How to offer a competitive benefits package as a startup

Startups are facing a competitive job market right now, and being able to attract top talent is key to success. Employee benefits like health insurance, paid time off (PTO), tuition reimbursement, and other perks can have a profound impact on attracting the best employees. Case in point: According to a study conducted by Glassdoor, 60% of respondents said they strongly consider the perks and benefits being offered before accepting a job offer.

It’s important to keep in mind that some benefits are mandatory (like workers’ compensation and health plans, under certain circumstances). But other parts of your benefits package are optional—and these fun perks can give your startup more of a competitive edge, helping you attract and keep top talent at your company.

Now for the good news: Rippling PEO helps startups like yours access big-company benefits at low prices. From large group health insurance plans and HSAs to flexible spending accounts and 401(k) retirement plans, you can use Rippling to build the best benefits package for your employees at a cost you can afford.

Ready to learn how anyone—from entrepreneurs to IPOs—can design competitive benefits programs that help them attract and retain top employees? Let’s dive in.

Mandatory employee benefits

Businesses are required by law to provide some benefits to their employees, and failing to do so can result in fines and penalties.

Mandatory benefits can vary based on state laws; for example, if your business is based in California, you may be required to offer disability insurance—but not if you’re based in Alabama. Additionally, some benefits are mandated on the federal level, including the ones listed below:

With Rippling PEO, managing benefits compliance is simple. In case of on-the-job injuries, Rippling’s workers' comp policy safeguards employers from potential litigation and covers employees' lost wages and medical expenses, ensuring a smooth process.

Automatically enroll employees in company benefits

See Rippling

Optional employee benefits

From paid time off and retirement contributions to gym memberships and childcare assistance, the sky's the limit when it comes to what you can offer your employees above and beyond mandatory benefits—and the optional benefits you choose give you a chance to stand out in the ultra-competitive hiring landscape startups often face. They can be the difference between a top-tier employee accepting your job offer or going to work for a competitor.

The list below should give you some ideas of popular optional benefits that many startups offer—but keep in mind that this list is nowhere near exhaustive. Your employee benefits package may end up including benefits that aren’t on this list—it all depends on what your employees want and need.

Generous paid time off (PTO)

Paid time off (PTO) can refer to paid vacation, personal, and sick days—all time for employees to rest, recuperate, and take care of personal and family needs without giving up their pay. PTO isn’t legally mandated in the US, but some states have laws that require paid sick leave. And reflecting the importance of work-life balance, PTO has become a highly sought-after employee benefit.

Startups that offer PTO can choose the amount they want to offer, all the way up to unlimited—and unlimited PTO policies can be extremely attractive to help encourage work-life balance and combat employee burnout. But when setting your PTO policy, be sure to consider different factors, like balancing your startup’s needs, your number of employees, their workloads, well-being, and other relevant factors.

Stock options

Stock options are a form of equity compensation that allows employees to purchase stock in the company at a predetermined future date at a pre-set “strike price,” often lower than the market value of the stock at the time they buy it. Employees can choose whether or not to exercise their options, but for startups that increase in value, stock option packages can become highly lucrative.

These can be a good option for startups—especially in their early growth stages—to offer competitive compensation when they don’t have the funds to offer high salaries. By making up the difference with equity compensation, they can stay competitive without breaking the bank.

Stock options also have the added benefit of giving employees a real interest in the company’s success. When they own a piece of the company through their stock options, employees tend to be more committed—after all, the more the company succeeds, the more their stock is worth.

Retirement plans  

Contributing to social security is mandatory, but offering other retirement plans is optional. However, it’s worth considering. Offering your employees retirement benefits shows your commitment to their long-term financial stability.

A popular retirement plan many startups offer is a 401(k) plan. There are two types: Traditional and Roth. Regardless of which one they choose, employees put a portion of their paycheck into an investment account. With a traditional 401(k), they invest pre-tax dollars. With a Roth 401(k), they invest post-tax income. Employers can choose to match their contributions—while not mandatory, it’s highly encouraged. 

Aside from attracting high-quality talent, offering a 401(k) plan provides tax incentives for your startup from the IRS.

If you're looking to streamline your startup's benefits administration, Rippling is designed to make retirement plans like 401(k) more accessible and easier to manage for both you and your employees.

Life insurance

Offering life insurance coverage gives your employees’ families a safety net should the unthinkable happen—life insurance offers employees’ beneficiaries cash payments and other benefits in the event of the employee’s death. Many different types of life insurance plans exist, including whole (a more expensive option), universal (with flexible premiums), and term (the most affordable and common). 

Because of the availability of life insurance plans with varying premiums and customizable coverage, you’re guaranteed to find a plan that meets the needs of both your company and your employees.

In-office perks 

When many people picture startups, open office layouts with bean bag chairs, pool tables, catered lunches, and break rooms stocked with snacks come to mind. Office perks may not be required, but they’ve become a hallmark of startup culture. Plus, offering perks can help you motivate your employees, boost collaboration, and even make your workforce more efficient.

Common in-office perks for startups include free snacks and drinks, catered lunches or meal stipends, recreational areas, team getaways, and professional development opportunities. These benefits are great for boosting team morale, contributing to a positive work environment, and increasing employee satisfaction. And when your employees have everything they need—for work, breaks, and even recreation—right at the office, they can save time by not having to go offsite to get lunch or plan team-building activities.

Commuter benefits

If your startup is in-person or hybrid, commuter benefits might be an attractive perk. These can include parking stipends, gas reimbursement, Uber or Lyft credits, pre-loaded transportation cards, or incentives for using public transportation.

What’s even better is that commuter benefits can help reduce traffic congestion and environmental impact. Encouraging your employees to carpool or use public transportation contributes to a greener, more eco-conscious workplace and can align with your company’s sustainability goals.

Flexible or remote work  

Providing flexible work hours and remote work schedule options gives employees more opportunities to balance their personal and work obligations without stress. This, in turn, leads to greater job satisfaction, improved work performance, and better productivity.

Additionally, embracing remote work can result in significant cost savings, especially if it allows you to forgo expensive office space. It also expands your talent pool, enabling you to hire from a wider geographic area and enhance your startup's growth potential.

With Rippling, you can seamlessly manage your entire workforce, regardless of their location.

Health and wellness programs 

67% of employees in organizations with wellness programs love their jobs and are likely to recommend their company to others. It’s clear that a healthy and motivated workforce can contribute to your company’s long-term success. But, creating a well-rounded offering of wellness benefits can sound intimidating. 

Luckily, wellness programs can be customized to fit any budget. You can mix and match offerings like discounted (or fully paid for) fitness memberships, mental health services and subscriptions, nutrition coaching, mindfulness apps, and more.

Manage all your employee benefits in one place

See Rippling

How to put together a competitive benefits package

Now that you’ve explored some of the different types of benefits that are available, it’s time to put them together into a competitive package that will attract the best employees to your company. This requires a strategic approach, where you balance employee wants and needs with your startup’s budget constraints. The steps below will help you get started on the road to creating the right benefits package for your organization.

Rippling's Benefits Administration software consolidates all your benefits into one system, automating enrollment, deductions, and administration. 

Determine your budget

Most startups face very real financial limitations when putting together benefits packages. Accordingly, it’s important to be realistic when assessing your budget for employee benefits. Start with mandatory benefits—see how much they cost and how much you’ll have left for optional benefits. It’s better to start modestly at first, and then build upon your benefits package as cash flow increases. 

Strike a balance between salary and benefits 

While a sky-high salary is one way to lure talent, that can be tricky for startups—especially for those choosing to bootstrap their funding.

Tailoring different aspects of your benefits package can be a great alternative for attracting talented employees. For example, emphasizing work-life balance with employee benefits can be an enticing option. You may not be offering the highest salary, but unlimited time off, flexible work hours, and remote work can offset the want— sometimes even need—for more income (especially for employees with families). As a bonus, this positions you as an employer that takes care of its workforce.

Consider opting for a PEO  

If you want to offer big-company benefits on a tight startup budget, you should consider a Professional Employer Organization (PEO).

When you join a PEO, it co-employs your workforce for administrative services—meaning it manages administrative tasks like running payroll, enrolling employees in benefits, making sure you comply with labor and employment laws, and more. With all of that off your plate, you can focus on more strategic, higher-value work tied to business outcomes for your startup.

One of the biggest advantages of joining a PEO is gaining access to better employee benefits for less. Since PEOs co-employ hundreds of thousands of employees across thousands of companies, they have the negotiating power to get Fortune 500-level benefits at small business prices. Not only do you get to save money, but your employees receive a more holistic benefits package.

Rippling PEO makes it easy for startups to provide the best benefits without the high costs. Hire and onboard employees around the world with the support of in-house HR experts, and guarantee compliance with tax filings, labor laws, and more.