In-Demand and Hard to Keep: Navigating AI Talent Compensation

AI is everywhere right now, and not just in the tech headlines—it's shaking up every industry, from finance to healthcare. At CandorIQ, we’re particularly interested in how AI is reshaping the workforce. But we're zooming in on a slightly different angle. Rather than asking, "Will AI take my job?" we're exploring what AI is doing to the job market and how companies are competing for in-demand AI talent. This has us looking specifically at compensation: as AI-specific roles surge in demand, how are companies adjusting their pay strategies to attract and keep top talent?

To dig into this topic, I spoke with one of our advisors, Emily Witko, a people leader at Hugging Face. Emily shared valuable insights into the challenges AI companies face when it comes to compensation—and some creative ways they're tackling those challenges. Here’s what Emily had to say.

Competing for Top AI Talent

AI talent is in high demand. As Emily explained, "Since AI is 'so hot right now' there is just SO much money to be had out there. Folks are getting giant (cash) offers and it can be difficult to compete.” With big tech companies like Google able to offer enormous salaries, smaller startups have to get creative to remain competitive. And it’s not just the allure of hefty paychecks. There’s also the matter of limited supply—there just aren’t that many machine learning engineers out there yet, which makes the space even more competitive.

So, how are companies without big-tech budgets managing to attract and retain this talent? Here are a few tactics that Emily’s team uses to retain highly sought-after AI employees:

1. Building a Strong, Inclusive Culture

It sounds simple, but culture is a key factor for AI startups trying to compete with cash-heavy offers. A work environment that prioritizes respect, inclusivity, and work-life balance can be incredibly appealing for AI talent who often have options. Emily emphasized the importance of remote work options, flexible PTO, and a culture that genuinely values empathy and respect over technical prowess alone.

“It may be a boring answer, but focusing on culture and work-life balance is still huge," they shared. "Our full remote with absolutely zero chance of mandatory in-person is such a big deal.” And this flexibility is more than a nice-to-have; it’s part of what makes employees feel valued. Emily mentioned that their team doesn’t tolerate toxic behavior just because someone is a “good engineer.” Instead, they strive to hire people who align with their values of “kind ambition,” fostering a workplace where collaboration and respect are as important as skill.

2. Tailoring Compensation Packages

A one-size-fits-all approach to compensation isn’t always effective, especially in AI. Employees have diverse financial needs and varying levels of comfort with risk, so Emily’s company provides tailored compensation options. They explained how offering high-cash/low-equity and medium-cash/medium-equity packages can address employees’ different financial situations.

“Everyone has different family situations, comfort with risk, and current cash needs,” they noted. “Some people who don't have dependents are much more comfortable with stock options than a first-generation college graduate who is helping to care for her grandmother and needs cash now.” For companies offering stock options, it’s crucial to think about the long-term financial diversity of your team. Flexible packages can be a huge advantage for attracting talent from all backgrounds.

3. Addressing Global Pay Equity

AI is a global field, so AI companies are often hiring from all over the world. This can be both an advantage and a challenge when it comes to compensation. As Emily explained, it’s essential to decide if you’ll offer location-based pay and, if so, ensure equity across all regions. “Since there are smart AI Engineers worldwide, it can be difficult to develop equitable comp+benefits packages across regions,” they noted.

For their team, a tool like CandorIQ could simplify the process, helping them stay on top of pay parity and ensure that compensation practices are fair across different geographies. For any AI company hiring globally, investing in such a system can support a truly equitable approach to compensation.

4. Flexibility and Customization of Benefits

Beyond salary and equity, customizing benefits is a critical part of attracting and retaining top AI talent. Emily highlighted how a monthly wellness stipend, which employees can use for anything they consider health-positive, offers an extra level of personalization that goes beyond the traditional benefits package. This flexibility speaks to the evolving needs and preferences of AI professionals, many of whom appreciate the ability to personalize their perks. For example, one employee might choose a gym membership, while another could use the same funds for a wellness retreat.

Emily’s Takeaway for AI Companies

In a field as fast-paced and competitive as AI, Emily advises companies to focus on what their team truly values in addition to cash and equity. “Ask your potential hires what their comfort level is with stock option risk and give two offers,” they suggested. Giving employees the choice allows companies to accommodate different financial needs, risk appetites, and family circumstances. And for those operating in multiple cities or countries, a solid system to ensure pay equity is essential.

Lastly, Emily shared a unique retention perk: offering early liquidity for long-term employees through a secondary market. "Celebrating your longer-term employees with the opportunity to exercise liquidity through a secondary is a cool bonus!” they noted. For AI companies, thinking creatively about compensation packages can be a significant advantage in the race for talent.

Adapting to the Evolving AI Landscape

As AI continues to transform industries, companies will need to stay adaptable, not just in their tech but in their talent strategies too. The stakes are high, and compensation strategies are a crucial piece of the puzzle. For our clients and many other organizations, building competitive, equitable, and flexible compensation packages is becoming one of the most impactful ways to attract and keep talent in this ever-changing field.

If you want help developing, adapting, and maintaining your workforce compensation strategy, we’d love to give you a demo.