Startups Winning via Benefits

March 10, 2011

Internet startups across Silicon Valley are struggling to compete for talent amid the investment frenzy gripping Facebook, Twitter, and Zynga, with many smaller companies beefing up pay and recruiting and wading into the private-company share market to keep pace with larger rivals.
College graduates in startup-saturated San Francisco are now given salary-and-bonus offers anywhere from $100,000 to $150,000. This obviously makes it very difficult for others to compete and startup recruitment becomes a nightmare. So how do you counter that? By appealing to those who aren’t completely money-motivated. We live in a stressful world as it is – why not work for someone who helps take the load off your personal and professional lives. Work-life-balance matters these days and the right benefits can trump many a compensation package.

Glamorous perks now run wild and you can find some incredible stuff out there: onsite child care, healthcare premiums fully paid for, telecommuting options, free massage therapy, cash rewards for hybrid car purchases, fully paid sabbaticals, the list goes on! There’s nothing better than doing what you love at a place that “gets you” and is willing to accommodate your lifestyle. There’s something for everyone really. I’m obsessed with traveling (32 countries and counting) so unlimited vacation days at startup Tagged would be a dream!

Despite a struggling economy, several people still value certain liberties over pay. 1600 managers and employees in the United States, Germany, Australia, and the United Kingdom were recently surveyed and some mind-blowing discoveries were made. Almost 80% of survey participants ranked being trusted to manage their own time and internet use higher than their job title and salary. On top of that, 20% went so far as to say they’d reject a position that would not allow them to access personal email and Facebook during work.

So if you’re starting a company and can’t top six figure salaries to college graduates, find out what matters to the people you want to hire. Hiring competitive, sports-minded sales folks? Make floor seats to the Celtics game available to the top billers. Looking for highly academic employees? Make sure a robust tuition reimbursement plan is in place. Only you can determine what makes the most sense in your environment.

That all said, none of this should provide you with an excuse or reason to deliberately skimp on paying fairly for top talent. If you manage to get a rock star at a discount, it’s only a matter of time before he/she heads for greener pastures, so try not to pat yourself on the back too soon. Employee retention is a never-ending battle after all. I’m not saying you need to blow the bank, but at the end of the day, if you pay peanuts, you will get monkeys.

Director of Recruiting

Victor Mahillon is the Director of Recruiting at <a href="http://kamcord.com">Kamcord</a>. Previously he was a Talent manager at OpenView.