Austin has been hailed as one of the top places to have a startup. These same qualities have also brought in the big companies which keep this whole wheel turning for our community. A community that has not even broken a seven-figure population in the city of Austin.
With so many companies coming to Austin, our unemployment rate is 3% as of February 2018. This is amazing for the economics of the city and the workers who live in Central Texas. Every resource is subject to the law of supply and demand and the demand for capable employees in Austin often outstrips in the short term the supply. This has created a need for companies who are looking to hire in Austin to offer higher wages and benefit packages.
As a growing startup, at Abraxas we understand that we are in competition with better funded and much more established companies. I know that we are not the only startup that is growing and looking to find top talent. Therefore, I wanted to outline a few different ways that we at Abraxas have used to attract the right talent without going belly up.
With any competition, where does that leave the bootstrapped and funded startup?
The biggest weapon in your toolbox is the dream of your company. It is the same dream you have to sell to investors, customers, and now to your potential employees. Once again with any risk, there needs to be a reward. Some of your most talented workers have probably been in larger corporations for so long that they may want to take an adventure. Everyone dreams of glory in their own way, it is up to you to show them how they can hit that mark by coming to work with you. At the same time, there are a lot of people, due to financial responsibilities, cannot afford to take a serious risk. Making sure that you are attracting candidates who can handle the risks that are associated with a startup is key to making sure that the candidate is going to be a good fit for your company and that your company is going to be a good fit for the candidate.
Healthcare is the second hammer in your toolbox to really get the star talent you need to grow. This seems like a potentially huge undertaking to offer benefits but there have been some great steps in making health care benefits accessible to small companies and startups. So I want to outline the basics and a few of the plans we reviewed (for our employees) to help you get that talent.
For those who do not even know the basics, (don’t worry, I didn’t either when I first started out), you have to offer healthcare benefits to all “full-time employees” of your company and make sure you are compliant at all times with appropriate state and local laws (We’re in Austin, so you better be prepared). This doesn’t mean that everyone has to take the benefits you offer (they can waive their coverage for your company).
The cost of coverage will range on multiple factors. Depending on which healthcare plan an individual employee selects, costs to the company can range from 40-75% of the employee’s premium. For example, if my plan costs $1,000 a month, Abraxas would cover up to $750. Most coverage for a person in their 20-30s will fall around $200-$600 that the company will cover per employee. Costs will vary mostly depending on the plans you offer and the age of the employee.
This snapshot is of the normal plan of copays and what the average cost for each plan would be. The summary of all these plans look great, but some of these plans cost $2,300 per day if you go into the emergency room and it does NOT go towards your deductible. When reading through the whole plan, look at these key items as they can cost the most: facility fees, outpatient services, inpatient services and drug level. These items can be found in the SBC provided by each coverage.
Here is another common plan that we have looked at. These types of plans offer 50% copay, which shifts most of the costs to the employee.
What it boils down to is that you need to make up the risk by providing the most benefits you can. For one of the top plans, it’s going to cost your company $30,000 a year for 8 employees but it can be a key differentiator between your startup and the other startups vying for top talent.
Conscience Capitalism is a term that is often thrown around in Austin, but when you look across Austin’s startup landscape it isn’t as prevalent in practice as it is in voice. Beyond the social and cultural reasons, we believe at Abraxas Technology that it is important to take care of our employees. We know (and studies show) that it is good business to take care of our talented employees. If you don’t take care of them, you will be out of business faster then you started.
If you are a startup looking for advice or a star player looking for glory, please reach out to me at firstname.lastname@example.org.
Justin Gilfus is the CEO and Co-Founder of Abraxas Technology.
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