Why hiring and keeping top talent for your startup or small business may not be as expensive as you think.
Like many small businesses owners, Chris Post, founder and C E O of the Sacramento, California-based firm Post Modern Marketing, can’t afford health insurance or a retirement plan for his 10 employees. To compensate, he gives them something money can’t buy: complete freedom to work when, where and whatever number of hours they choose, as long as they get their work done.
The flex-time policy has had an impact on Post’s employees, he says. They’re noticeably happier and work is still getting done. “I haven’t had an issue with anyone taking advantage of it, because productivity is a very simple benchmark,” says Post. “Are you getting your work done: yes or no? If not, there’s a problem. Otherwise, we’re all good.”
All companies, regardless of size, are required to pay certain employee benefits, including social security taxes, unemployment insurance, worker’s compensation and, in some states, disability insurance, according to the U.S. Small Business Administration. But non-required benefits typically offered by large corporations to entice and hold onto top talent (think: pricey health insurance and 401(k) plans) are often out of financial reach for small businesses and startups. This means smaller companies have to find other ways to recruit and retain great employees.
The good news? Roughly four out of five employees surveyed in 2015 by Glassdoor, the job search and review website, said they prefer new or additional benefits to a pay increase. Here are a few that employees love, without the steep price tag.
Give them time — it’s what they want.
When Glassdoor asked people which benefits they prefer over a pay raise, three of the top six answers related to time: paid time off (37 percent), paid sick days (32 percent), and a flexible schedule (30 percent).
Some major corporations currently offer employees unlimited vacation time. A small business owner may not be able to afford more paid days than a large corporation, but the behemoths often have rigid time-off structures that separate traditional vacation, sick and personal days. Smaller companies have the advantage of allowing employees to use personal days however they’d like, says Holly Wade, director of research and policy analysis at the National Federation of Independent Business. “Small businesses are unique in that they can be more creative and a little less formal,” she says. “They can tailor time-off policies to the applicants they’re looking for.”
Eliminate the 9 to 5 workday.
Industries and jobs vary greatly, and some employees simply have to work in a certain place at a certain time. But to the extent possible, allowing employees to adapt their schedules — whether it’s flex time or telecommuting — to create the work-life balance they crave can be a real selling point for a small company. “Does everyone have to be in the office at the same time? Probably not,” says Christy Hopkins, a writer for FitSmallBusiness.com who also runs her own human resources consulting business. “Try implementing bandwidth hours, like 10 a.m. to 2 p.m., where everyone must be there, but then let the early risers work 7 a.m. to 3 p.m. and the late risers work 10 a.m. to 6 p.m.”
Test out a 4-day workweek during business lulls or summertime.
Summer hours, which often come in the form of half-day Fridays, can also be a huge hit with employees. Mickey Swortzel, the owner and CEO of Ann Arbor, Michigan-based New Eagle Consulting, discovered that four 10-hour days worked well for her company during the summer. “To make it work, we asked employees to partner with a co-worker, someone they can think through and overcome obstacles with. And we allowed some people to work a different, modified schedule,” says Swortzel. “It was a very low-cost benefit and much appreciated in Michigan, where the summers are short and the winters are long.”
Build a team culture and they’ll stay.
Strengthening office culture can also go a long way toward retaining good employees and relieving stress. “It’s about creating an enjoyable workplace — making it feel like, if you left, you would miss these people,” says Marilyn Scott, chair of the Portland, Oregon chapter of SCORE, a nonprofit that provides free mentoring and other services to small business owners. “The possibilities are only limited by how creative the group is.”
In general, any activity that involves free food and camaraderie is a team-builder, whether it’s happy hours or bowling or calling in lunch on a set day, every week or every month. But consider the diversity of your team when planning outside events, Scott says. A happy hour may work well for a tech startup team that skews young, but not for parents who have to pick up kids after work. “I’m not a big fan of company events that appeal to a certain group and not another. Golf outings are a good example,” says Scott, who spent 10 years at Intel and 14 years at the American Red Cross as a human resources manager. “Those activities don’t have to be under company auspices; some things will happen spontaneously.”
Perks that enrich employees pay for themselves.
Most employees want to develop professionally and intellectually. For businesses that can’t afford tuition reimbursement, Hopkins suggests a small stipend for education or enrichment. “Even $100 a year for spending on online courses or books can go a long way for an employee,” she says. The same goes for gym memberships and wellness programs. A small business owner who doesn’t have the funds to pay for a health club might consider providing fitness tracking devices to encourage physical activity or provide a $25 or $50 monthly fitness allowance.
Another affordable perk often offered by large companies is life insurance. Small businesses can also take advantage of group life insurance products. These policies may provide coverage for employees at a lower premium, even if the cost is passed along to the employee.
The bottom line: Every small business owner has to figure out what works well for the company and employees. After determining a budget, Hopkins suggests surveying employees to rank benefit options and write in suggestions. Not including employees in the process may result in some trial and error, says Hopkins, who recalls a Denver client who paid for pricey health club memberships for six months before discovering none of his 12 employees went. “He didn’t realize it’s very normal in Denver for rental apartments to have a gym, and most of his employees are renters,” Hopkins says. “Now, once a month, he has fresh fruit delivered and brings in a masseuse to do neck and shoulder massages. I don’t think anybody turns down a free shoulder massage.”