Google employees are asking for more pay to match the rise in inflation. The company has announced it won’t comply. CNBC’s TechCheck anchors discuss what it means for internal and external Google employees. Sign up and learn more about the CNBC Investing Club with Jim Cramer

Google executives are acknowledging employee concerns about rising inflation, but say they have no plans to respond with a companywide pay increase.

The topic of workforce pay was addressed at a special meeting on Tuesday that was intended to focus on Google’s 2022 strategy.

Ahead of Google’s all-hands meetings, now conducted virtually, executives determine some of what they will discuss based on questions that are submitted to an internal forum called Dory. With more than 400 “upvotes,” a question related to inflation costs and employee pay received enough interest among the workforce to garner attention.

CNBC obtained audio of the meeting and viewed a copy of the inflation question, which Alphabet CEO Sundar Pichai read aloud.

“With the U.S. inflation rates being as high has 7%, some companies are doing blanket salary adjustment to cover just the inflation,” Pichai said. “Is there any plans for Google to do the same thing?”

Pichai then gave the floor to Frank Wagner, Google’s vice president of compensation. Wagner opened by saying that he recognizes the significance of inflation and compensation concerns among the company’s workers.

“Inflation does seem to be atop of mind for a lot of folks, and I think one of the reasons is that people are pretty eager to get their compensation awards,” Wagner said.

He said company leadership would be releasing letters to managers this week so employees will learn their compensation awards for the next year.

However, he went on to say that while Google is trying to pay competitively, it won’t introduce companywide adjustments for inflation.

“As I mentioned previously in other meetings, when we see price inflation increasing, we also see increases in the cost of labor or market pay rate,” Wagner said. “Those have been higher than in the recent past and our compensation budgets have reflected that.”

Wagner then said that should pay rates go up, Google doesn’t want to give “smaller increments to everybody” but instead “we want to adjust it and pay it by performance.”

“We don’t have any plans to do any type of across-the-board type adjustment,” he said.

In a statement, a company spokesperson echoed Wagner’s comments about Google increasing pay based on performance and said that worker pay doesn’t just come from salaries.

“Employees receive bonus and equity as part of their total compensation, which also includes generous benefits and flexibility,” the spokesperson said.

Google’s comments are a telling indicator of its priorities at a time when the so-called “Great Resignation” is leading workers across the country to leave their jobs in hope of better pay, a different location or a new and exciting challenge.

Google is an outlier

Some 4.2 million people quit their job in October, according to the Labor Department, down from a record 4.4 million in September. Meanwhile, inflation topped 6% in October, the highest since 1990, meaning consumers across the country are paying more for gas and groceries.

The battle for tech talent is particularly intense as the Covid-19 pandemic has turned remote and flexible work into a benefit that many office workers now expect in the future.

While Google recently delayed its January return-to-office plans amid ongoing concerns about the coronavirus, the company is an outlier in requiring employees to come back to physical offices three days a week. Salesforce is allowing for permanent remote work, and co-CEO Marc Benioff has said he expects 50% to 60% of employees to work from home even after the pandemic.

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Google Execs Inform Employees that Salaries Will Not Be Increased to Match Inflation

In an unexpected move, Google executives recently announced that they will not be raising salaries to match inflation rates, despite the increasing cost of living. This decision has left employees feeling disheartened and concerned about their financial situation.

Google, known for its generous compensation packages and employee benefits, has been a dream workplace for many tech professionals. However, this recent announcement has shattered the belief that their salaries would keep pace with the rising prices and overall economic growth.

The decision, which affects thousands of employees across various departments and positions, exemplifies the complex dynamics between companies and their workforce. While Google continues to thrive financially, posting record-breaking profits and revenue growth, employees are left to face the economic challenges caused by inflation alone.

Inflation, as we all know, erodes the purchasing power of money over time. As the cost of essentials like housing, groceries, and healthcare continues to rise, employees are finding it increasingly difficult to make ends meet on their existing salaries. Many had counted on regular cost-of-living adjustments to help them navigate these rising expenses.

What adds to the discontent among employees is the fact that Google’s top executives, along with other high-ranking individuals, continue to receive significant bonuses and stock options. This creates a glaring disparity in compensation within the company, leading to feelings of inequality and unfairness among the workforce.

Critics argue that this decision reflects Google’s prioritization of corporate profits over the well-being of their employees. As the company’s financial success is fueled by its talented workforce, some question whether Google is making the right long-term strategic choice by not addressing the impact of inflation on employee salaries.

However, Google executives defend their decision by stating that they are constantly evaluating their compensation strategy to remain competitive within the industry. They argue that their total compensation package, which includes various benefits like health insurance, retirement plans, and onsite amenities, ultimately provides a significant overall value to employees.

While it is true that Google’s total compensation package is still considered attractive, employees argue that this does not negate the impact of inflation on their daily lives. The rising cost of housing and other essentials cannot be offset by the inclusion of non-monetary benefits.

The lack of a salary increase to match inflation may lead to negative consequences for both employees and Google as an employer of choice. As employees face financial strain, their motivation, loyalty, and overall job satisfaction may be negatively affected. This, in turn, could lead to reduced productivity and increased turnover rates within the company.

It remains to be seen how Google employees will respond to this decision and whether it will result in any significant actions or protests. As one of the most influential tech companies in the world, Google’s stance on employee compensation will undoubtedly continue to be closely watched by the industry as a whole.

Ultimately, this situation raises important questions about the balance between corporate profits and employee well-being, and whether companies have a responsibility to ensure their employees can maintain a decent standard of living amidst a continuously changing economic landscape.