Compensation and Benefits for Startup Companies

The Milestone Team March 17, 2024
compensation and benefits for startup companies

One of the most challenging parts of launching your startup or taking it to the next level is assembling the right team. While there are a variety of complexities surrounding your startup’s ability to attract and retain top talent, your compensation and benefits packages are often a significant factor. 

After all, money talks—loudly. If you don’t speak the language, even employees with the best of intentions will get restless. Fortunately, there are ways to fine-tune your compensation and startup benefits package without breaking your budget. In this blog, we cover the essentials of compensation and benefits and how outsourced HR for startups can help you optimize your resources.  

Do Start-Ups Pay Well?

Compensation and benefits for startup companies are significantly above average in the United States. Let’s take a closer look at the numbers. In 2024, Forbes reported that the average annual salary in the US is $59,428. According to ZipRecruiter, the average yearly salary for startup employees in 2024 is $87,849. That’s nearly 1.5 times higher!

However, the above numbers only compare salary. What about benefits? Do startups include sought-after benefits like health insurance and paid time off in their total compensation packages?

According to the US Bureau of Labor Statistics, 70% of private industry workers had the option to access work related health plans in 2022. This figure includes startups and small businesses, which often offer health coverage to stay competitive with larger organizations. Fortunately, there are companies—like Sana—who are dedicated to helping startups provide health insurance in their benefits packages.

Startups are also known for having additional benefits like flexible work schedules and the option for remote or hybrid models. For help optimizing what your startup can offer current and prospective team members, contact our experts at Milestone.   

Do Startups Offer Health Benefits?

Startups should offer health benefits to stay competitive in today’s labor market. Health coverage is one of the most important pieces of the benefits package for job seekers. In fact, Sana references a 2023 study that finds health insurance coverage outranks both retirement and leave benefits in popularity.

Health benefits for startups are a must-have if you want to attract highly qualified candidates. But how can you optimize your benefits packages if your HR and financial resources are already stretched thin? Outsourced virtual HR services could be the answer. These services, also called fractional HR services, provide as much or as little support as you need to blast through your strategic goals. 

Don’t waste your valuable time searching for a needle in the haystack. Count on Milestone to sort through the best health benefits for startups and find the right fit for your organization (and budget).

What Is a Good Benefits Package for a Small Business?

At its core, your startup or small business should include the following in benefits packages:

  • Health Insurance (Including Vision and Dental)
  • Paid Time Off
  • Retirement Plan

The above benefits are what most job seekers expect at a minimum, and not offering them could leave your application portal looking like a ghost town.

But you’re not aiming for the bare minimum. After all, you don’t want to attract candidates with bare minimum qualifications, right? Here are some ideas for additional benefits that can help your organization stand out:

  • Flexible Hours
  • Hybrid/Remote Work Schedules
  • Life Insurance
  • Tuition Reimbursement
  • Student Loan Repayment
  • Equity
  • Retirement Matching

There’s a lot to consider when putting together your business’s compensation and benefits packages. Fortunately, you can rely on expert help to get it right (even if you don’t have an internal HR department). Contact us to learn more about partnering with an outsourced HR services provider.

Do Startup Companies Have Other Benefits?

The best startup benefits (on top of the essentials like health insurance) are the ones that make your organization stand out from the rest. That’s where exciting benefits like flexible work schedules and generous paid time off come in.

It’s also important to consider benefits that incentivize valuable employees to stay with your organization long-term. By investing in your team, they’re a lot more likely to return that investment and then some. Here are some ideas for showing your team that you want them to stick around for the long haul:

  • Professional Development and Certificate Training
  • Vested Stock Options
  • Paternal Leave (Including Maternal and Paternal) 

Reach out to our team to see how your startup can start leveraging these benefits options.

Do Startups Offer Life Insurance?

Offering life insurance plans to your employees shows that you care about them and their families. Providing life insurance options gives a few additional benefits to your employees:

  • Easier Qualification
  • Simpler Enrollment Process
  • Group Rates

Ready to give your employees peace of mind through life insurance? Contact us to learn how.

Optimize Your Compensation Packages with Milestone

Providing competitive salary and benefits packages helps your startup both attract and retain top talent. However, you can’t give away money you don’t have access to. That’s why it’s important to optimize your compensation and benefits packages to provide the most value to your team members without straining your organization’s resources.

At Milestone, that’s our specialty. Our experts know which knobs to twist to benefit all stakeholders. Give us a call to get started.

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