Google finds pay is a pain point

Have you ever heard of “Googlegeist?”

The name sounds like a scary movie. But it’s actually the internal name of Google’s annual survey. It gauges employee satisfaction on compensation, leadership, and company culture, among other factors. I’m sure some of the latest findings have frightened executive leadership.

Many employees aren’t impressed by what the tech giant is paying. Less than half (46%) of employees said their pay is competitive, a decrease of 12 points from last year. The survey results obtained by CNBC also found that just over half (56%) said their pay is “fair and equitable,” which is a decrease in eight points from the prior year. 

But 64% of respondents said performance reflects their pay. However, that’s down three points from last year’s survey. And, when it comes to the cloud group, just 54% of employees said the promotional process is fair, a decline of two points from a year ago.

“We’ve always provided top of market compensation across salary, equity, leave, and a suite of benefits,” A Google representative told Fortune in a statement. “Getting employee feedback is important and we’ll continue to ensure we pay competitively everywhere our employees work and help them grow their careers at Google.”

Attracting and retaining talent is a priority for the company that is hiring—massively. Alphabet “added nearly 6,500 people in the fourth quarter, and the majority of hires are for technical roles,” Ruth Porat, CFO of Google and its parent company Alphabet, said on the Q4 2021 earnings call last month. And a “strong pace of hiring” is expected across Alphabet this year, Porat said.

So, what should you do when your employees are unhappy about pay? 

“Every organization should have a mature approach to compensation and total rewards that they feel confident about,” Lexi Clarke, senior director of human resources at Payscale, told me. But only about half of organizations do so, according to Payscale’s 2022 Compensation Best Practices Report, she says. 

Clarke offers the following advice: “The first question to ask is why are employees unhappy with their pay? Are we talking about a few employees who feel they can do better on the open market? Or is your whole organization suffering from a systemic issue? Are your employees paid fairly to market but are still unhappy? Or are your employees actually paid below market? How do you know? What salary data are you using?”

“Often though, when employees are unhappy with their pay it comes down to a misunderstanding around how pay is determined and a lack of pay communications,” Clarke explains. “You need to be able to articulate your policies clearly and train managers on how to have compensation conversations as part of a bigger commitment to pay transparency.”

Vicki Salemi, a Monster career expert, says in this current war for talent, “employers should focus on what employees are looking for and fair compensation is among the top of the list.” The top three aspects that candidates want from their employer, according to Monster’s annual global Future of Work report: fair compensation (40%), health care benefits (40%), and financial compensation beyond salary (36%).  

“Across the board, compensation is a top concern,” Salemi says. “However, health benefits and flexibility are also top of mind. If employers aren’t able to boost salaries, consider offering more flexibility such as more PTO. Another thing to consider is mental health days to provide workers with more time while simultaneously offering wellness benefits.” Salemi also notes that perks like, “ping pong tables, free lunches and reimbursement for commutes” are nowhere on the top list of what candidates want.

Should companies cut back on such perks? “Cutting back on perks can be an advantageous strategy for some organizations that are in financial distress,” Clarke says. However, “what you don’t want to do is curb the differentiators for your culture where there is no great advantage to doing so.”

And speaking of company culture, employees gave Google’s mission a 90% rating, and an 85% rating for values. Employees gave CEO Sundar Pichai a favorability rating of 86%. So, amidst the fright, Googlegeist did have some bright spots. 

See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

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