How to attract job candidates as a startup

Written by: Chase Charaba
Published on June 16, 2022.

The United States is a hotbed for tech startups. Some of the most successful companies in the world began as startups in the U.S., including SpaceX, Stripe, Instagram, Airbnb, Epic Games, and DoorDash, to name a few.

According to Statista1, 15.4% of the U.S. population is involved with a tech startup, either as an owner, partner, or employee.

With many private startups hoping to reach unicorn status, or a valuation of $1 billion or more, acquiring and retaining top talent is essential.

Because startups are highly competitive and volatile, it can be hard to sway job candidates to apply or take a position at a small startup versus larger companies. Many small businesses have limited capital and fewer benefits than larger organizations. However, even as a small startup company, you can create a competitive compensation package and become an employer of choice without breaking the bank.

This article will cover how to attract job candidates as a startup and which startup benefits are most effective at recruitment.

Read our guide to personalized employee benefits for tech startups

Highlight your company culture

One of the perks of working at a startup business is that since there are fewer employees, people get to know each other better and on a more personal level. While your financial capital may not be able to compete with larger businesses in Silicon Valley or Seattle, your startup culture can.

There are many steps you can take to create a positive company culture. Documenting your values and vision is a significant first step. In addition, being open and honest with your employees can help boost morale and productivity because employees will feel aligned with your organization’s goals and that their voices are being heard.

By making sure that your employees are engaged and having fun at work, you can boost employee loyalty and attract the best employees.

Offer startup benefits and perks

Although traditional benefits are still an important part of a competitive employee benefits package, the needs of your employees are changing. You’ll need to offer a wider range of benefits and additional perks to attract the best employees.

While large corporations can afford to offer in-house massages, employee retreats, and catered lunches, perks don’t always need to be extravagant.

The following sections will explore the array of benefits and perks that startups can implement.

Fringe benefits

Fringe benefits are a form of indirect compensation provided to employees alongside their wages or salary. While fringe benefits can include any employee benefit, they generally only include the perks listed in IRS Publication 15-B and other non-traditional benefits.

Some examples of fringe benefits include:

  • Achievement awards
  • Adoption assistance
  • Commuter benefits
  • De minimis benefits
  • Educational assistance
  • Employee discounts
  • Life insurance
  • Retirement planning services

While some fringe benefits can be expensive and complex to administer, others, such as employee stipends, can be relatively inexpensive to implement as company benefits.

A taxable wellness stipend is a great place to start. With a wellness stipend, you can choose your employees’ monthly allowance for their wellness expense reimbursements. This means that you have complete control over the cost of your wellness stipend benefit, whether that’s $50 per employee or $300.

Employees can get reimbursed for their gym memberships, home exercise equipment, fitness class fees, mobile wellness apps, wearables and devices such as fitness trackers, and more. This gives your employees the freedom to choose which wellness expenses they want to have reimbursed from their monthly allowance.

Wellness stipends are a cost-effective way to introduce a wellness program to your in-office and remote workers without the extra costs of setting up athletic facilities, classes, or equipment.

You can also offer a remote work stipend if you have remote employees. Similar to a wellness stipend, this allows you to reimburse your employees for their home office expenses, including internet access, cell phone bills, and home office set-up costs, to name a few examples.

Health benefits

While many startups believe they can’t afford to offer healthcare benefits, this couldn’t be further from the truth. There are many benefits options available other than traditional group health insurance.

A health reimbursement arrangement (HRA) is a popular option among organizations that want to offer a flexible, affordable, and personalized benefit to their employees. An HRA is an IRS-approved, employer-funded health benefit you can use to reimburse your employees for their qualifying medical expenses. Simply set a monthly allowance for your employees to use and approve their eligible expenses up to their allowance.

The best part about offering an HRA to your employees is that it is tax-free for you and your employees, so long as they have a health insurance plan with minimum essential coverage (MEC).

There are a few popular types of HRAs available, including:

  • Qualified small employer HRA (QSEHRA)
    • Specifically designed for organizations with fewer than 50 full-time equivalent employees (FTEs)
  • Individual coverage HRA (ICHRA)
    • An excellent option for businesses of all sizes that want to customize their allowance amounts and employee classes
  • Group coverage HRA (GCHRA), also known as an integrated HRA
    • A way to supplement your existing group health insurance, such as a high deductible health plan (HDHP), to reduce health insurance costs

You could also offer your employees a taxable health stipend. While HRAs are often a better fit for most organizations due to their tax-advantaged status, there are some medical expenses that HRAs don’t cover. Health stipends also provide the flexibility to offer health benefits to your 1099 contractors and international workers.

Other perks to consider

Your startup can offer many other perks to help attract and retain employees and improve your workers’ job satisfaction.

Perks to consider adding to your benefits program include:

  • Flexible hours
  • Paid time off (PTO)
  • Remote work

Offering remote work and flexible schedules is a great way to attract nationwide talent, not just those in your local area. By allowing your employees to work anywhere, you’ll be able to hire more talent from tech hubs like Seattle, the Bay Area, Austin, or Boston, especially with companies like Tesla2 announcing that they’ll be doing away with remote work.

PTO is also an essential benefit that will help you recruit more young employees such as Gen Zers and Millennials who favor time off and flexibility instead of more traditional benefits.

Promote opportunities for advancement within your organization

Another way startups have the upper hand on larger organizations is that your employees have more opportunities for career advancements. Your employees and potential recruits have the chance to become part of something progressive and dynamic.

Be sure to highlight these opportunities with employees and potential job candidates. Let them know working for a startup will give them more opportunities to have their voice heard, make a difference, and get promotions.


As a tech startup, you have unique opportunities for your employees that often aren’t found at larger companies. By using your company culture, flexible benefits, and career development opportunities to your advantage, you’ll be able to attract and retain employees, even in a tight labor market.

If you’re ready to offer flexible employee benefits, PeopleKeep can help! Our HRA and employee stipend benefits administration software helps dozens of startups manage their benefits in minutes each month.

Schedule a call with a personalized benefits advisor today to see how personalized benefits can help your startup attract and retain top talent

This blog article was originally published on October 31, 2014. It was last updated on June 16, 2022.



Originally published on June 16, 2022. Last updated June 16, 2022.


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