Startups that are strapped for revenue should consider a strategy of offering benefits to enhance compensation and attract and retain employees.
Benefits represent a form of compensation in addition to an employee’s remuneration. Some types of benefits are mandated by the government, while others are provided voluntarily by the company. Offering company-sponsored benefits can prove an effective method of attracting and retaining employees.
Legislated benefits are mandatory—all employers must provide these employee benefits. They include:
While a significant cost, many startups have discovered that they must offer competitive employee benefits to attract and retain quality employees in spite of the significant costs. Defining the benefits package is a crucial business decision—it should not be a “one-size-fits-all” proposition. As costs continue to rise, any decision to provide benefits should consider a startup’s financial situation, the ability to contain costs and your employees’ demographics.
Non-legislated employee benefits come in many different forms and can range from basic to deluxe, with costs being very little to none, or high. They include, among others:
Do your research when developing a benefits package. A suitable and affordable plan must meet the unique needs of both your startup and your employees. Before making any decisions, investigate the following resources:
In general, the cost of employer-sponsored benefits is regularly estimated to add at least 15% to a company’s total compensation costs. To contain costs, many employers implement some or all of the following strategies:
Butteriss, M. (1999). Help Wanted: The Complete Guide to Human Resources for Canadian Entrepreneurs. Toronto: John Wiley & Sons. pp. 121-127.