What are the best benefits packages for a start up company?
I want to stay competitive and attract top caliber talent, but don't have a huge budget for bonuses as of right now. How do I create a happy medium without breaking bank?
In my experience as a business owner and now as a Business Performance Advisor, I would tell you that there are wonderful opportunities with PEO's in our country. utilizing the co-employment model would allow a small group access to the same benefits offered by larger firms. Small groups tend to be charged more money and sometimes it is not possible to afford these benefits on your own. I work with start-ups and companies that range in size from 8 -150 employees. And as companies grow, the need for HR becomes more apparent as the guy that builds the best widgets in the country but has no HR training...he soon finds himself in the position of having to give less time to his widgets and more time to the HR piece.
also add quirky perks. say you have coders, add a free Udemy.com class, or free cokes always
and bring in pizzas if they work past 5pm for a crunch time deadlines
or a field day out to a ball game..builds the team and is fun.
add a ping pong table to the break room.
I love the fact that you asked this question! I do work for a wonderful HR outsourcing firm that offers low-cost benefit plans and insurance brokerage, however as an HR Manager from the millennial generation, I have voluntarily (many times subconsciously) done extensive research on what small, or even larger, companies can offer to attract and retain the best talent in todays workforce on a smaller budget. I am not going to bore everyone with a story of my background, but a piece of it seems relevant. I became so interested in this topic, and probably HR in general, while I was working in retail management just out of college with a business degree and no clear path as to what I wanted to do with it. During that time, I can clearly remember a company full of over-worked and underpaid employees, including myself. Yet, oddly enough, we were all happy! There was no bitterness, no growing resentment, no calm before the storm of "I quit!". I realize now that my manager had used a very informal idea that grouped his managers and employees into four colors based on personality, which came simply from his own observations. It turned out he was spot-on. I do not remember the entire methodology, however I do know that he categorized me as being very "blue", which meant that having fun at work and being social were more important to me than money (green personalities).
Long story even longer: I guess my point here is that many of the best candidates in Gen Y will be looking for benefits that will not burn a hole in your pocket. Instead of bonuses, try extra time off or company outings. Believe it or not, recognition plaques and the like (very budget-friendly) mean more to these young and career-driven individuals than you might think!
A study conducted by Decision Analyst highlights the need for legal plans. "Nearly 90% of Americans say they don’t have any form of legal insurance or legal protection service that could make getting qualified legal help easy and affordable." The findings continue, "More than 60% reported they would be interested in purchasing legal protection."
You got a lot of good advice. I noticed you are in MA. It may be tricky to hire 1099's in MA or other states, you have to be careful because those people may not be 1099's and it could cost you more than you plan. As far as benefits go it may make a difference of who your workforce is. Some folks want/need wages, others may want health insurance etc. Your best bet may be to meet with some folks who are in the benefits/HR etc. business and review your situation.
Good Luck. Feel free to reach out to me
John Elcik is correct. In the first instance if you are working with a small start up capital then look to bring on temp to perm staff. To begin with there can be many more benefits being self employed from a financial perspective, so there's your first hook. Just be sure to agree a turning point from when they turn from contractor to full time employee's.
The other option is flexibility. Depending on what business you are about to launch what appeals more and more to employees these days is the ability to work flexible hours or from home on occasions. This will open your potential talent pool up to a much wider audience. Again especially those who perhaps have taken time off to raise a family and are looking to get back to work.
The other option you have is share options. Set financial targets for the business and highlight clear objectives that need to be reached. Upon achieving this over an agreed period of time show them how they can reap the rewards.
Most of the above are tools that I have personally utilised and met with success. However, which ever path you choose, these only work providing your audience can emotional buy into the business as well as the owners that are driving it.
If your potential employee can't see opportunity or the potential your business truly has then it will fall on deaf ears and you will end up having to sacrifice the quality of your employees. And as a start up business that is the very last thing you will want to do. As without the right team supporting you, you can't deliver on your vision.
If you are looking for a long-term employee retention, then probably you should consider giving some employee shares so that it would not only increase motivation but also productivity. if this is not in the larger scheme of things then short term employee benefits which are packaged in welfare and monetary terms will be great. e.g. include insurance, contribution to pension, parental leave etc.
Depends on how raw a start up and how young you want your employee population. The less resources and the younger your population, the more you go with base salary plus some form of at risk compensation. If you with more experienced people early in their career, then education reimbursement is only used by 5% of the population but it tends to draw high quality candidates.
You could choose to give bonuses to only top performers and include open communication as part of your strategy - spell it out that bonus he's will be earned and not simply a given. Consider profit sharing as motivator as well.
Begin with the end in mind. If being competitive and attracting top talent are your goals, consider what the competition is doing and find a way to top it. Paying a bonus based on individual as well as team performance is worth considering. At the same time get creative and find one or two other perqs that will differentiate you from the competition. For example, consider such things as no-fault time off, day-care for employees' children, employee get-togethers, etc. Money is not everything. Make sure that your management team is well-trained in leadership and employee motivation. Most people decide to leave a company because they don't like their boss, not because of money.