A candidate accepts a £120,000 offer. The offer is agreed, the start date is confirmed, and the business thinks it has secured its new hire. So did we, to be fair.
Two days later, another company offers £240,000.
Same candidate. Same experience. Same skills. Double the salary.
So who’s got it wrong? Is the first business massively underpaying? Is the second throwing money around? Or is this individual worth £240,000?
The answer might be that neither business is wrong, and that is the part most employers miss when hiring AI talent.
You’re not competing against businesses like yours
When businesses set salaries, they tend to look at market benchmarks, internal salary structures and what similar organisations are paying.
That’s sensible. But it doesn’t tell the whole story.
An established business hiring an AI engineer to improve its internal capabilities might value that person very differently from a funded AI company whose next product release depends on making the right hire.
For one, that engineer is an important addition to the team. For the other, they could be the difference between shipping a product and missing a critical commercial milestone.
The second business isn’t ignoring the market. It’s assessing the value of the hire against a completely different commercial outcome.
You might be offering a perfectly reasonable salary for your business and still be nowhere near competitive for that particular candidate. That’s uncomfortable, but understanding it before you start hiring is considerably better than discovering it after you’ve made an offer.
Are you paying for skills you actually need?
Everyone wants AI experience. But what does that mean for your business?
Do you need someone who has built and deployed AI models into production, scaled them and maintained them in a live environment?
Or do you need an excellent software, data or platform engineer who can help you build the infrastructure to make AI useful?
Those aren’t the same hire. And they don’t come with the same price tag.
There’s a difference between paying a premium for genuinely scarce expertise and paying that premium because you’ve written an unrealistic wish list into a job description.
Before entering a competitive market, businesses should be asking what they need this person to deliver, what experience is essential, and where they could afford to develop capability internally.
Otherwise, you risk competing for some of the most expensive talent in the market without a clear commercial reason for doing so.
Sometimes you have to decide not to compete
There’s a temptation when you lose a candidate to a higher offer to assume you need to increase your salaries.
Sometimes you do. But not always.
Matching a significantly higher offer can have consequences well beyond the individual hire. It can affect internal pay structures, team dynamics, future hiring budgets and what your business can sustainably afford.
Sometimes the right decision is to pay more. Sometimes it’s to walk away. Neither makes you a better or worse employer. The mistake is not knowing which one makes commercial sense for your business.
If another organisation is prepared to pay significantly more for the same individual, you need to understand why, and then decide whether matching that investment makes sense for you.
If the person is critical to your commercial plans, paying above your original budget might be entirely justified. If they aren’t, you may need to accept that another business values them more highly than you do.
And that’s fine. Not every candidate is worth winning at any price.
You don’t have to win every salary battle. But you do need to understand the ones you’re choosing to fight.
If you’re not going to win on salary, where can you win?
Every company talks about exciting projects, great culture, career development and flexible working. Candidates hear it constantly.
If you’re asking someone to turn down a significantly higher salary, you need a much stronger reason than that.
Will they own something meaningful? Will they have genuine influence over technical decisions? Will they get to build and ship products rather than spend months navigating internal approvals? Will they have access to leadership and a credible opportunity to progress?
And, importantly, can you demonstrate those things rather than just promise them?
A compelling opportunity can sometimes outweigh a higher salary. But the bigger the financial gap, the more compelling that opportunity needs to be.
And sometimes, no matter how good your proposition is, the money wins. That’s the reality of the market, and pretending otherwise doesn’t help anyone.
Understand the game before deciding how to play it
The lesson from a £120k offer being beaten by £240k isn’t that every business needs to double its AI salaries. It’s that businesses need to understand the competition for the people they’re trying to hire.
Who else wants this talent? What might those businesses be prepared to pay? Why would the candidate choose you? And, perhaps most importantly, do you need to compete for that particular profile at all?
At SR2, we believe these conversations need to happen before a search begins, not after an offer falls apart. What does the business actually need? What is that talent worth to them? Who are they competing against? And how far are they prepared to go?
Because the question isn’t whether £120k or £240k is the right salary.
It’s whether you understand why someone else is prepared to pay twice as much as you, and what you’re going to do about it.
