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From Startup to Successful: Leverage Your Employees Financial Pathways

Traditionally, people’s goals usually consisted of getting an education in a certain field and then finding a good and stable role in a reputable company. While this is still a goal for many people, the increasing amount of startups has brought more opportunities and career paths.

With established companies, you know what you’re signing up for, but committing yourself to a startup can both be risky and give you the potential for growth. Startups often offer other financial incentives outside of salary. 

For example, 1% of equity is often given to employees as a way to boost their loyalty and motivate them to invest more time and energy into the startup. This article breaks down some of the best financial pathways for motivating startup employees and ensuring the success of your company. 

Use equity plans 

One of the best ways to motivate employees is to make them feel like the company they are working for is theirs. Through equity plans, employees will be awarded shares of the company in the form of stocks, warrants, or bonds. 

Employees who have shares in the company will likely be more engaged, and the chances of top talents leaving the company will be lowered. Since the success of the company will be tied to the employee’s financial expectations, equity plans can significantly motivate each employee.

Furthermore, equity plans ensure that everyone involved aligns with the company’s values and long-term goals. However, a problem with equity plans is that this involves a lot of documentation and onboarding. 

With applications that allow you to automate your equity planning, you can significantly streamline the process of onboarding, taxing, and filing documentation. These platforms are especially helpful if you have international employees. 

There are numerous grant types, making it hard to effectively handle international teams, but such applications make this portion of the work much more manageable.  

Merchant Cash Advance 

Loans or credit cards have been the traditional way of seeking money to invest in the business. However, there are numerous reasons why this can either be impossible or unprofitable. Regardless of the reasons, a good alternative for getting money for investing is a merchant cash advance. 

If you’re wondering what a merchant cash advance is, it can be quickly described as an upfront working capital to businesses in exchange for a percentage of future card sales. This isn’t a loan, as the MCA giver will have a guaranteed percentage of future sales.

The associated costs are calculated in the form of a percentage or a factor rate. The great benefit of MCA is that it’s obtained as soon as it’s approved, making it quite helpful for emergency purchases. 

The amount calculated is repaid through a daily, weekly, or monthly percentage, rather than fixed monthly payments. Furthermore, MCA can provide unrestricted use of funds. Banks can require you to provide them with a plan of investment. MCA doesn’t have any impact on your credit card score. 

MCA is a great option for startups, as unexpected expenses can emerge. So, instead of being late on salaries or other expenses, MCA can be a bandaid that will help you mitigate the risks. In the long term, it won’t be harmful to your financial status, but it shouldn’t be used at all costs.

Financial education workshops

A great way of motivating your employees is to hold regular workshops. They can be aimed at improving their professional or interpersonal skills, but we’re talking about finances in this article.

Financial education workshops can be organized to help your employees with their personal finances and budgeting. You can alleviate some of their stress by teaching your employees how to create and maintain a budget that aligns with their income, expenses, and financial goals.

These workshops can cover anything from budgeting to stocks and investing. Many people, especially younger employees, might now know how credit functions and its implications on one’s financial well being.

These workshops can be unstructured, or you can run a survey that will help you understand the most common financial problems that your employees have. The goal of having financial education workshops as a startup is to make your employees more motivated and to help them with their financial situation.

This way, you’re improving your reputation and employee engagement while also building trust between your employees and your company. 

Employee Assistance Programs (EAPs)

EAPs are a valuable resource that aims to provide employees with the necessary support in financially challenging situations. This is a support system that’s aimed at helping employees with their financial situation, yet it brings a lot of improvements to their overall well-being.

One of the best advantages of EAP is that it offers confidential counseling services. These counseling sessions are conducted by licensed professionals who can help the employees alleviate the stress related to their personal and work-related issues.

Furthermore, within the scope of EAP, financial counseling is often included. Just like previously mentioned financial education workshops, these financial consultations can help employees understand their financial situation, devise a plan, and help them manage and reduce debt.

During difficult times, EAP can provide immediate interventions in the case of a crisis. With the various benefits that EAPs bring, employees will appreciate the environment they work in, because it will reflect positively on their overall well-being. 

Matching retirement contributions

Long-term financial security is pursued by many. One of the best ways to provide this to your employees is through retirement contributions. Plans such as 401(k) or 403(b), allow employers to contribute a percentage, or an amount, on a monthly basis while an employee is working at their company. 

Retirement plans allow individuals to feel comfortable in the long run with their financial situation. Unfortunately, not all employers provide retirement contributions, allowing you to separate yourself from other options on the market. 

If an employee has to choose between your company and another one that doesn’t offer benefits in the form of retirement or healthcare plan, there’s a higher likelihood that they will choose you. 

Retirement plans also encourage talent retention, providing employees an incentive to stay with your company over a longer period of time. 

Financial and non-financial wellness platforms

The amount of applications that offer traditional services online is increasing. Starting from healthcare and therapy up to physical fitness, there are numerous opportunities that you can implement for your business.

Subscription-based services often provide a trial, allowing you to try it for free and to cancel it in case you don’t need the service anymore. Although it is unlikely that providing these opportunities will do a 180 in terms of employee satisfaction, it’s a great bonus.

Non-financial wellness platforms that offer online counseling or mindfulness content can help your employees alleviate their stress, and work on their well-being. Wellness platforms can also provide employees with a place where they can share their problems and receive the needed support.

On the other hand, there are a lot of platforms that can provide comprehensive financial tools for employees. Starting from a place where they can receive their salary up to taking loans and budgeting. 

Student loan assistance

Building long-term relationships with employees is essential. One of the best ways to ensure their loyalty and commitment is through assisting them with key aspects of their professional life, such as education.

By helping your employees pay off their student loans, you’re helping them with their professional lives, as well as their overall well-being. Student loans are a major stressor in the lives of young adults, and helping someone with this is a praiseworthy activity.

Numerous financial institutions allow you to make monthly contributions towards employees’ student loan payments. 

Proper financial wellness programs increase morale and engagement 

There are numerous ways in which you can motivate your employees and make them more engaged. Along with a high salary, various financial wellness programs can significantly help with developing strong bonds between your employees and your company. 

These methods are only a portion of the total options that you can leverage to establish a successful startup. However, think of these incentives as a supplementation for a company that’s already operating successfully. 

If employees don’t think that the startup has a future or if they are unsatisfied with some other aspect, these plans won’t do much to motivate them. Instead, you should first focus on setting up a strong foundation in the form of good operations, and implement these plans after you’ve set up the baseline. 

 

About Writer

Veljko is a student of information technology who paired his passion for technology with his writing skills. He enjoys researching topics such as robotics and programming and cultivates his knowledge in philosophy, classical literature, and fitness. Veljko’s favorite writers are Borislav Pekić, Miloš Crnjanski, and Ernest Hemingway. 

Veljko Petrovic

Writer Veljko 

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