If you’re building a startup (or any business for that matter) you’ve probably come from humble beginnings. Tapping away at your laptop, furiously reaching out to potential customers and clients. Acting as CEO, Head of Sales, VP of Customer Service or any other role that has you googling something along the lines of “marketing.. startup.. how to.” We’ve been there.
Now you’ve bootstrapped your way to the next level or secured some investment and need to hire a team to lighten your imposter syndrome and build a juggernaut.
Cue your next google search: “how to build a great team on a budget.”
Border conditions, adapting to remote working environments and general cash constraints are challenges all startups face when it comes to recruiting incredible talent and even more-so for high demand roles in areas like Engineering and Product Development.
But there are loads of ways to compete. Let’s explore your options…
Offer value, not just a salary
Not every potential hire is looking solely at their take-home salary as the incentive to join a new company. It’s important for startups to think about their broader employee value proposition (EVP). This refers to the total proposition an employee gains from working in your business. Compensation (salary, bonuses, pay equity), benefits (remote work, time off, health and wellness), career support (education, training, promotion pathways) and culture (mission, values, team, atmosphere) are all relevant factors that make up EVP.
Think about what you can offer beyond a salary.
According to Think & Grow and KPMG’s Startup Salary Guide of the 140 companies from which they collected data, 52% offer parental leave, 48% offer food perks and 44% provide wellbeing programs. Can you offer additional leave? 9 day fortnights? Recreational activities? Discounted memberships? Remote work?
Often what you give in perks, you receive back ten fold in energy and commitment to your company’s mission.
Make sure the hiring process matches the job
Often companies put a truckload of effort into making either their hiring process fun and tempting, sugar coating the realities of the job, or the hiring process doesn't make the great aspects of the role sing. To win and retain talent, you have to do both.
To create consistency between these experiences, consider how you present the role. Does it sound compelling, challenging and interesting? Is there clarity about the nuts and bolts of the role, team dynamic and decision making hierarchy? Have you clearly articulated the mission, vision and values of the company? Does your company walk its talk when the new hire arrives?
Even if you’re a company with less than 5 team members, carefully considering these factors not only makes a role more compelling for a prospective hire, it will help your business determine its structure and direction, from which the entire organisation benefits.
It’s a cultural win and a hiring strategy, in one hit.
Incentivise new hires with equity
It’s no secret that cash can be tight for startups, which makes it hard to pay top dollar for talent. Using an ESOP (Employee Share Option Plan) start-ups can offer tasty equity incentives to top-up slightly lower remuneration packages. The same applies for attracting experienced advisors and developers at an early stage. ESOPs are now an accepted (if not expected) component of remuneration for startup hires.
According to the Australian Startup Salary Guide, 49% of roles had ESOP allocations forming part of their remuneration packages and executive roles have on average ~$167k in equity value, with 64% of them participating in ESOP, and non-executive roles have on average ~$17k in equity value, with 45% of them participating in ESOP. A significant proportion of executive “Chief” and “Head of” roles saw up to 2-3x their base salary in equity and sometimes up to as much as 10x their base base salary was offered as equity. That’s a whole lot of equity.
Potential ownership of a slice of the company means employees start thinking like business owners, so it’s common to see a spike in collaboration, productivity, and innovation when ESOPs are incentivizing the team.
Cake Equity makes creating and administering an ESOP simple and affordable. And joining the platform is free. Yum.
Get the recipe for success and learn the best-practice standards for ESOPs globally and in your country. We live and breathe ESOPs so we know which questions are keeping you up at night. We answer them all in this guide.