There are many reasons why it’s attractive to join a startup, from the greater autonomy to the opportunity to work on something that makes a difference. A recent study from the University of Illinois at Urbana-Champaign suggests that money is pretty low down the list of motivating factors for STEM Ph.D.s.

The researchers wanted to explore what might prompt a highly sought-after engineer to overlook jobs at prestigious organizations in favor of a riskier startup, often on lower pay. The study found that for many engineers, this lack of pay isn’t an issue.

“A key insight from our research is that many high-ability scientists and engineers choose jobs in early-stage startups over large tech companies due to specific career preferences that align better with the unique work setting offered in startups,” the researchers explain. “Many of these individuals are interested in being startup employees rather than founders, which differs from the popular notion that it is primarily aspiring entrepreneurs who choose to work in startups.”

Non-monetary gains

The researchers used survey data covering around 2,000 STEM Ph.D.s over the course of a decade. The data included things like the career preferences of each student while they were at school, and then the jobs they went into upon graduating.

“High-ability graduates in startups earn roughly 20% lower pay than their peers in established firms,” the authors explain. “This suggests that for these individuals, the non-financial benefits of startup employment outweigh the lower levels of pay and resources compared to established firm employment.”

When the researchers dived further into the data, it emerged that graduates were extremely motivated by the opportunity to work on the latest technologies, while also being given a lot of autonomy to do so. Indeed, so strong is this pull that the researchers found that many startups could cherry-pick the best applicants, meaning that the typical startup employee was of a higher caliber than those at an established firm.

Getting talent

The researchers believe that their findings should provide insight for founders to help guide them in terms of attracting and retaining the talent they need to develop their businesses.

“Although these individuals appear willing to ‘pay’ to work in startups, this does not necessarily come ‘free’ to their employers. Rather, some of the features that attract workers to startups—such as autonomy—may need to be managed carefully and may involve costs of their own,” they explain.

The flip side is that scientists considering a career in the startup world, may have to make do with lower pay in return for the non-financial benefits that the career gives them.