Amazon is reportedly raising its maximum base salary pay towards its white-collar workers due to the highly competitive labor market and the pressure of great resignation during this pandemic.
The maximum base salary is almost a 50% raise to the direct salary of its employees.
Amazon will boost its maximum base pay to $350,000 for corporate and tech employees from the previous $160,000 as part of an overall increase in total compensation intended to help recruit top talent and retain existing employees.
Amazon Salary Increase
For the vast majority of jobs around the world, Amazon stated that they would increase overall compensation ranges, and the increases are significantly greater than what the company has done in the past.
It should be noted that company compensation has traditionally been heavily based on stock options and dividends.
GeekWire reported that other forms of compensation would continue to be in existence.
Other cash compensation, such as sign-on bonuses and restricted stock units, are not included in this figure because they typically vest in increments over a number of years. What this means is that employees' base pay constitutes only a portion of their total compensation.
At the moment, Amazon is amid "Forte."
Forte is a performance evaluation process traditionally done annually in which Amazon employees can get promoted. An example of this is when company founder Jeff Bezos was replaced by the CEO who succeeded him, Andy Jassy.
Competitive Labor Market
Ever since the coronavirus pandemic began, workers have been given greater leverage to demand better benefits and pay in the workplace. The competition for labor is more intense than it has ever been.
Nowadays, companies are also increasingly offering flexible work arrangements, such as remote or hybrid employment, to attract and retain employees.
As a result, Amazon and other tech companies have acknowledged that failing to provide those benefits could have a negative impact on their ability to attract and retain qualified employees.
According to CNBC, Amazon said that the labor market has been particularly competitive in recent years. With that, they decided to make meaningfully larger increases to their compensation levels.
After conducting a thorough analysis of various options and weighing the economics of their business also affects the decision of the board to increase and improve its compensation pay towards its employees
Read Also: City in the Netherlands To Be Disassembled to Give Way to Jeff Bezos' Super Yacht, Residents Are Mad
Breaking Point in The Great Resignation
Amazon is reportedly coming under fire from its own employees over what they perceive to be below-market compensation.
As reported by Insider, based on compensation data from a startup that analyzes compensation data called Level.fyi, Amazon pays roughly 15 percent less than its industry peers and does not rank among the top 20 best-paying technology companies.
The long-standing hiring and compensation strategy founded by Jeff Bezos is said to have reached a toll on their employees.
As a result, the cash compensation, restricted stock units, and a sign-on bonus that is paid out over a period of two years are a few reasons why Amazon has historically kept base pay lower than many of its competitors.
Unfortunately, working for Amazon during these times may be more challenging for some employees since the world is under the "Great Resignation" phase. This leaves vacant posts to vital job positions since there is great competition for talent.
Other tech companies are offering a higher base salary, as opposed to Amazon's cap of around $160,000, and stock compensation that appreciates more quickly in an attempt to recruit Amazon employees.
Nevertheless, this huge increase Amazon will implement to its pay strategy will surely help retain their talents and align their company with other major tech companies, such as Google, Facebook, Apple, and Microsoft, in the near future.
