The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “How important are employee perks when first launching your startup?” is written by Promise Phelon, CEO of TapInfluence.
Finding the right job has almost always been as much about the benefits as it is about the job. However, the tech revolution has changed the way we see benefits, with companies like Google (GOOG), Salesforce (CRM), and Twitter (TWTR) offering perks like fully-stocked kitchens, concierge services, on-staff chefs and baristas, laundry service, car detailing, game rooms, free transportation, and more. As the Googles of the world continue to top lists of best places to work, some startups may look to offer similar, and often crazier, employee perks in an effort to compete for top industry talent.
Unfortunately, that’s created an environment where company perks are conflated with company culture. Of course, startups need to offer certain benefits in order to attract and retain talented and ambitious employees. However, it’s more important to focus on developing an enviable culture and allowing the perks to be an extension of it—not the other way around. Perks are not a replacement for a strong culture. I think of it like an iceberg—there’s a lot going on under the surface when the company is investing in culture. Only then, on top of that solid foundation, should perks be a focus for you.
For instance, at my company, offering meals for everyone isn’t really about free food; it’s actually about building relationships and trust, and respecting the contributions of a hard-working team. If people sit at their desks with headphones on working through lunch, there’s no interaction and no relationship-building. So providing a space for gathering and conversation goes hand in hand with cultivating a culture in which your employees feel connected not only with the company mission, but with each other, as well.
In a startup, one of the most important perks you can offer employees is equity. Not everyone is cut out for the risk and pressure of working for a startup, so the people you want to attract are the ones willing to take on the risk with passion and enthusiasm. While there’s no guarantee of startup success, offering stock options turns the high risk into a potentially equally high reward. Stock options cultivate an ownership culture where employees work hard to ensure the success of the company in the hope for a reward bigger than just a paycheck—and not just monetary. They become makers, doers, and builders. They’re exposed to financials, people operations, marketing and communications, sales processes, and are invested in every facet of the company’s progress.
Focusing on culture also develops and fosters intrinsic motivations, such as autonomy and mastery. This requires getting to the why of employee engagement. Three key facets we take into account are transparency, winning habits, and individual learning. Engaged people believe in what they’re doing, and transparency provides the visibility that is required to build trust. The more people are included in what’s happening with the business, the more invested they are in its success.
Creating winning habits is as much an attitude as it is a set of principles that guides your actions. Push yourself beyond what you think you’re capable of achieving. Support each other and strive to fail fast so you can take what you learn and apply it to the next iteration. Working together, this mindset becomes ingrained in everyone. And not everyone is motivated in the same way, so account for personal growth. We hire people for their unique skill sets and then work to improve them even more. Everyone has tailored 90-day plans that enable them to constantly monitor their growth.
No matter what perks your company offers, someone else will offer the same thing—or something better. For good or ill, the culture is the foundation of the company’s reputation and is what helps companies of any size attract, retain, and grow great talent. Instead of putting together a slew of fun and quirky perks, ask yourself who you are. What kind of company culture do you want to create, and what kinds of benefits and growth plans can you offer to support that culture?
At the end of the day, a company with a limited perks and benefits package known for its supportive and purpose-driven culture is more likely to attract loyal and passionate employees and grow the business than a company with flashy perks and a culture built on fear and negative competition.