Google Raises Salaries By 10 Percent

Google awarded all its employees with a 10% pay raise. In times of economic recession and a troubled world economy this is a very remarkable decision that comes with a huge price tag.

What could be the reasons behind this bold decision? From a business point-of-view this move is interesting, because it shows that Google tries very hard to keep its talented workers and to prevent them from quitting their jobs at Google and start their own businesses or move to other, competing companies like Facebook, Twitter etc.

These companies offer advantages that Google cannot offer anymore. They are still relatively small: While Google has about 23.000 employees, Facebook “only” has 1700 employees and with 300 employees Twitter is even smaller.

They still have flatter hierarchies and thus leave there employees more room for creativity and “entrepreneurship” and employees enjoy a greater degree of independence. “Google isn’t the hot place to work” as a recruiter for companies such as Facebook states in a WSJ-Interview. In addition, Facebook is still private and can therefore offer their potential employees pre-IPO stocks which can become very valuable once Facebook goes public.

However, Google knows that it’s the human capital, the employees, who are the reason for Google’s competitive advantage. Without the best employees, Google cannot remain the best IT-company. So every dollar invested in its employees will yield a high ROI for them. This is especially true in industries that are innovation-driven and change frequently.

Innovation is much needed

And the same is true for the travel industry. We also need innovative and smart people who initiate the necessary changes for our industry. Unfortunately, most companies do not put such effort into attracting the best people. To invest in human resources might be a good idea for the GDSs. They too have the money and instead of spending it to secure their current market position and playing it safe, they could invest their millions to attract a creative and innovative workforce. Maybe then we would finally see groundbreaking innovations by the GDSs or start-ups they support in any way. This would not only be good for the GDSs, but also for the entire industry, since we still don’t really know, if Google will use its talented employees to conquer the travel industry.

“Innovation is the key success factor of our industry and innovation requires the right people. Individuals, who are smart and dare to think in different ways on not the same pattern over and over again. Entrepreneurs who like to take risks as risks always involve chances. Travel executives need to know that the world is moving – and if it moves to direct connects as we can see from recent news then you need to hire the people who will find ways to make technology work for you. After all, it’s our employees who create value for us and our customers. “, says Michael Strauss, CEO of Miami-based PASS Consulting Corporation.

Ironically, the only one not to receive a pay raise, was the employee who leaked the information about Google’s pay raise to the media. He was fired instead. Poor guy, but he should have known best that you cannot hide anything you do online from Google. And as pointed out in a comment on the article on “Mouths and ears are effective communications devices. Their packets are not logged by any of Google’s servers.”

Image by Kritchanut

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