From: aidotengineer
Historically, recruitment narratives have heavily relied on offering attractive pay and equity packages to entice talent [00:16:23]. However, this approach is becoming less effective and increasingly unsustainable, especially in the competitive AI landscape [00:16:32].
The Shifting Landscape of Compensation
Data indicates a significant change in compensation trends:
- From November 2022 to November 2024, the average tech salary only saw a 1.6% increase [00:16:39].
- There has been a “precipitous decline” in the amount of equity granted [00:16:45].
- AI Engineers, while highly sought after, command a 5% salary premium and a 10 to 20% equity premium over other engineering roles, making them even more expensive to recruit [00:17:01].
This trend necessitates moving beyond salary as a sole selling point [00:17:20].
Declining Appeal of Equity
Equity, once a strong motivator, also faces challenges:
- In Q2 2024, only 33% of people exercised their vested shares, a drop from 55% a couple of years prior [00:17:43].
- This decline is attributed to concerns about potentially high valuations, the cost of liquid capital required to exercise shares, and the rapidly shifting market in AI [00:18:00].
- Consequently, equity can no longer be the sole additional incentive offered [00:18:06].
Components of a Strong Narrative
To attract top talent, particularly in AI, companies must broaden their recruitment narrative beyond financial incentives [00:18:11]. Key elements to highlight include:
- A Close-Knit Environment: Emphasize the opportunity to work closely with founders [00:18:18].
- Collaborative Teams: Showcase a culture of teamwork and shared goals [00:18:20].
- Speed and Lack of Friction: Highlight the ability to quickly get things done without excessive bureaucracy [00:18:25].
- A Big Mission: Articulate a compelling vision that resonates with potential hires [00:18:29].
- Growth Opportunities: Detail paths for personal and professional development and career advancement [00:18:31].
- Exploding Markets: Position the company within a high-growth, dynamic industry [00:18:34].
- Solving Complex Problems: Appeal to individuals who are motivated by challenging and impactful work [00:18:37].
Understanding Your Company’s Story
Drawing an analogy from Kurt Vonnegut’s concept of story shapes, companies must understand their own “arc” [00:16:19]. This means acknowledging past challenges, celebrating triumphs, and articulating a clear vision for the future [00:16:19]. This comprehensive narrative should not only highlight where the company is today but also its trajectory and potential [00:16:19].
Conclusion
In a crowded market where many companies are competing for the same talent, leveraging data to inform recruitment strategies, including hiring and culture, offers a significant edge [00:18:54]. Just as data is used to build products and models, it should be used to build effective teams, as the team itself is a company’s most valuable product [00:19:10].
This means:
- Acknowledging the de-credentialization trend and filtering candidates based on experience rather than solely on academic requirements [00:19:16].
- Understanding that location still matters and tracking talent movement [00:19:19].
- Utilizing data to identify the optimal timing for outreach and assessing how long individuals stay at companies [00:19:27].
- Ultimately, all of these data-driven insights contribute to crafting a more compelling and effective recruitment narrative [00:19:34].