Trends in Compensation Packages

If I'm honest, half the time, I don't know what Gen Z are saying. But if there's one thing I do understand, it's that waiting until 65 to enjoy my life ain't it. The traditional career path — work relentlessly for decades, then finally retire and enjoy life — is losing its grip on the next generation of workers. Instead, they’re choosing micro-retirements: intentional career breaks to rest, recharge, and experience life throughout their careers, not just at the end. Why is this happening? They’ve seen their parents: • Burnt out from decades of non-stop work. • Saving their best years for retirement, only to hit health or life constraints. • Realising too late that financial success isn’t the same as freedom. Gen Z is opting out of that model. They’re redefining success — not as climbing the ladder for 40 years straight, but as balancing ambition with quality of life. What does this mean for companies? By 2030, Gen Z will make up 25% of the workforce. And if companies don’t rethink their approach, they’ll face a cycle where: Employees leave to take a well-earned break. They return, just not to the same employer. Instead of losing talent, forward-thinking organisations will adapt: Formalising micro-retirements: Offering structured career breaks, similar to sabbaticals, to allow employees to reset without quitting. Normalising flexible career paths: Creating return programs that make it easier to step away and step back in. Building trust over control: Recognising that employees who feel trusted to take time off come back more engaged, not less. The companies that embrace this shift will win. Because Gen Z isn’t choosing between work and life. They’re choosing both. Would you take a micro-retirement if your company offered it?

Lately I've heard top AI companies offering seven-figure packages for specialized talent from San Francisco to Singapore 🤯 🇺🇲 U.S. reports confirm this: AI roles saw 10.4% wage growth in 2024 (3x national average) according to Veritone, with AI freelancers earning 21-40% more than peers per Oxford Institute research. 🌎 We validated this with Deel's global data spanning 150+ countries across full-time and contract roles. Turns out, these trends are even more pronounced globally: - Contracts with "AI" in job titles surged 585% from 2023 to 2024 - We've processed more AI-related contracts in 2025 than in all of 2023 - AI Engineers saw a 340% increase in contracts, while senior AI leadership roles tripled - The median AI salary is 120% higher than all other roles – up 6% YoY What's the impact? In the short-term: a widening pay gap between AI and traditional tech positions. But in the long-term: I see three major shifts coming: 📈 1 - Rising compensation across tech roles as market adjustments ripple out 💰 2 - Premium salaries for professionals combining AI with domain expertise (finance, healthcare, etc) 🌐 3 - Innovation hubs diversifying globally beyond traditional tech centers The AI talent wars will rewrite the global playbook for how technical talent is valued everywhere. What are you seeing? I'd love to hear from others who’ve experienced this firsthand. And we’ll unpack this global trend more deeply in our upcoming AI Jobs Report – stay tuned.

Many FP&A teams forecast compensation using top-down assumptions like "salaries grow 3% year-over-year and benefits are 25% of pay." But this usually fails. Bottoms-up cost builds allow FP&A professionals to build accurate compensation models like this one. Instead of starting with high-level assumptions and averages, it begins with inputs that can then drive the averages used in the financial model. This is an example I sometimes use to illustrate how FP&A teams can build more accurate payroll forecasts: • Separate senior professionals from junior professionals • Build salary growth rates at the category level • Add fringe and statutory costs line by line • Calculate each cost as a % or salaries or per person • Include benefits % of salary to capture non-cash comp The result of this technique is you get a transparent, auditable model with inputs that can be easily flexed. You get immediate sensitivities that you can run on headcount, pay mix, or changes to benefits. And you can easily integrate these assumptions with workforce planning. You can also break down leadership, management, and staff by job category and assign salary bands. If the CFO asks why personnel costs went up 8%, you can show exactly where that increase is coming from. A bottoms-up cost build like this doesn't just make your forecast more detailed. It makes it more defensible for FP&A business partners serving human resources.

Hiring a remote VP? You may have to “pay up” to the SF/NYC rate Traditional geo-discounting (pay differentials) for ICs has been to roughly pay ~10% less for “USA Tier 2” markets and ~15-20% for “USA Tier 3” markets vs your “USA Tier 1” HQ. Covid and the remote work wave disrupted these geo-discounting practices to some extent with the “pay based on your output regardless of where you live” mantra. But these days, geo-based cost of labor practices have mostly settled back into previous norms. 𝗧𝗼𝗱𝗮𝘆’𝘀 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻: 𝗱𝗼 𝘁𝗿𝗮𝗱𝗶𝘁𝗶𝗼𝗻𝗮𝗹 𝗴𝗲𝗼 𝗱𝗶𝘀𝗰𝗼𝘂𝗻𝘁𝘀 𝘄𝗶𝘁𝗵𝗶𝗻 𝘁𝗵𝗲 𝗨𝗦𝗔 𝗮𝗹𝘀𝗼 𝗮𝗽𝗽𝗹𝘆 𝗳𝗼𝗿 𝗠𝗮𝗻𝗮𝗴𝗲𝗿𝘀 𝗮𝗻𝗱 𝗘𝘅𝗲𝗰𝘀? ____________ In short, according to 323,000 analyzed USA employees in Pave’s dataset, => Managers generally have similar geo-discounts to their IC peers => 𝗕𝘂𝘁 𝗺𝗲𝗮𝗻𝘄𝗵𝗶𝗹𝗲, 𝗲𝘅𝗲𝗰𝘀 𝗵𝗮𝘃𝗲 𝗺𝗮𝗿𝗸𝗲𝗱𝗹𝘆 𝘀𝗺𝗮𝗹𝗹𝗲𝗿 𝗴𝗲𝗼-𝗱𝗶𝘀𝗰𝗼𝘂𝗻𝘁𝘀. See the attached chart for the specifics. If you’re hiring a VP/CXO who lives in a traditionally lower cost metro, you may have to “pay up” partially-or-fully to the market rate as if they were in a USA Tier 1 locale. Coming soon–we can look at a similar analysis but for equity/SBC. ____________ Methodology: -USA Tier 1 metros include SF Bay Area, NYC, Seattle. -USA Tier 2 metros include LA, Chicago, Austin, Denver, Boston, DC, San Diego, Philadelphia, Portland, Sacramento. -USA Tier 3 metros include all other notable metros in the USA. Geo-discounts (pay differentials) are calculated by measuring the impact of US Market Tier location on base salary, relative to US Tier 1, normalizing by family & level. A pay differential is the ratio of the base salaries for employees performing the same job at the same seniority level in two different locations. Pay differentials focus on differences in base salary. They currently do not include non-salary compensation like bonuses, equity, and benefits or costs like payroll taxes. #pave #geographic #compensation #benchmarks

The retirement playbook is being rewritten. In a recent survey of my followers, 63% said they're either not interested in traditional retirement or planning a 50/50 work-life blend in their third act. Gen X executives are pioneering a new model: the portfolio career. Instead of stepping away completely, they're strategically positioning themselves for paid board roles and fractional executive work. Why this approach works: -Maintains industry expertise and networks -Offers flexibility to pursue personal passions -Provides meaningful income streams -Keeps you intellectually engaged The executives we work with aren't just avoiding the golf course—they're redefining what success looks like in their 60s and beyond. What does your ideal "third act" look like? Check out LinkedIn's newsletter, The Work Shift, by Taylor Borden for more insights on this trend. ( 🔗 👇🏻 ) #ExecutiveCareers #Careers #PortfolioCareer #ThirdAct #Retirement

Age: 49 CTC: ₹49 L Designation: Country Head The biggest roadblock to his next role? The designation. Titles should not be misleading. Do not chase fancy designations when there is no real money in the pocket. CXO titles carry weight. They come with expectations, benchmarks, and market perception. Country Head. Executive Director. CEO. CTO. CFO. CMO. These are serious titles. They signal scale, scope, and compensation. They look credible when the CTC crosses ₹1 Cr. Many may disagree. But here’s the reality: A title that is ahead of your compensation often routes your résumé in the wrong direction. Recruiters hesitate. Peers mismatch you. Roles get filtered out before conversations begin. Grab the title when you truly deserve it. When the role, responsibility, and CTC justify it. This is not about ego. It’s about career branding. Let your value define your title — not the other way around

When Qualtrics published its 2025 EX Trends report, they invited me to play journalist and interview one of the authors with my own agenda. My interviewee was Qualtrics’ Chief Workplace Psychologist, Dr. Benjamin Granger, who was an excellent sparring partner on a complex topic. The report is based on a survey of 35,000 employees in 22 countries and 23 industries and highlights a few notable trends: ✅ More employees are being asked for feedback ✅ Onboarding experience outperforms other moments ❌ Younger or newer employees are more likely to quit ❌ Individual contributors are losing trust in leaders But the report also hints at deeper themes for organizations facing the future of work -- e.g., proximity bias, inefficient processes, AI-driven recruiting, and mental health challenges -- and Dr. Granger's candid insights helped us both go beneath the surface. In my latest article for Forbes, I have outlined five new rules for exceeding employee expectations to address burnout, trust, and operational complexity: (1) Improve Work Processes, Not Lunch Menus (2) Respect Employees’ Feelings About Flexible Work (3) Make The First Date Memorable (4) Use AI to Recruit With Humanity (5) Beyond Burnout: Destigmatize Disability Each topic is supported by a combination of data from the report and Dr. Granger's personal experience presenting the themes to executives. My favorite quote? "Taco Tuesday is not statistically important," when it comes to reducing daily burdens. 🌮 My favorite new term? Psychological ergonomics. "It's managing in a way that appeals to the human mind.” 🧠 Links to my article and the original report in the comments. Major thanks to Ross Lambert for the amazing opportunity. #employeeexperience #futureofwork #productivity #burnout #trust #leadership #engagement #flexiblework #recruiting #onboarding #AI #wellbeing #attrition #talent

Tip for founders - if you're hiring AI engineering talent right now, be prepared to pay exorbitant equity packages. Data below shows the change in the average comp package for AI devs since January 2024. Over the last 18 months: • Average salaries for AI eng are up 9% (nearly 3x the average increase for other roles) • Average equity packages have risen 26% (!) You may be saying, "ya, ya, I read the headlines about the offers to Meta AI talent, this seems obvious". And in a way, you're right. But this level of compensation shift at startups (the analysis only includes companies worth $10M-$100M in post-money valuation) is basically unprecedented. We just don't see comp move this fast, ever. So what happens now? Couple possibilities: • AI dev talent continues to drive white-hot demand, pushing equity packages to ever-greater heights (and probably pushing other roles' equity down, btw)    • As startups remain leaner for longer, the equity pool is redistributed amongst the smaller team meaning employees get a bigger slice of equity individually. Haven't seen this yet, outside of this AI eng change.    • We hear a pop and the market deflates. Comp is (usually) a function of supply and demand. Looks like right now there's an insatiable demand for AI SWEs and that means the leverage has swung to the candidates. #startups #compensation #AIsalary #AIequity #founders  

Most people don't know how long they'll live in retirement. That uncertainty is normal. But what they believe about how long retirement lasts has real consequences. Our new report shows that workers' expectations about retirement duration have a powerful effect on how they save. Those who expect a longer retirement save more, save more consistently, and plan more carefully. Those who expect a short retirement? Far less so. Only about half of workers who expect fewer than 10 years in retirement save regularly. Among those who do, contributions are modest. Compare that to workers who anticipate 30 or more years in retirement: 71% save regularly, and at meaningfully higher rates. This matters because those expectations don't form in a vacuum. They are shaped, in large part, by how workers perceive general life expectancy. And on that question, many workers are simply wrong. Thirty-six percent underestimate how long 65-year-olds typically live. Another 18% admit they don't know. Workers who underestimate life expectancy tend to expect shorter retirements and, as a result, save less and plan less. If a long retirement does arrive, they may not be financially prepared for it. When workers don't have accurate information about how long people typically live past 65, their planning horizons are effectively too short. Better longevity literacy can shift expectations and, with them, behavior. Retirement security starts with understanding what retirement might actually look like. That means not only knowing how to save, but understanding why the time horizon matters so much. Here is the link to the report from the Global Financial Literacy Excellence Center (GFLEC) and the TIAA Institute, take a look: https://lnkd.in/gvnKMzwH

The recent shifts in compensation strategies by tech giants like Google and Amazon underscore a broader trend: a decisive move towards rewarding sustained high performance. Google’s approach to expanding its top performance rating category—while adjusting rewards for other tiers—and Amazon’s focus on rewarding long-term top performers with up to 110% of their pay band, reflect a growing emphasis on consistent contribution. These strategies not only incentivise excellence, but also reinforce cultures that value reliability and long-term impact. But as these changes take root, transparency becomes even more important. Employees need to understand the thinking behind these shifts to stay engaged and aligned. The message is clear: it’s not just about the big wins anymore. It’s about showing up, delivering value over time, and knowing how that effort will be recognised. https://lnkd.in/dWjz29Mx #DrJaclynLee #PerformanceCulture #FutureOfWork #HRLeadership