Startup and tech jobs are harder to come by these days.
Between large-scale industry layoffs and a growing pool of applicants for positions that are available, jobseekers find themselves in an increasingly competitive landscape. Employers, not so much.
That’s reflected in workplace perks. These days, employers are less prone to woo prospective hires with hefty sign-on bonuses, approve remote work when they’d prefer onsite, or offer elaborate workplace perks like gourmet meals or on-site masseuse visits.
Instead, startup employers in particular have been retooling benefits and perks with an eye to maintaining or reducing costs, all while sustaining workplace morale.
“Everyone’s very cost-conscious,” said Jaclyn Chen, CEO and co-founder of Benepass, a startup that works with companies to set up perks and benefits plans. In recent quarters, she said, more companies have been adding benefits in areas such as fertility, dependent care and individually selected perks.
However, employers are also cutting benefits that they see as underutilized. This might include something like a universal gym membership that only some employees use. In the era of hybrid work, they’ve also pared down spending for on-site events and opted for more frugal snacks and meal offerings.
Not so much competition
The current environment is a shift from the more-is-better mantra when startup funding was hitting record highs a few years ago.
Back then, startups vyed for talent in a tight labor market by offering higher salaries, flexible schedules, remote work, extensive paid time off, and subsidies for things like gym memberships and dependent care. Besides competing with each other, startups also had to contend with big tech companies like Google and Meta, known for their chic campuses and lavish perks.
Today, the risk of employees jumping ship for a bigger paycheck and more perks is lower. For one, it typically takes more time and effort to land a new job than was the case a few years ago.
Employment by tech sector companies has also been trending lower, according to analysis from IT certifications provider CompTIA.
That said, perks and benefits aren’t only designed to lure new hires. Companies also want to keep existing employees engaged, avoid burnout and maintain high job satisfaction. At maturing startups in particular, HR departments have to balance the needs of workers at different stages in their lives. Core constituencies might include recent graduates seeking mentoring and social connections as well as older peers starting families and navigating work-life balance.
Flexible perks are in
One way startups are catering to employees while keeping costs in check is by offering a choice of perks. Lifestyle spending accounts, for instance, allow employees to allocate a given sum across several options such as gym memberships, work-from-home expenses, and even potentially pet care.
And while parental leave has long been a standard benefit, we’re seeing an uptick in fertility benefits tailored to employees’ particular needs, with coverage potentially contributing to IVF, fertility consultations and adoption costs.
Another growth area is perks around commuting. While remote or hybrid work isn’t going away, we’re also not returning to the peak work-from-home pandemic days. As employers seek to bring more workers back on-site, they’re adding benefits aimed at reducing the cost of coming into the office, Chen said.
Where talent is in short supply, benefits follow
Of course, there are still ultra well-funded startups offering very generous salaries and benefits packages to those with in-demand skills. This seems to be especially the case in the AI space.
A perusal of career sites at some of the most highly valued U.S. unicorns gives a sense of what’s being offered.
OpenAI’s perks include unlimited, flexible time off, daily breakfast, lunch, and dinner, and coaching sessions, along with robust medical, family leave and travel benefits. At CoreWeave, 100% of medical, dental and vision insurance are covered, with benefits extending to childcare support and mental wellness.
A number of unicorns, including CoreWeave and Anthropic, offer fertility benefits through another onetime startup, Carrot Health, which is now part of health and social services software provider Unite Us. Other startups offering perks and benefits popular with the unicorn crowd include Spring Health, provider of a mental wellness platform, and Kinside, which helps families find child care.
A cyclical thing
Much like economic cycles, the level of perks employers offer tends to rise and retreat. Currently, with the startup job market down from its peak-era frenzy, we appear to be in one of the periods of retreat.
That said, past history teaches us that given enough time, things will heat up again. Expect ever-more-enticing perks and benefits packages to follow.
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Illustration: Dom Guzman
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