As a serial entrepreneur, I know how hard it is to find the right talent at the right budget. One of the most common challenges that startups and small businesses face is hiring employees that won’t cost a lot of money. To compete with big companies, you need to create a compensation package that can attract and keep the best talents out there.
Attracting and retaining top talents is crucial because according to CB Insights, 23% of startups fail for the reason of not having the right team. As a small business owner with a limited budget, it can be a challenge to recruit great candidates. But this doesn’t mean that you have to settle for second best. You can create a good compensation package that has a lot of value without having to spend a fortune.
Here are some tips on how to attract and keep the best talents on a startup budget.
By the year 2020, 50% of the U.S. workforce is expected to be made up of Millennials. Paid leaves are probably one of the most desirable benefits for them as they travel so much these days. Although paid vacation is not mandated by law in the United States, private companies offer them to entice the best employees.
Netflix, for instance, offers unlimited parental leave for their employees. While you don’t have to offer the same leave benefits, you can still make this work for your startup.
If your company is not based in the U.S., you should check out first the minimum annual leave offered in your country. Then, you can offer more paid leaves that are granted sooner than the usual probationary periods.
There are a number of ways to do this. You can motivate your employees by giving them performance-based bonuses. You can offer cash incentives or salary increases for good work performance or for hitting the target KPIs. This is a win-win solution for you and the employee as they will be motivated to do better at work. In return, good work performance can make an impact on your company’s success.
Another thing to do this is to ask your employees if they have any preferred bonus program. This way, you can make sure that you’ll offer them what they really want.
Other notable companies offer special incentives and stipends for their employees. Facebook gives $4,000 in “baby cash” to its employees who have a newborn. Airbnb, on the other hand, offers $2,000 stipend per year to travel and stay in an Airbnb listing in any parts of the world.
Most startups offer equity to their workers. It makes sense to offer an employee a piece of the pie so that they are motivated to work. Even if their salary is low, they will still be motivated because they know that they’ll share the company’s success because they’re also shareholders.
According to The Nordic Hub Blog, employees who own company equity work eight more hours per week than those who don’t. You can have an agreement on when it’s okay to sell their shares if you want to protect your business.
Career growth and development are very important for job candidates and employees. Most employees are interested in investing in their careers to work their way up the corporate ladder. You can encourage them to enroll in training programs related to their job and reimburse the expenses. You can also offer in-house training and mentoring programs.
Aside from these, you can also encourage them to enroll in any well-being, leisure, and hobby courses like what Evernote is offering their employees. They host classes ranging from presentation-giving, to coffee brewing, to the art of calligraphy. Combining work and pleasure surely sounds fun for anyone!
Attracting the best candidates and retaining them is possible even for startups with a limited budget. You can offer absolutely anything to give your employees a competitive compensation package.
One of the principles that Laszlo Bock shared about how Google recruits is you should “Give candidates a reason to join in.” The right formula here is to make sure that what you offer is beneficial for you and your employees.
Most importantly, don’t make promises you can’t keep.