Article: Your startup has grown. What about your benefits strategy?

Compensation & Benefits

Your startup has grown. What about your benefits strategy?

A benefits strategy that work for a newly-minted company won't work once it passes a certain size, and that affects attraction and retention. In a follow-up to Mercer's 2022 AMEA HR conference held earlier this month, Joshua Fisher, Multinational Regional Commercial Leader, Mercer Marsh Benefits, delves into the challenge.
Your startup has grown. What about your benefits strategy?

For startups, a constant challenge is attracting and retaining the right talent to help them get to the next growth stage. But many of these new companies don't have the financial means or the brand and industry reputation to attract the level of talent that they seek, and they need to find a way to differentiate themselves from the hundreds of thousands of other startups out there – a way that is “relevant, personalised, and tailored”, says Joshua Fisher, Multinational Regional Commercial Leader at Mercer Marsh Benefits.

That way is often through benefits. “These organisations are on a journey to their next phase of growth, and there may be certain organisational demands. The rewards may be equity-based – potential rather than tangible,” he explains. “In that context, benefits play quite a strong role in terms of keeping people on the journey.”

As the company scales, that role, and its potential, also grows. It's not just that the benefits strategy needs to be regularly refreshed – that is common to companies of all sizes – but also that benefits are a good way of closing the gap between what the startup needs and what it can get.

“Hyper-growth organisations may continue for some time in an embryonic state where their growth curve isn't reflected in their infrastructure or even the number of people they have, and that makes benefits very important to support the organisation's development,” Joshua says. “In going through that growth, it's really important to work on not just compliance with regulated employee benefits, but more broadly in terms of helping ensure that the entire benefits strategy is future fit.”

“Because what's easy when you have a couple of locations and 50 or 60 people becomes much more difficult when you have thousands of people and you have to deliver in multiple countries.”

What's a good benefits philosophy for startups?

On the surface, the approach has to be broad-based simply to keep up with growth.

“Very often, growth can be multinational,” Joshua explains. “And so we see organisations wanting to ensure that their approach to benefits is not only relevant but also compliant to requirements in their different locations. Often, they will move to global benefits management, where they create an overarching philosophy or structure around benefits, and then try to implement that across multiple markets.”

In implementation, though, it comes down to understanding what is considered a benefit, and reimagining that in the vision of the future organisation. And the bar is really very simple, according to Joshua: it's about meeting employee needs to create an emotional bond.

“If you have fulfilled the needs that I have as an employee – my wellness needs, my risk and protection needs, and also that X factor that goes beyond the traditional benefits to really help me identify with your organisation – that makes it that bit more difficult for me to accept another offer for a bit more money somewhere else,” he says. “You've really nailed it when you have created this emotional connection between employee and employer. That bond forms the purpose of what people do at work.”

“It's not just the benefits and the compensation, it's the loyalty that the organisation fosters. Benefits play a role in finding that X factor.”

Being transparent with employees helps a lot, he adds. Startups by the very nature of their business need to communicate with their employees – to have an open and honest dialogue with them – in order to build trust. This also helps drive the benefits strategy by surfacing meaningful insights around what keeps people with the company. And some of those insights can be surprising.

“So often, people place less value on the offering itself, but more value on having choice and having access to relevant information,” he says. “One of the clients I've worked with made a really significant change to some medical policies, but it wasn't so much the policy itself that people liked, as the fact that their employer actually made the experience of claiming and getting access to the policy easier.”

Not all smooth sailing

There are a few areas where startups may trip up, according to Joshua, and the biggest challenge is  understanding where the business will see the greatest returns for its investment and efforts.

“Implementing global benefits management is about having that core organisational philosophy in place, where the right people have sat down and put thought into why they're offering something and what the implications are. But it doesn't stop there. You have to execute that strategy, and that's often difficult because startups don't have a huge amount of resources. So you have to find good partners to support that execution, you have to build the leverage to get a good deal for supplying those benefits offerings, and most of all you have to find that unique differentiator.”

There's no one-size-fits-all differentiator either, as he takes pains to point out. Every company is different and every industry is different, and what works for a particular startup will come down to a balance between what people want, what's typical for the industry, and where the company currently is in its growth cycle – as that affects the resources it has and the talent it needs.

But at the end of the day, it is manageable, he believes.

“It's about getting these factors together: setting up that global framework, understanding needs and being transparent about what you offer, and making sure the basics are in place, whether ensuring that you have regulatory and statutory compliance or simply meeting the minimum expectations.”

 

People Matters is the exclusive media partner for Mercer's 2022 AMEA HR Conference, and this conversation was a follow-up to Joshua's session on innovative benefits. Interested to participate in next year's edition of the conference? Check out this year’s agenda.

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Topics: Compensation & Benefits

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