May 31 2008 by Jason

What Kind of Benefits Can I Expect Working at a Startup?

Q:  What kind of benefits do start-ups typically offer? I don’t mean salary or equity: about which you already posted a lot of information. I am talking about health and life insurance, disability insurance – all of the typical benefits one receives when working for a large and established business.

Do you recommend a particular benefits package configuration to your companies? Are benefits ever a part of your conversations with your companies about the ‘costs’ of running the business?

How do you see startups dealing with a regulatory landscape designed for an entirely different type of organizations?

A: (Jason)  In order to best answer your question, I asked Dan Cutler from TriNet to opine.  Dan and TriNet have been great partners to our portfolio companies – so much in fact that we decided to switch our own benefit offerings over to TriNet.  Here are some of Dan’s thoughts, below of which I agree with completely.

A typical VC backed company will offer to pay 100% of a good benefits package for the employee and between 0-50% for dependent coverage.  A good package will include medical options PPO and HMO and dental, long-term disability and a minimum of 10K life insurance with an option to buy more.

In order to hire and retain "A" players the savvy entrepreneur will use a PEO (Jason note:  "professional employee organization" like TriNet) that can offer self-help HR, online enrollment, several benefit plans to choose from,  a PeopleSoft HRIS,  tiered pricing,  and will pay a flat rate administrative fee.

Regarding compliance issues.  All energy spent by the business owner to keep compliant is a waste of time when you can outsource HR and allow your outsource provider to shoulder the risk.  The business owner’s job is to move the business forward and select good partners that will provide assistance in areas that are not core.