• May 2019
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Should Startup Employees Prefer Stock Options or Significant Salaries?

lawtrades temporary legal staffing employees

The terms of a candidate’s employment contract are not always negotiable. Depending on an industry’s standards, government regulations and a host of other factors, the kinds of compensation offered to a prospective employee may be restricted or fixed in a number of ways. But most of the time, companies have many options when constructing both a job description and a compensation package that aims to target the best possible candidates for any open position.

But because so many options are generally available, it can be challenging to know exactly what top candidates may desire in a compensation package. Offer too much and a company’s bottom line suffers. Offer either too little or the wrong kinds of compensation and an ideal candidate may walk away from the available opportunity. When it comes to salary, stock and benefits, how does a company strike the right kind of compensation-related balance?

The answer to that question is complex, partially because there is no single “right” answer. A number of variables will impact a potential candidate’s ideal compensation package. The key to striking the right balance when it comes to any particular open position is to be aware of these variables and to strategize accordingly. When necessary, it may also prove valuable to consult with professionals experienced in recruitment and compensation package construction as that process pertains to your particular industry.

 

Salary vs. Stock vs. Benefits

Equity in a company that has significant potential for growth and industry-wide influence is a highly valuable commodity. Many would argue that stock in a truly promising startup or successful established operation is far more valuable than a sizeable fixed salary. However, not every candidate feels this way. While creative startups, companies within the tech industry and other opportunities that may appeal to candidates who are usually younger and less risk-averse may prefer stock options, candidates drawn to more traditional industries may prefer the stability and reliability associated with a high fixed salary and substantial retirement benefits. In addition, preferences may rest upon a candidate’s education level, the location of the startup seeking talent, standards within a given industry and a worker’s age.

It is also important to remember that many potential candidates for various positions will value certain benefits even more than shares of stock or higher wages. For example, many individuals now view a flexible and/or remote position as a singularly valuable arrangement. Top candidates may be willing to work for less provided that they can largely set their own hours and/or work in their pajamas from time-to-time.

 

Startup and Recruitment Assistance Is Available

A creative perception of what it means to offer candidates “benefits” may help you recruit and retain top talent within your industry. If you are interested in recruiting top talent for your company and/or need guidance related to the construction of competitive employee compensation packages, please consider connecting with the team at LawTrades.