Cisco Systems is recalibrating how it pays its employees, according to Bloomberg. The move, reportedly in response to inflation, could influence how other companies compensate their people.
Starting in August, Cisco will shift some compensation from bonuses to base salary. That’s in addition to experimenting with a four-day workweek and closing offices, Bloomberg added. Cisco is the latest tech giant to explore alternative ways of working; companies such as Google and Apple are experimenting with hybrid workweeks, for instance, while others (including Twitter) have largely shifted to remote work.
According to levels.fyi, which crowdsources compensation data, entry-level software engineers at Cisco make an average of $112,008 per year, consisting of $97,274 in base salary, $7,500 in stock, and $7,234 in bonus. Those at the principal engineer level (i.e., near the top of the proverbial heap) can pull down a salary of $210,588, with stock worth $171,353 and a bonus of $87,000, for a total of $468,941. Yes, crowdsourcing isn’t always the most scientific way of gathering information; however, the levels.fyi salary ranges tend to align with other sources, so we’re inclined to trust them.
(Industry-wide, the average salary for technologists with one year of experience stood at $68,693, according to the most recent Dice Salary Report. For those with more than 15 years of experience, average salaries hit $123,533. At large companies such as Cisco, of course, compensation tends to be much higher than the industry averages.)
Simply by virtue of being paid more overall, senior engineers at Cisco are likely to see a bigger impact from a shift in the compensation mix. While transferring money from bonuses to monthly paychecks could help employees deal with inflation, it’s an open question whether such a strategy will help retain workers.
Other companies have actually poured more resources into bonuses over the past several months. For example, Apple has reportedly paid certain software and hardware engineers two rounds of bonus stock units, known as “special retention grants.” Apple’s move was designed to thwart Meta’s attempts to poach highly specialized technologists for its augmented reality (AR) and virtual reality (VR) projects.