Since the start of the COVID pandemic, the US workplace has changed – perhaps inexorably.
In particular, the majority of companies have allowed non-essential employees to work from home in the interests of health and safety. Initial decisions were made in March and April of 2020. Since then, employers have made adjustments, listening to the concerns of their key workers.
In this article, we’ll share how technology giant Google is addressing the issue of allowing their workers to work from home.
Background: A Brief History of Google
Google, LLC is a subsidiary of Alphabet, Inc, a publicly traded (Sym: GOOGL) company headquartered in Mountain View, California. Founded in 1998 in Menlo Park, California, by Larry Page and Sergey Brin, Google is now part of “The Big Five” companies within the American information technology industry – along with Amazon, Facebook, Apple and Microsoft.
Google and its subsidiaries provide a full suite of internet-based services and products, including location systems, cloud consulting, a premier search engine, online advertising services, and associated software and hardware.
As of 2021, Google employs just under 145,000 employees working in 85 offices across the globe. Google sells products and services in almost every country, except for a few that are under US government sanctions (e.g. North Korea and Syria). Slightly more than half of Google’s employees are full-time, the rest of which are contractors.
Google’s leadership team is spearheaded today by Sundar Pichai, CEO, and Ruth Porat, CFO.
While locations follow specific rules based on COVID related issues, Google’s North American workers have had the highest percentage of stay-at-home workers.
Currently, any of them can choose to work from home.
Google’s Office Locations
Headquartered at 1600 Amphitheater Parkway, Mountain View, California, Google has a presence in each of the 5 major regions around the globe, with the maximum number of locations being in North America, Europe and Asia Pacific, in order.
The office breakdown is provided below:
- North America – 32 office locations
- Latin America – 6 office locations
- Europe – 24 office locations
- Asia Pacific – 18 office locations
- Middle East & Africa – 5 office locations
The average office attendance would be slightly over 1,700 employees per office location if they were evenly spread across the globe. However, the vast majority of the company’s employees (100,000+) live and work in the US, which means that the average US office has 3,000 employees.
Google’s Work from Home Policy
Beginning in March of 2020, Google permitted all its employees to work from home as the COVID pandemic caused safety issues across the globe. While the initial “recommendation” was for 30 days, there have been many extensions.
Since early 2020, multiple stops and starts happened along the way. There have been both short terms accommodations due to safety concerns as well as some long-term changes in remote working policies. They are described separately below.
Communications from the CEO
Google’s CEO, Sundar Pichai, has been quite transparent in terms of his statements in this regard. The main components of corporate commentary on work from home were as follows:
- Like many other CEOs, Mr. Pichai has maintained that the importance of teams working in close proximity cannot be understated, and that Google would prefer employees work from the office with reasonable frequency.
- That said, they have maintained a level of empathy to the health and safety concerns, pushing back the back to office deadlines in response to fresh bouts of COVID.
- Most recently, the CEO has clearly communicated that once offices reopen, the company will make provisions for certain workers who prefer flexibility in terms of remote work.
Work From Home Updates Due to COVID
Google has been in a reactive mode as new strains and variants of COVID have extended what the leadership originally planned. For example,
- In December 2020, Google announced that employees will start working at the office 3 days a week (or 60% of the time).
- In May of 2021, U.S.-based employees were informed that they could continue to work from home through September 2021.
- At the end of August 2021, this voluntary work-from-home policy was extended through at least January 10, 2022.
Long-Term Changes in Google’s Remote Work Policy
Though the company values face to face interactions between its employees, the COVID-driven rule changes have also created a situation for Google’s leadership to revaluate how the company should adopt to a changing work environment. The employees have clearly voiced their eagerness to have more flexibility in terms of working from home.
Currently, Google has announced certain decisions that will be implemented long-term, even after COVID is under control. Some key elements are as follows:
- Google now offers its employees the option to temporarily work in a location that is different than their permanent office for up to four weeks a year – up from two weeks.
- Depending on which specific team they are working on, permanent employees and contractors should plan to attend their office at least three days a week (and more if there are specific business reasons for doing so).
- Once people are back in the office for 60% of their time, Google plans to discuss how it will allow employees further flexibility in terms of working out of their main office locations – whether it be working from home or from a different office location.
- In general, contractors will be asked to be at the office the same day as full-time employees on their core team.
- One of the adjustments the company intends to follow through on is in terms of altering the pay structures of employees and contractors who wish to work remotely. Essentially, there will be a trade-off between convenience and lifestyle choices with their pay structure.
Google’s Pay Structure
Google has one of the best pay structures in the industry, with well-defined guidelines for employees to advance through the ranks. The company’s policy is to reward those who perform when setting compensations and advancements for both full-time employees and contractors.
In general, there are four categories of regular compensation that Google offers employees:
- Base Compensation
- Annual Performance Bonuses
- Signing Bonus
- Stock Options
We will discuss some of the specifics later, but let’s first review some of the salary ranges for two categories of Google employees per Paysa’s Salary Rankings.
The results were compiled after conducting surveys of more than 10,000 Google employees.
Salary Ranges for the Average Google Employee
Overall Market Salary Range: $147,000 to $348,000 | Average Salary: $243,000 per employee
Average Market Salary Makeup
- Base Salary $134,000
- Annual Bonus: $23,100
- Signing Bonus: $19,400
- Annual Equity (Stock Options): $65,200
Salary Ranges for Google Software Engineers
Overall Market Salary Range: $206,712 to $261,229 | Average Market Salary: $233,000 per employee
Average Market Salary Makeup
- Base Salary $131,587
- Annual Bonus: $22,200
- Signing Bonus: $20,100
- Annual Equity (Stock Options): $59,400
Understanding Google’s Compensation Philosophy
Besides the components that make up compensation for Google employees, the company consciously promotes a culture of “pay for performance”, which typically turns into merit raises, performance bonuses and stock option grants at year end.
The basic salaries are set based on:
- The local market conditions, depending on the role played and the level of employment.
- Additional incentives (pay targets) offered to top performers based on achieving their performance goals, depending on their roles, tenure and office location.
Bonuses are of two types:
- Company Bonus Plan
- Sales Bonus Plan
Google innovatively and flexible alters the mix of base salaries, bonuses and stock options based on roles, levels and seniority.
As we discuss below, potential adjustments may be coming for workers who want more flexibility in terms of remote work.
Google’s Work from Home Incentives
During the pandemic, Google announced various incentives to employees who wished to work from home, some of which may continue as the company firms up its policies in the future. Some of the incentives offered included a $1,000 stipend package to buy work-from-home gear to employees who were unable to come in to the office during COVID.
One of the major changes in the works, as described above, is how Google will address the changing nature of their workforce when they want more flexibility to work from home or at office locations other than their regularly scheduled workplace.
The leadership has taken steps to allow more flexibility (allowing four weeks of remote work) and has promised to take a hard look at yet more adjustments. The expectation is that the company will adhere to the 60% in office rule overall but may allow more options to work from home in return for a lower total compensation package.
In August 2021, some 10,000 Google employees requested permission to work from home, or from remote locations or relocate. Google has approved over 85% of the requests. The tradeoffs were that the employees agreed to pay cuts if they worked from home or moved to a state or city where the market compensation levels are lower than cities like New York or the San Francisco Bay Area.
The Final Word
Work from home is here to stay, and even more “traditional” technology companies like Google are taking safety and optionality into account when it comes to deciding how and where their employees work. As employees not only worry about their physical health, there is a growing clamor for more flexibility.
The right answer for the two sides – namely Google and its core employees and contractors – is to offer a balance between a reasonably lower rate of compensation in return for a better work-life balance for those who want it.