From: aidotengineer
In today’s competitive talent market, particularly within the AI space, companies must develop a compelling narrative that extends beyond traditional compensation like salary and equity. While these factors were historically central to recruitment, their singular reliance is no longer sustainable [00:16:23].
The Evolving Landscape of Compensation
The average tech salary increased by only 1.6% between November 2022 and November 2024, accompanied by a significant decline in the amount of equity granted [00:16:32]. For AI engineers, the situation is even more challenging, as they command a 5% salary premium and a 10-20% equity premium over other engineering roles, making an already expensive talent pool even pricier [00:16:50].
Furthermore, relying on equity as a primary draw has become less effective. In Q2 2024, only 33% of individuals exercised their vested shares, a notable drop from 55% just a couple of years prior [00:17:33]. This decline is attributed to concerns over potentially high valuations, the cost of liquid capital needed to exercise shares, and the rapid, often volatile, shifts in the AI market [00:17:47].
“Salary as a sole selling point has got to go. Equity can’t be the only other thing that we’re relying on.” [00:17:17]
Beyond Financial Incentives: Building a Holistic Narrative
To attract top talent, companies must understand their own “arc” – their triumphs, current position, and future direction [00:16:06]. This involves constructing a narrative that highlights non-monetary advantages and intrinsic motivators.
Key Elements of a Strong Company Narrative:
- Culture and Environment: Offer a close-knit environment and opportunities to work directly with founders [00:18:15]. Emphasize collaborative teams [00:18:20].
- Efficiency and Impact: Showcase a culture of speed and a lack of friction in getting work done [00:18:22].
- Mission and Purpose: Articulate a compelling, big mission that resonates with potential hires [00:18:25].
- Growth and Development: Provide opportunities for personal and professional growth, including career advancement [00:18:29].
- Market Opportunity: Highlight the excitement and potential of “exploding” markets your company operates within [00:18:31].
- Problem Solving: Emphasize the chance to engage in and solve complex problems [00:18:34].
Understanding and clearly communicating these aspects for your company is crucial to avoid an over-reliance on salary and equity in your recruitment narrative [00:18:37].