up with the ultimate form of employee appreciation--a bigger paycheck. That last sentence is the difference between a platitude and a brilliant strategy for keeping the company's best talent.
"This increased investment in our worldwide compensation reflects the ongoing commitment we have to providing a highly competitive experience for our employees," a company spokesperson said in a statement to CNBC.
Look, obviously, if you work for Microsoft, it's good news. And, by the way, not just if you're a senior executive. Microsoft is focusing these salary increases not on senior-level employees, but rather on everyone else. That's a big deal on its own.
Microsoft can't afford to lose anyone. Finding highly skilled people capable of building complex things is hard. Hiring and training those people is expensive. It's both easier and more cost-effective to pay your best employees more if that's what it takes to keep them.
For that matter, if you work for any big tech company, it's probably good news since the company you work for will either have to do something similar, or you'll just go work for Microsoft. Which, is probably the point.