Intel shared plans with employees earlier this month on how it will keep reinvesting into its existing talent. As competition in the semiconductor and general engineering markets increases, Intel seems to have identified one way to simultaneously bolster employee retention and attract new talent: better salaries.
The additional $2.4 billion expense to Intel's bottom line will be distributed to its employees in either cash ($1 billion) or shares ($1.4 billion). Wages across the company will benefit from the extra $2.4 billion infusion at the start of 2022. Intel took this decision to "reignite our culture and drive our business strategy."
Intel isn't taking a "spray and pray" approach with this multi-billion dollar fund. Instead, the company will structure the pay increases according to employee performance and the value of their skillset to Intel and possible competitors looking to snag talent. This, of course, is a strategy that Intel itself knows all too well. AMD lost GPU chief Raja Koduri (and countless others) to Intel's graphics group.
"These updates are designed to enable Intel to win the fierce battle for talent in today's competitive market while strengthening our execution," Intel said in a written statement. "These plans include, but are not limited to, updates to our salary structure, increases to our global merit budget, differentiated bonuses for top performers, increased stock targets, and more frequent vesting for restricted stock units."
Poaching talent from competing companies at the semiconductor industry level is nothing extraordinary in itself. There's a limited pool of professionals to contract, and those that gain visibility through their excellence do so not only in their companies but in the industry perception at large. It would seem that Intel feels the need to better insulate itself from "aggressive" acquisitions other companies could make from their employee ranks. Interestingly, while Intel is generally perceived to pay lower wages than comparable companies, it currently stands at a 75% "salary satisfaction rate" according to Indeed, which is above AMD's 64% but below Nvidia's 78%.
Intel currently employs around 110,000 professionals all across the globe. The company's payroll for Oregon alone (where it has its most advanced facilities and headquarters) took some $4.6 billion from Intel's bottom line in 2021. That is an average of around $150,000 per worker, considering the company employs about 30,000 professionals in that region alone. If the whole $2.4 billion dollars were evenly distributed across its 110,000 employees, each would receive an extra ~$21,000 per year.
The company wants to hire several hundred more professionals in the Oregon region for its 1DX cutting-edge research factory upgrade. However, only time will tell whether this financial boost will be enough to secure all the sought-after talent Intel employs and will be looking to employ in its future.
I'm guessing a newly poached engineer will get an extra 400K and most employees will get a pizza party for lunch sometime.
I'm glad pay is going up. Tech companies like Intel are finally starting to wake up to the reality that expertise also works on a supply and demand cost relationship too. However, some of us have lives outside of work. Workaholics need to get a life outside of work. Companies are boosting pay without also boosting PTO, or are cutting back on PTO. Americans, in general, need more time away from work.
Intel has just been historically cheap with paying the employees. That's why an engineer in D1 that's been there past their first sabbatical is a rarity. Most technicians in the fab could go work for a competitor and make almost double simply walking in the door.
I mean, you want to have the best process and the best devices in the world, but you want to pay peanuts to get it. If you want the best in the world, then you have to pay the best in the world.