7 ms·

I'd argue that being less generous with benefits is a good filter for hiring candidates that are genuinely interested in what the startup's doing (which is cruc

I'd argue that being less generous with benefits is a good filter for hiring candidates that are genuinely interested in what the startup's doing (which is crucial in early employees) rather than somebody who's just looking for another job, like the author. Edit: To clarify, there is huge difference between offering no benefits and offering fewer benefits than a large company. I'm not advocating treating employees like crap. I'm saying that there is a potential benefit to startups who don't try to compete on monetary benefits. Startups should provide as many benefits as possible, but not worry about competing with the financial packages that a large company can provide. Also, if you disagree, please give your reasoning below. Downvoting to show disagreement just seems lazy.

kevingibbon 14y ago
If your startup is well funded you should offer these benefits. You should want to reward the people who work so hard for you. These benefits also make an employees life easier, giving them more time to spend on your precious startup. There are other ways to weed out the "another job" candidates.
- Mamady 14y ago
  These are not "another job" candidates. These are A grade candidates who are not desparate enough to take any lame offer they get (unlike recent grads with little experience). When someone in the valley says "there is a shortage of talent", what they really mean is... there is a shortage of "talent willing to work for a pathetic salary".
avenger123 14y ago
This is a good point, so why not just come out and say it! I see a lot about how these start-ups state "competitive salary, great compensation, etc." Instead, just say, "hey, we will pay you crap but come work for us anyway because you believe in our idea." Somehow, I don't think that would get traction, when its put that way.
- dinkumthinkum 14y ago
  You might want to add "... and you think we are cool personalities and you want us to get rich of the back of your labor." :)
argonaut 14y ago
I call BS. Sure, you could spin it that way. You could also spin it the other way: a startup that doesn't offer benefits doesn't care about making their employees' lives easier, and thus not offering benefits is a negative signal to potential employees.
- guptaneil 14y ago
  Just because a startup doesn't offer lots of monetary benefits doesn't mean it doesn't respect its employees. Generally, the advantage of a startup is that you get far greater independence and autonomy than in a large corporation. You have to personally weigh what matters to you more: money or independence. My point was that startups should favor employees who want independence more than money because as it has been said above, being an employee at a startup is a losing proposition. At least the startup will have optimized for hiring people that are ok with that.
  - aplusbi 14y ago
    You just pointed out why your argument fails - it's a poor indicator. A company that doesn't offer lots of benefits may or may not respect its employees. Likewise an employee willing to accept a below-market offer may or may not be committed to the vision.
    - coldtea 14y ago
      >Likewise an employee willing to accept a below-market offer may or may not be committed to the vision. What vision? I thought we are all professionals working for the money. It seems bleeding edge capitalism forgets the "free market" and "egoism turns out for the best" and resorts to idealism and religious-like "visions" for the company -- in order to have fools work for less than they could.
      - aplusbi 14y ago
        Uh, I'm not sure why you're responding to me as my point was that offering below market salaries to try and get "good" employees is a stupid idea. That said, most people don't work solely for money and I'm sure you don't either. If they did, then everyone would want to work on Wall Street.
granitepail 14y ago
Taking away benefits to see which candidates are the "hungriest" seems lazy - and unethical - to me. It's not easy to source good candidates, but it seems completely backwards to find the best, most driven candidates possible through a method that, in the end, deprives them of something you could easily deliver. I've worked with companies who have a 1-month "escape hatch" on-boarding plan, wherein either the employer or employee can terminate the agreement no-harm-no-foul if expectations are not aligned. This is obviously more of a social agreement, as most companies use at-will employment contracts. This way, you can still treat your employees right.
- vacri 14y ago
  It's funny, really. Coming from an OH&S perspective, you want good OH&S not just because it's nice, but because losing a worker is expensive - rehiring, retraining, refamiliarising (it always takes a new employee time to learn the ropes). Scrooging people on basic benefits seems to be in the same bucket as scrooging them on OH&S - saves money in the short term but is overall more costly.
michaelochurch 14y ago
Health insurance is non-negotiable and shouldn't have an employee contribution. The rest of the benefits are more negotiable. 401k becomes important in your 30s when you start realizing that you're not going to be young forever. Conference budget is a nice-to-have but conferences shouldn't come out of your vacation-- that's a fuck-you if they do. Regarding compensation: the total package should be enough that people don't worry about money. Ever. If you're doing your job, you may not make them rich but you pay enough that people aren't worried about daily living expenses. The issue here-- why benefits are so important-- is that VC-istan startups are in such a state where the concerns of a 45-year-old with kids are seen as freaky and unusual. There's a very large talent pool that's being overlooked.
- danielweber 14y ago
  God, you reminded me of a start-up where the independently wealthy CEO kept on bitching out loud in the office, three years after the fact, about early-round employees that demanded health insurance (but were willing to work for peanuts).
- bearmf 14y ago
  Lost of large companies have employee contributions. No-premium health insurance is not a standard benefit outside of a few technology companies.
- wyclif 14y ago
  "There's no shortage of smart, hardworking engineers. There's a shortage of smart, hardworking engineers willing to work for very little money." ~ David "Pardo" Keppel
deleted 14y ago
[deleted]
mikeash 14y ago
Why concentrate on benefits. Being less generous with everything is a good filter for hiring candidates that are genuinely interested in what the startup's doing! Pay your employees poorly, and you're guaranteed to only get the ones who really believe in your company. You're virtually guaranteed success, right?
- guptaneil 14y ago
  If you take any comment to its absolute extreme, it will stop making sense. If you consider my comment from the more reasonable stance that startups have limited resources compared to large companies and come with extra risks for employees, the fewer benefits can be valuable for dissuading people who might not otherwise be good culture fits. For example, a 45 year old father who might be screwed if the startup shuts down 2 months later probably should not be applying to startups. However, a young recent college grad will have a much easier time bouncing back if the startup shuts down, simply because she has fewer responsibilities than the father. As a result, a lot of those benefits that the father is looking for are also less important to the recent college grad. Of course, the startup should give the best possible benefits it can afford. But I don't see anything wrong with the startup focusing its limited resources on finding the employees that are better fits.
  - mikeash 14y ago
    Funny, I didn't think that was even remotely an extreme. An extreme here would be something like, "Charge people money to work at your company, that way you only get the most extremely dedicated." Simply paying less salary in addition to giving fewer benefits seems like an extremely minor extension. There's nothing wrong with paying less because your resources are better placed elsewhere. I just don't buy the idea that paying less gets you better candidates. Sure, it might filter, a little bit, for people who really care about your business. But it's also going to filter, a lot, for people who can't get better jobs elsewhere.
dinkumthinkum 14y ago
This is exactly what's wrong with many tech startups and what makes caricatures of them. You're view is to be a stingy miser and just believe that you will be filtering out those that want to exchange work for money (what a horrible idea in a capitalist economy). So you get the kids that do understand what equity means or what "vesting" means or "at will" employment means that are excited, they burn off a couple years of their 20s not realizing that even if this supposed great idea was successful that they basically get nothing anyway, and you're arguing that is the proper way to be? It's hard to argue the economics of that for your favor .. but you can see how unsustainable that would be if all the founders felt the way you did and the works ... gasp .. actually figured this out. I think there have been a few events in history that have occurred during such realizations ... something about October? ... :)

kevingibbon 14y ago

If your startup is well funded you should offer these benefits. You should want to reward the people who work so hard for you. These benefits also make an employees life easier, giving them more time to spend on your precious startup. There are other ways to weed out the "another job" candidates.

Mamady 14y ago
These are not "another job" candidates. These are A grade candidates who are not desparate enough to take any lame offer they get (unlike recent grads with little experience). When someone in the valley says "there is a shortage of talent", what they really mean is... there is a shortage of "talent willing to work for a pathetic salary".

avenger123 14y ago

This is a good point, so why not just come out and say it! I see a lot about how these start-ups state "competitive salary, great compensation, etc." Instead, just say, "hey, we will pay you crap but come work for us anyway because you believe in our idea." Somehow, I don't think that would get traction, when its put that way.

dinkumthinkum 14y ago
You might want to add "... and you think we are cool personalities and you want us to get rich of the back of your labor." :)

argonaut 14y ago

I call BS. Sure, you could spin it that way. You could also spin it the other way: a startup that doesn't offer benefits doesn't care about making their employees' lives easier, and thus not offering benefits is a negative signal to potential employees.

guptaneil 14y ago
Just because a startup doesn't offer lots of monetary benefits doesn't mean it doesn't respect its employees. Generally, the advantage of a startup is that you get far greater independence and autonomy than in a large corporation. You have to personally weigh what matters to you more: money or independence. My point was that startups should favor employees who want independence more than money because as it has been said above, being an employee at a startup is a losing proposition. At least the startup will have optimized for hiring people that are ok with that.
- aplusbi 14y ago
  You just pointed out why your argument fails - it's a poor indicator. A company that doesn't offer lots of benefits may or may not respect its employees. Likewise an employee willing to accept a below-market offer may or may not be committed to the vision.
  - coldtea 14y ago
    >Likewise an employee willing to accept a below-market offer may or may not be committed to the vision. What vision? I thought we are all professionals working for the money. It seems bleeding edge capitalism forgets the "free market" and "egoism turns out for the best" and resorts to idealism and religious-like "visions" for the company -- in order to have fools work for less than they could.
    - aplusbi 14y ago
      Uh, I'm not sure why you're responding to me as my point was that offering below market salaries to try and get "good" employees is a stupid idea. That said, most people don't work solely for money and I'm sure you don't either. If they did, then everyone would want to work on Wall Street.

granitepail 14y ago

Taking away benefits to see which candidates are the "hungriest" seems lazy - and unethical - to me. It's not easy to source good candidates, but it seems completely backwards to find the best, most driven candidates possible through a method that, in the end, deprives them of something you could easily deliver. I've worked with companies who have a 1-month "escape hatch" on-boarding plan, wherein either the employer or employee can terminate the agreement no-harm-no-foul if expectations are not aligned. This is obviously more of a social agreement, as most companies use at-will employment contracts. This way, you can still treat your employees right.

vacri 14y ago
It's funny, really. Coming from an OH&S perspective, you want good OH&S not just because it's nice, but because losing a worker is expensive - rehiring, retraining, refamiliarising (it always takes a new employee time to learn the ropes). Scrooging people on basic benefits seems to be in the same bucket as scrooging them on OH&S - saves money in the short term but is overall more costly.

michaelochurch 14y ago

Health insurance is non-negotiable and shouldn't have an employee contribution. The rest of the benefits are more negotiable. 401k becomes important in your 30s when you start realizing that you're not going to be young forever. Conference budget is a nice-to-have but conferences shouldn't come out of your vacation-- that's a fuck-you if they do. Regarding compensation: the total package should be enough that people don't worry about money. Ever. If you're doing your job, you may not make them rich but you pay enough that people aren't worried about daily living expenses. The issue here-- why benefits are so important-- is that VC-istan startups are in such a state where the concerns of a 45-year-old with kids are seen as freaky and unusual. There's a very large talent pool that's being overlooked.

danielweber 14y ago
God, you reminded me of a start-up where the independently wealthy CEO kept on bitching out loud in the office, three years after the fact, about early-round employees that demanded health insurance (but were willing to work for peanuts).
bearmf 14y ago
Lost of large companies have employee contributions. No-premium health insurance is not a standard benefit outside of a few technology companies.
wyclif 14y ago
"There's no shortage of smart, hardworking engineers. There's a shortage of smart, hardworking engineers willing to work for very little money." ~ David "Pardo" Keppel

deleted 14y ago

[deleted]

mikeash 14y ago

Why concentrate on benefits. Being less generous with everything is a good filter for hiring candidates that are genuinely interested in what the startup's doing! Pay your employees poorly, and you're guaranteed to only get the ones who really believe in your company. You're virtually guaranteed success, right?

guptaneil 14y ago
If you take any comment to its absolute extreme, it will stop making sense. If you consider my comment from the more reasonable stance that startups have limited resources compared to large companies and come with extra risks for employees, the fewer benefits can be valuable for dissuading people who might not otherwise be good culture fits. For example, a 45 year old father who might be screwed if the startup shuts down 2 months later probably should not be applying to startups. However, a young recent college grad will have a much easier time bouncing back if the startup shuts down, simply because she has fewer responsibilities than the father. As a result, a lot of those benefits that the father is looking for are also less important to the recent college grad. Of course, the startup should give the best possible benefits it can afford. But I don't see anything wrong with the startup focusing its limited resources on finding the employees that are better fits.
- mikeash 14y ago
  Funny, I didn't think that was even remotely an extreme. An extreme here would be something like, "Charge people money to work at your company, that way you only get the most extremely dedicated." Simply paying less salary in addition to giving fewer benefits seems like an extremely minor extension. There's nothing wrong with paying less because your resources are better placed elsewhere. I just don't buy the idea that paying less gets you better candidates. Sure, it might filter, a little bit, for people who really care about your business. But it's also going to filter, a lot, for people who can't get better jobs elsewhere.

dinkumthinkum 14y ago

This is exactly what's wrong with many tech startups and what makes caricatures of them. You're view is to be a stingy miser and just believe that you will be filtering out those that want to exchange work for money (what a horrible idea in a capitalist economy). So you get the kids that do understand what equity means or what "vesting" means or "at will" employment means that are excited, they burn off a couple years of their 20s not realizing that even if this supposed great idea was successful that they basically get nothing anyway, and you're arguing that is the proper way to be? It's hard to argue the economics of that for your favor .. but you can see how unsustainable that would be if all the founders felt the way you did and the works ... gasp .. actually figured this out. I think there have been a few events in history that have occurred during such realizations ... something about October? ... :)