Start Ups

Startups face a host of challenges while expanding during their initial and growth phases, ranging from sourcing funding and financing for the business, renting office space, to the uncertainty of income and revenue, all of which pose significant challenges for the business. The challenge that has the greatest impact on the success and survival of the business are the human capital issues startups face. These human capital issues can range from regulatory compliance with a host of employment regulations, and most importantly, to attracting, engaging and retaining the proper talent needed to succeed.

There are three main talent management considerations a new startup should and absolutely need to focus on once a hire has been made. The three talent management considerations are commitment, compensation and benefits, and finally motivation. These challenges are not unique to startups, but typically have a significantly larger impact on the success and viability of a startup than that of a seasoned operation.


One of the biggest challenges many startups will face is finding and engaging staff who possess the same level of commitment to the organization as the founders. As an excited and passionate founder who is following their dream, founders are nothing but fully committed to the success of the organization. Failure is not an option and only success can be seen as the light at the end of the tunnel.

Founders are in it for the long-haul. It is quite often founders have personal financial ties to the success or failure of their endeavors. As a true entrepreneur, founders will be fully committed to their endeavors. For this reason, fueling the spark for commitment to the organization is easier for founders than it is for non-founders. Non-founders are employees. Employees will always have a different sense of commitment. Therefore, commitment will always be a challenge for startups as no one will ever be as committed as the founders and/or owners of the company.

The commitment of employees of the organization begins with their belief in the mission and their founders’ ability to lead them to success and their compensation.

Compensation and Benefits

Depending on available funding and the source of funding, being able to attract and retain the best and brightest will always be a challenge. The real challenge is finding those who want to be part of the startup culture and environment, and those who believe in the mission themselves. If the founders are willing to give, and the employees are willing to accept equity as a portion of compensation, this could be a viable solution for startups to attract the right talent. Keep in mind this must be an exact fit, and sometimes experienced staff may be taking a 30% to 50% pay cut to join a startup with equity compensation.

Benefits are another significant challenge for startups. If a startup can provide and has the budget for benefits, they will likely be more expensive for both the employee and company than most larger organizations. Options do exist however, such as co-op style marketplaces for benefits, where the company budgets what they want to pay and the employee will pay the difference based on the plan they choose.


As mentioned above, terrific benefits and direct compensation are generally not a differentiating competitive factor for startups in acquiring talent. However, startups can usually get the edge in the intangible benefits and fringe benefits that are more easily provided to a small staff of employees rather than a large staff of employees.

Some fringe benefits a startup can consider utilizing to combat the competition of large employers are engaging and lively workspaces. Since a startup may need less space, they can likely splurge for some unique designs and features in the workplace. Meals, snacks and beverages are also nice little perks. Even some well-known tech companies started out offering free cereal. Additionally, fun, games and extracurricular activities can be used to build motivation — these options are much more affordable for a small startup than a large corporation.

The work environment provided by startups such as all-staff meetings, transparency, celebrating growth and wins, and direct communication with leadership are all characteristics that startups can use to their advantage. Once the right talent is found, maintaining a significant balance between compensation, benefits, commitment and motivation will create an environment of effective and collaborative employees who are just as on-board with the mission as the founders.

If you have any questions please do not hesitate to contact us at or 702-979-2119.

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