Small and midsized tech companies face many challenges, but none may be as difficult as attracting and retaining talent. The task is especially difficult given what these high-growth companies are up against in Silicon Valley. Consider the following:
- Google offers one-on-one consultations to new parents to help them find child care facilities
- Intuit has onsite fitness centers for employees and offers $650 for gym memberships and exercise class fees
- Netflix now offers a year of paid maternity and paternity leave for salaried employees
- Twitter employees receive Zipcar discounts, access to in-office yoga and Pilates classes, and dry cleaning and laundry services
In addition to competing against cash-rich tech companies, smaller firms are grappling with increasing healthcare costs and are stuck in a new pricing system that doesn’t allow for effective rate negotiation. According to a survey by Mercer, a Marsh & McLennan Agency (MMA) sister company, employers predict that health benefit cost per employee will rise by 4.2% on average in 2016 after they make benefit plan changes, such as raising deductibles or switching carriers. This is consistent with actual cost growth in 2014 (3.9%) and the expected cost growth for 2015.
So how does a promising tech company bring in the talent it needs when the tech giants are grabbing up the skilled employees with higher salaries, generous 401(k) plans, and impressive healthcare benefits?
One way small and midsized technology companies can compete is to take advantage of a small business trust. A relatively new way to lower employee benefit costs, tech companies are pooling their collective buying power to compete with the giants on robust healthcare benefits.