• October 26, 2015

How Startups Should Build Competitive Employee Benefits Packages

How Startups Should Build Competitive Employee Benefits Packages

An employee benefits package is easily one of the first offerings a founder has to consider when staffing up.

Some founders may have lucked out with a small loyal army behind them – an army that joined before benefits were even discussed. But, after a few months of hustling with a small team, a founder must begin to question which bare-bone benefits will keep that team in place and which nice-to-have benefits will go a step further to reward them.

Either way, it’s an extremely competitive time for tech and consumer startups. Many professionals, from dev., to IT, to PR, to sales, and general operations, are all in high-demand. In some startup communities, however, the supply side is locked up as many savvy companies are remaining competitive by simply becoming masters at creating the best benefits packages, workplace perks, and office environments, all driving candidates’ attention and employee satisfaction.

So how can you remain competitive? Ultimately, you need to map employee recruitment & retention efforts and budget to your forecasted business growth as best you can.

Here’s a general roadmap of best practices:

Cover the basics – Start by making sure your small staff knows you comply with all the expected offerings – unemployment, workers comp, and time off to vote or serve on a jury or in the military. This seems simple, but you already pay a base rate for salary employees so offer them holidays and a reasonable amount of time for paid vacation (1-3 weeks to start). The big six holidays include New Year’s Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving (and the following Friday), and Christmas. Other nice-to-have holidays like Columbus Day, Veteran’s Day, etc., are good times to impart extra time off for your team. Finally, figuring out insurance for your employees is important, even if you don’t cover the costs completely. Handling the logistics of signing up is a simple convenience that goes a long way.

Plot out your expansion plans and corresponding benefits – For each stage of growth you should expect and plan for an increase in employees. As you incur more staff members and simultaneously increase revenue (hopefully), you should invest more in their happiness. Your growth is likely a product of their great work, and they should be rewarded. Conduct a solid cost-benefit analysis to understand what specific benefits will provide you & your employees – whether it’s improved morale or better work-life balance which leads to better productivity, a great recruitment tool for your website, or perhaps a tax break for your business – you can apply some data analysis to the perk decisions you make.

Kick it up a notch – For businesses that are slightly larger and more established and secure in their roadmap, it’s time invest in perks & benefits. In today’s startup environment, employees hope their employer will offer not only fun office perks, but also handle fundamental benefits so they no longer have to worry about them (think 100% health & dental insurance, life insurance options, retirement, 401ks, commuter benefits, etc.). There are also many perks that don’t require much of the employer, but go a long way, such as making your office dog friendly or allowing employees to work from home occasionally, if/when appropriate. Other fun perks to consider: gym memberships, high-quality company swag like jackets or bags, Uber credits, concert or sporting event tickets for top performers, other performance incentives, etc.

Communicate clearly – Certain benefits are becoming popular but require a certain responsibility on the part of the employee. For instance, many companies are offering “unlimited vacation.” You must be extremely clear about the expectations you have for an employee taking vacation – such as, maximum time they can be away at once, not leaving their team members hanging when they are out, etc. The clearer you are about expectations, the less likely your intentions will be misunderstood.

Stay competitive – The options for perks & benefits are constantly increasing. You can literally find lists of 20+ perks on a startup’s “careers” page. You should conduct research to determine what startups your size and in your industry are offering. This doesn’t mean you should emulate your competitor, but it’s good to understand what you’re up against from a recruitment perspective, and to be able to describe your own offerings in a competitive way.

Get creative – Ultimately, your perks and benefits are an extension of your culture. If money is tight, come up with unique offerings that don’t require a lot of capital but bring big returns from a camaraderie and culture standpoint, such as group outings for team building, company wellness programs, weekly beer & learns, etc.

Don’t forget career development – Not all employees will care about free lunches or company swag if they feel like their career is stagnant. Create a culture where career development is prioritized and each employee feels like they have a path to learn more and advance. You can do this through monthly mentor meetings, monthly allowances for networking and educational courses, or even grad school reimbursement for long-term growth plans.

Poll your staff – While your company is small, why would you offer a benefit that is not needed or not wanted by your employees? Instead, poll your staff to understand what benefits and perks they love, which they don’t need, and which they would love to have. You can even segment the poll into expected and extraordinary perks/benefits to make sure you are meeting their expectations. This will also give you the opportunity to surprise them when you can afford to offer a perk that they don’t expect.

Perks and benefits are important and you need to make them a priority if you want to stay competitive in recruitment and employee happiness. It’s also important to be extremely pragmatic when choosing perks and benefits, ensuring they match the goals and budget you’ve mapped out for yourself at various sizes and stages of funding.

If you need a concise list of sample benefits by company size, inquire within at VENTUREAPP. We have a killer resource for our members. We can also connect you to perks & benefits providers and experts. Apply today.