I, perhaps like you, had spiralled into a doom-pit of misery, convinced that AI is going to replace the human race. Journos, your Uber driver, Politicians are all convinced. Though I now vehemently disagree, and I am a part of a growing minority, with data to boot.

I think we are standing on the edge of unprecedented growth and demand for human labour. Right now, the top percentage of talent is fiercely in demand and becoming more and more expensive. This is a signal. It is not the end state. Software is rapidly becoming democratised. Barriers to entry are collapsing. We are about to see millions of new companies enter the market, and when that happens, the demand for human operators will explode (requiring a completely rebuilt recruitment system as well).

Until the rest of the market catches up, companies are caught in a worsening bidding war over today’s top performers. A “middle-of-the-pack” candidate today knows how to use standard tools to do their job. An “elite” candidate uses AI to build custom workflows, automate tasks, and 10x output. That delta in AI fluency is exactly why one person is suddenly worth literally three times the salary of their peers.

Recent data from Paraform paints a picture:

  • The top 12% of candidates now capture more than 25% of all extended offers.

  • The top 10% of engineers earn roughly three times what the bottom 10% earn for nominally the same title.

  • In 2024, fewer than 4% of engineering roles offered US$300,000 or more.

  • Today, that share has rocketed to over 21%. One in five engineering roles is now competing at a salary level previously reserved for the rarest of unicorns.

“Staff engineer” and “member of technical staff” postings are outpacing every other engineering title. Roles paying US$400,000 or more, which barely existed two years ago, now hit the market weekly. “Companies aren’t hiring fewer people because they’ve run out of work, but instead because they’ve decided the marginal “good-enough hire” isn’t worth what they used to pay for it, and the exceptional hire is worth substantially more” – Paraform CEO, John Kim.

You might think these $400k salaries are just big tech companies fighting each other. That’s true. Though the talent pool is being squeezed from a completely new participant.

Elena Vern, head of Growth at Dropbox, recently pointed out that for decades, creating software required a highly specialized group of people in tech hubs backed by VC money. Now, “as the cost and complexity of building collapse, that constraint disappears,” she noted. “The winners won’t just be faster developers. They’ll be teachers, real estate agents, accountants… solving problems they understand deeply.” She calls it “Mom-and-Pop SaaS.”  I am seeing this firsthand. A whole new channel of traditionally non-tech companies like real estate agencies, law firms, family offices and solopreneurs are reaching out to hire people to help them build new products, software and entire companies. Subject matter experts who now have the ability to build exact market solutions very quickly… 

I have been quite surprised at the amount of great candidates who are interested in teaming up with these new builds too. Near total control, flexible hiring contracts, fast pace, new challenges and great salaries.

So, now we have a hospital competing for the same talent pool as the tech giants. Not just engineers but AI skilled people across all divisions.

This surge in company creation and in-house building completely shatters the myth that AI will result in mass human redundancy. Last weekend, Bezos agreed; “AI is going to create a labour shortage because it’s going to make it possible for people to identify more problems.”

Mohamed Kande, global chairman of PwC, recently showed how companies adopting AI “at scale” are actually increasing their headcount to support that adoption. The CSIRO recently confirmed this too, finding that firms adopting AI are posting 36% more jobs.

Unemployment is falling across the US and Australia. We are both currently sitting comfortably within “Full Employment” range at 4.3% & 4.4% respectively. If it was a few clicks higher there could be labour supply to meet the rising demand. Though it’s not, and we all know what low supply does to prices. Compound this with a developing exodus of top talent walking out of great companies and into the (burgeoning) Australian VC ecosystem, raising $5M without writing a line of code… it’s no wonder the price of top% talent is surging. AI doesn’t eliminate the need for people; it expands the scope of what a business can realistically achieve, which in turn requires more, great people to execute the new vision.

The candidate who will become extinct is the candidate who doesn’t leverage AI (excusing Hospitality, Nursing, Artists etc). The current chasm in the market only exists because AI tools still require a certain level of technical curiosity. But as apps become cheaper, token costs drop and AI becomes frictionless, the “middle” of the market will rapidly upskill. As Jae Lubberink of Eucalyptus rightly pointed out at Blackbird’s Sunrise – “AI has lifted the floor.” And that floor will keep rising… When the barrier to entry drops, and 1 million new Mom-and-Pop SaaS companies flood the market, the sheer volume of human labour required to run the global economy will be staggering.

Where next?

You cannot hire for this new reality using an old playbook. Yesterday’s Job Descriptions and keyword-matching are a waste of time. And time wasted = more expensive hirers = missed commercial opportunities. It’s been truly been invigorating having conversations with the market around how Talent Engineering is turning recruitment proactive.

The companies that embrace this new approach won’t just survive the labour shortage, they will dominate their markets.