Seriously though, it's been making things tough. We've really had to step up our game lately to make compelling arguments. Luckily, we have some advantages over those guys, like being able to push code live to millions of people with pretty much no bureaucracy.
Play against their giant corporate structure. They can't adapt and be flexible, but you can. You might not be able to match their salary + bonus, but you can do other things. How about giving your employees more vacation time? A lot of them are not living in the same town as their family, they will value having time to spend with family, or to travel. Google has what? 3 weeks of time off? Give them 6 if you can. Pitch it as, "sure you can make all that money, but will you have time to spend with you kids or to travel?"
Also, let some people work from home if possible. Let them keep flexible hours, make 11 to 3 core hours and let people come in early or leave late ... It is stuff that might take lots of red tape in large companies.
By "does this already", rdouble probably meant: work from home, flexible hours, etc.
More vacation time in lieu of salary may also be a tough sell: Google allows up to several (3? 6?) month of unpaid personal time off, making it pretty easy to trade salary for vacation "on demand".
So no 6 weeks starting up then. Yes he might have meant 'work from home' and 'flex hours' but the main point was extra vacation time.
I think it appeals to younger people as they like to travel, and many probably live away from their parents and friends, and it appeals to developers that have children, as they would like to more time with their family, and most importantly, that time is not arbitrarily convertible to cash.
Sure Google would let them take unpaid time off, but paid time off is even better.
The main point is that Google being a large company it is harder for it to adjust and make changes. That vulnerability should be exploited and taken advantage by smaller startups.
Seriously though, it's been making things tough. We've really had to step up our game lately to make compelling arguments. Luckily, we have some advantages over those guys, like being able to push code live to millions of people with pretty much no bureaucracy.