Employee Benefits Every Startup Should Offer

Written by: AEIS

Startup companies often have to be strategic about the benefits they offer. As a new company, you can choose to make a strong statement early on by flashing an impressive benefits package to attract quality talent.

There's no one-size-fits-all solution to employee benefits for startups, so you should put a lot of thought into what options work best for your business and employees, so you can keep enrollment high and your employees happy.

Many top employees tend to be nervous about leaving a "more secure" job to pursue a startup company. Offering non-traditional benefits and perks like remote working stipends, gym memberships, and stock options may be more affordable and simpler, but trying to pull the brightest stars from top companies will require a robust traditional benefits package. These employees are accustomed to things like premium health care plans, life insurance, dental insurance, vision insurance, and health savings account options.

Benefits can be seen as just another cost of running a business if you want to succeed. This doesn't mean you should overspend and put yourself in a bad position. Starting with these options below will leave you in a great position right out the gate, and we'll tell you more about what you need to know to get there.

When you're running a startup, literally every dollar needs to stretch as far as it can go. That's why startup benefits are so important - they help attract and retain the type of talent that will allow you to do more with less on a daily basis.

Importance of Employee Benefits for Startups

The number one reason why small business benefits are so important is because, as mentioned, they allow you to attract and retain top talent. This is especially key in a competitive market where people might be able to offer a higher salary that you can't match.

Startup employee benefits also help with employee retention by directly addressing employee satisfaction. All of this helps to enhance employee productivity, which is again how you remain as competitive as possible.

Types of Employee Benefits for Startups to Offer

Just a few of the types of small business benefits that startups can offer include ones like the following.

Health Insurance

Offering health insurance is one of the most impactful benefits a startup can provide. Even if you're working with a limited budget, there are flexible options available. Employers can choose different contribution structures and tiers of coverage based on workforce needs.

For cost-conscious startups, High Deductible Health Plans (HDHPs) paired with Health Savings Accounts (HSAs) can be a smart option. HDHPs generally have lower monthly premiums, making them more affordable for both employers and employees. When paired with an HSA, employees can set aside pre-tax dollars for out-of-pocket medical expenses, reducing their taxable income. Employers can also contribute to these accounts, further enhancing the value of the benefit. Unlike Flexible Spending Accounts (FSAs), HSA funds roll over each year and grow tax-free.

Dental and Vision Insurance

Here, group benefits will be particularly important. Most individual dental plans include wait periods and costly exclusions for services your employees need. By providing group coverage you can often mitigate these drawbacks from your plan. 

Life and Disability Insurance

 Life & Disability benefits help ensure financial security for your employees and their families in the event that they have an untimely death or are unable to work due to an illness or injury. These types of coverage aren’t always available from the get-go, but providing them once you can goes a long way to show employees that you as an employer want to protect their income.

Retirement Plans

California employers with five or more employees must either offer a qualified retirement plan, such as a 401(k) or register with CalSavers, the state-run retirement program. This requirement will expand to businesses with just one employee by December 31, 2025.

Extra Benefits You Can Offer

There are emerging benefits to offer employees that can enhance employee morale while reducing indirect costs. These include:

• Remote Work or Flexible Hours
• Bonuses
• Company Retreats
• Mental Health Support
• Travel Reimbursement
• Childcare Assistance
• Student Loan Assistance
• Wellness Subscriptions or other Discounts
• Recognition and Rewards Programs

Compliance Requirements for Startups in California

In addition to workers' compensation insurance, all employers in California - including startups - need to provide eligible employees with at least five days of paid sick leave per year. They'll also need to provide family and medical leave under the CFRA.

Customizing Benefits to Fit Your Startup's Needs

To customize benefits to fit your startup's needs, you'll first want to understand employee preferences. Don't be afraid to give out polls and solicit feedback regarding what people actually want.

You'll want to set a strict budget for benefits and stick to it. You'll also want to choose scalable solutions that will grow as your business does the same.

Get Help From A Trusted Insurance Broker

To find out more information about small business and startup business benefits to offer, or to get answers to any other important questions that you might have, please don't hesitate to contact the team at AEIS today.