Large California-based companies are raising salaries and bonuses to prevent seasoned employees from defecting to a competitor, while compensation for junior engineers just leaving university has gone up 30-50 per cent in the last year, according to several industry insiders.

Microsoft in April announced a pay rise for its 90,000 employees. That followed Google raising salaries by 10 per cent at the end of last year to prevent a loss of talent to other Silicon Valley companies such as Facebook. Read more