These days, employee benefits are an important part of doing business, especially for startups. Fast-growing businesses that take care of their employees are the ones that stand out from the crowd as a great place to work and a highly valuable company.
We’ve identified three major benefits of providing startup employees with health plans and asked a couple high-growth Toronto tech companies, Wattpad, CrowdRiff and PumpUp, to weigh in.
- Compete for top tech talent
Shopify is one of the many tech startups in Canada that has realized it needs to ramp up its employee health benefits if it wants to attract and retain the best talent. In Toronto especially, the competition is strong.
Toronto has between 2500 and 4100 active tech startups (Dingman, 2016). When combined with its more established counterparts, the city accounts for 35% of Canada’s technology businesses, employing about 159,000 people (Martyn Bassett, 2016). A combination of tax changes for foreign investors, an effort to concentrate startups into creative hubs, and the success of a few tent-pole companies, like FreshBooks, Wattpad and Influitive, has put Toronto on the map as a place for more startups to flourish (Dingman, 2016).
“Entrepreneurs and investors speak highly of the linguistic and ethnic diversity of Toronto’s talent pool, which is also boosted by its close proximity to several world-class engineering schools and universities” (Dingman, 2016). According to TechCrunch, Toronto produces the most engineering-focused university graduates each year in North America (Martyn Bassett, 2016). Mayor John Tory believes Toronto is sitting on a talent gold mine that can help the city build the economy of the future (Dingman, 2016).
While this bodes well for technology professionals working in Toronto, it represents huge challenges for employers, especially new tech startups who require top talent to grow their businesses. There is a huge talent shortage in Canada, and too few qualified candidates to fill the jobs available. As a result, tech companies are in stiff competition to attract and retain employees (Sagan, 2016).
- Attract and keep top performers
Behind salary and growth opportunities, employee health benefits are one of the most competitive ways startups can attract and retain talent. Despite this, 70% of small businesses – which make up 80% of all businesses in Canada – don’t offer health benefits at all (Brownell, 2016). This needs to change.
1 in 3 young workers say health benefits are the most important employee benefit they expect (Benefits Canada, 2015). And in the case of some employees, it’s a deal breaker. “We’ve seen scenarios where (due to personal or family health reasons) a candidate would not have been able to accept a job offer if employee health benefits weren’t included,” explains Jody Davis, Head of Finance and Administration, CrowdRiff.
In the war for talent, startups can’t afford to fall behind.
“You can give a developer X amount of dollars, but there’s such a shortage of developers in this market. You have to go above and beyond – you’ve got to take care of them.”
– Chris Gory, Founder of Insurance Portfolio Financial Services (IPFS)
Martyn Bassett, Founder of Martyn Bassett Associates, a premier recruiting firm for tech startups in Toronto, offers a unique perspective from someone who plays intermediary between startups and employees. “When we get to the final stages in an offer discussion, I ask the clients (who are early-stage startups) what the benefits plan looks like,” explains Martyn. “We have encountered situations where a candidate has turned down an offer because the company didn’t offer a health benefits plan.”
This demonstrates somewhat of a disconnect between what startups consider an attractive offer, and what employees expect in their standard employment agreement. “It’s table stakes,” explains Martyn. “It’s just expected that a company is going to have some sort of benefits plan.”
The good news is that some startups are listening to what the market is demanding.
“Toronto is very competitive and we are all looking for the same A-level talent. We put our money where our mouth is and ensure we have a plan this is impactful and takes care of our people.”
– Bonnie Busby, Head of People, Wattpad
- A healthy workforce is a happy workforce
For startups, the advantages of offering employee health benefits are two-fold:
- Employee Happiness
- Greater Productivity
“A healthy workforce is a happy workforce – there’s a direct correlation between the two,” says Jody Davis from CrowdRiff. Happy and healthy workers are more productive, miss fewer days of work due to illness, and are less likely to request costly drugs later on down the road (Posadzki, 2016). By offering preventative healthcare services, like remedial massage, acupuncture, gym memberships and Employee Assistance Programs for mental health, employers can foster greater productivity in the workplace. These types of services are especially important for employees working in highly stressful startup environments.
PumpUp, a Toronto-based start-up in the health & fitness industry, is one company embracing this philosophy. On top of flexible hours and vacation policies, PumpUp offers a comprehensive health & dental benefits plan that includes massage and chiropractor services, free healthy snacks and lunches, as well as weekly outings such as rock climbing and biking (Hamilton, 2016). “We try to give our employees the tools they need to live a healthy lifestyle,” says Phil Jacobson, President, and Co-Founder of PumpUp. “Through empowering them to be both physically and emotionally well, they are more energetic and focused at work.”
What do you think of these three benefits of employee health plans? Share your thoughts in the comments or drop us a line.