A lot has been written about the awesome working offices and perks packages lavished upon the tech workers of the West Coast, but what’s going on here in London?
Building a successful startup is about much more than rewarding your team with heaps of cool stuff for working for you (product, marketfit, execution anyone?), but a world beating perks package is a great way to ensure that you’re attracting (and retaining) the hottest talent in tech.
So, what do employees want in a remuneration package? Salary is important, of course, but it’s far from the most important thing. Yes, it’s vital to pay a competitive package that’s at a fair market rate, but – as a founder – throwing cash at potential employees isn’t nearly as valuable as providing an amazing perks package. Plus (and here comes the cheeky bit), it’s almost always cheaper for a company to provide perks than ‘cash’.
When you’re trying to attract the best talent, which may have snuck off towards the dazzling lights of Finance, Law or Consulting after having finished university, you need to be prepared to compensate your team in the right way, which isn’t necessarily showering them with bucketloads of cash.
So what makes an awesome perks package?
Stock Options.
OK, so this is a bit of a cheat, as stock options don’t really classify as ‘perks’, but they really are one of the very best ways of compensating employees:
They’re free at the point of donation (i.e. you don’t have to pay anything to give them out, except any legal fees involved in setting the structure up).
They are highly motivational to your team: the better the company does, the better your team will do financially. Hear about the masseuse who joined Google and got £1M, anyone?
The upside can be huge: as an employee of a startup you can actually end up being financially far better off than you’d have been if you’d kept slogging away at your City job. Ever hear of the junior lawyer who got a £50M bonus when his law firm sold to Facebook? Nope, me neither.
As a potential job seeker, I would hesitate at joining a ‘startup’ or small company that didn’t give me any slice of the pie. If the Founder/CEO isn’t prepared to give away any equity in the business, it’s a strong sign that they don’t properly understand the motivations and aspirations of their team, and is a major alarm bell.
That being said, a major sign of a failing startup is one that weighs too much of the compensation package towards options. If a founder would rather give away more of the company than pay more in salary, that often indicates that the company is running out of cash, and in pretty troubled waters.
Flexiworking.
Flexiworking has come to mean much more than your line manager allowing you to get in at 9.30am, so long as you spend half an hour at the end of the day slaving away at your desk while your colleagues have headed home. Flexiworking now means companies empowering their staff to work when and where they are most productive.
This means that if you work best in the early morning or late in the evening, from home, a cafe, or even from another country, you’re trusted to be the master of your own time. Everyone knows that startups don’t have time to carry people, and so why not empower your team to work whenever and wherever they need to.
Some companies go even further. At JustPark, like Netflix and Virgin America, we have an unlimited holiday policy. The team is trusted to take their holiday when they need it, and all an employee needs to do is clear it with their team first.
The flashy stuff.
A table tennis table is so 2006; it’s to startup world what the humble water cooler is to Wernham Hogg. TransferWise have a sauna, DropBox has its own music studio, Google has a slide.
At JustPark, our perks include a free chef-cooked gourmet lunch every day (shout out to Julie!), quarterly massages (grazie Mario), yoga classes (namaste Kylie), secret offsite retreats, a MacBook Air for every employee, tech talks by our Dev team, and for the drivers amongst us, free parking anywhere in the world!
The Mission.
This is all well and good, but there really is no substitute for creating a company with a mission that employees can get behind. 64% of Millennials say it’s a priority to make the world a better place, and if you’re leaving a City career behind, it’s fair to say that the package shouldn’t be a dealbreaker.
As a startup, if the problem you’re solving isn’t big enough, and if the company isn’t creating value for its users, then not even all the inflatable dinosaurs and sushi in the world will help you hire and retain the talent that you need.
It’s vital for a job seeker to find a company whose mission and values align with their own, and at which they feel they will thrive and prosper.
So, if you’re in the market for a new position at a startup, looking closely at the perks package that an employer offers can be very enlightening. If not much thought has been put into it, it could mean that an employer hasn’t really thought what staff really want or need. If you can see that a potential employer has looked long and hard into how to reward staff, then that is an excellent sign that your future colleagues will be happy, you’ll be happy, and that making that leap into startupland could be one of the best decisions you will ever make.
Alastair Budge is Head of P2P at JustPark. JustPark have recently raised £3.7M on CrowdCube making their raise a record-breaking success.