We all know that hiring top talent for startups is hard. In a recent post I weighed in on the debate about whether or not startups should hire workaholics. Within the comments on that post, Jeff Nolan said something very interesting (which may appear a bit out of context, but that’s OK):

…the best employees are motivated by a combination of working on something intellectually stimulating, working with smart people, and making money… in that order, based on my experience.

The rewards angle is interesting to consider, but I believe that the best employee satisfaction strategy is to constantly remove barriers that get in people’s way. Google is really good about this with their engineers, they create an environment that is as friction free as possible for people to exercise their creativity, while at the same time working in concert to execute on Google’s mission.

I definitely agree with the first point. And if you don’t offer employees something intellectually stimulating and smart people to work with, I’m not sure it matters how much you pay them … the best people won’t be motivated.

And for the most part what this really means is that it’s very difficult to motivate people.

It’s very hard to truly motivate employees. Yes, working at startups can be hugely rewarding. But ultimately, most of the motivation has to come from within.

So what about all the perks and rewards that companies offer? What’s the point?

The Value of Perks & Rewards for Startups

The most obvious way of leveraging perks and rewards is for hiring people.

But do they really work? They can, but they’re far from being the best answer to hiring top talent. Fact is, if your startup is in a hotbed of activity like Silicon Valley or Boston, you’re offering all the same perks and rewards that everyone else is offering. It becomes very hard to differentiate yourself … especially if you’re competing against the behemoths like Google and Facebook. In places where there are fewer startups and less companies offering the perks that might attract startup employees, you’ll have a better chance of being able to use those perks to your advantage.

Over the last year with Standout Jobs, I’ve spoken to a lot of companies – big and small – about their recruiting efforts. And what I discovered is that a lot of big companies offer many of the same perks and rewards as Google (or similarly well-documented companies) but they do a horrible job of promoting that fact. I find this very strange, but it just goes to show you how little some companies do when it comes to developing their employer brand and promoting themselves as kick ass places to work.

And that really leads to one of the key benefits of having perks and rewards for your startup — and that’s developing a strong employer brand.

What Google does so well is promote its perks and benefits. Google tells a great employer story so that it stands out from the crowd. Lots of companies offer similar perks but don’t do nearly enough marketing, brand-building and selling to prospective candidates.

The importance of having a strong employer brand and telling a good story isn’t just that you trot out your laundry list of perks and rewards to potential candidates — the key is that others do it for you. Once you’ve built up such a positive vibe around your company, people do the selling for you, just for the heck of it. They start to evangelize your company. They say things like, “Oh ya, I’ve heard that’s a great place to work.” “Did you know they offer free lunches? Very cool…” Everyone offers free lunches! But that’s not the point. The point is that startups can build up their employer brand and positive vibe so strongly within their local community that their free lunches are much cooler than someone else’s free lunches.

Rewards Don’t Necessarily Improve Retention

Retaining employees can be as hard as finding them. And many companies will use rewards in an effort to keep employees from jumping ship. I don’t think it works. Rewards are very often fleeting, and they also come with an ever-increasing price tag. You can’t give a $5,000 bonus one year and get away with giving a $1,000 bonus the year after. You generally have to up the ante.

But rewards can be very effective at building your employer brand. If an employee is self-motivated, happy with their work and their being rewarded, you can be sure they’ll tell others. And the positive story will spread.

What Perks Work Best for Startups?

Jeff Nolan’s comment highlights something important about perks and rewards within startups, because he talks about creating a frictionless environment. Honestly, I’m not so sure Google does that anymore, given its size (and I’ve heard their “20% time for doing your own projects” is quickly becoming a myth), but that doesn’t take away from the importance of Jeff’s comment.

I consider a frictionless environment a perk. You might argue it’s a necessity (and now we’re into a semantic debate which isn’t useful), but the key is that a frictionless environment is the gift that keeps on giving. Free lunches are nice, but employees don’t spend all day eating. They do spend most of their time working (hopefully!) and providing a work environment that’s designed to make their work time effective is critical. Think about things like:

• comfortable chairs (obvious)
• any software they need
• any resource materials they need
• great computers
• sound-blocking headsets
• quiet work environments
• a killer infrastructure (proper source control, bug tracking, chat spaces, backups, hosting, etc. — all the stuff that really helps increase productivity)
• minimizing meetings (but you can’t eliminate them, just make them effective and quick)

Other great perks / rewards:

• $$ to attend conferences
• gadgets (developers love gadgets)
• more vacation time (2 weeks is silly)
• massages (probably not given by you specifically, hire a professional!)

You can probably come up with plenty more, and you may just discover some that are very creative and unique, which will help your startup stand out. But don’t focus so much on using perks and rewards as a means of hiring individual people — use them to tell a bigger story.