LC037: Incentivizing Early Stage Employees

launchpeer - July 17, 2018

Today’s question:

Today’s question comes from Lindsay. What kind of benefits can I offer my earliest employees? I can’t offer health care, a lot of time off, or a large salary. What are some things I can offer them on a limited budget?

Jake’s answer:

It’s definitely hard when you are first starting out to hire employees and you don’t have a lot of money to pay them what they could be getting paid elsewhere. Paychecks may not be steady, there’s a lot of inherent risk in joining a seed stage startup, and they will probably make 30-40 percent less than they would at a large company.

Here are a few things I did early on:

Your first employees don’t have to be top of the industry

You should try to hire the best possible person for the job. But you don’t have to try to hire someone who has 20 years of experience or who have worked at Google, went to Harvard, etc. They could be good people for your C-Level hires, but you don’t need that initially.

You are looking for the diamond in the rough. They should love the idea of working for a startup – the environment and idea should excite them.

Benefits you can Provide

Flexible work schedule/environment – Let them their own hours. Make sure everyone understands what’s acceptable, but give them the flexibility to work how they work best.

  • PTO – If you are a service based company who needs people in the office at specific times, be sure to have a liberal PTO policy. Don’t make them stress about taking time off.
  • Work From Home – If people can get their work done, it shouldn’t matter where they work from. If they want to work from home a few days a week then you should let them.
  • Let them be Involved – Keep an open door policy. Keep the early stage employees up-to-date on what you are working on and let them be part of the growth. Let them know how the company is doing – be transparent about where the company stands.
  • Health Insurance + 401k – The 401k doesn’t cost a ton of money to get started and not everyone opts in, so it can be manageable as long as you’re small. Same with insurance. It is attainable as long as you are small. It’s worth it to talk to someone to see how much these things would cost you.
  • Company Culture – Act like a family. Be open and accepting. Play up your company culture and show them how much they mean to the company as an early stage employee.

Don’t think you can’t compete for the best employees. The best ones will be those who love what they do and aren’t looking at the paycheck.

Don't think you can't compete for the best employees. The best ones will be those who love what they do and aren't looking at the paycheck. Click To Tweet

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