If you are a small business or startup looking to raise capital, you need to understand how your total rewards program (compensation and benefits design) is viewed by Venture Capitalists, Angel Investors, and other early-stage investors.
I had the chance to sit down with Fred Green, Principal at Somerset Capital, and learned an insider's perspective. https://www.linkedin.com/in/fred-green-4481482/
"Historically benefits including healthcare were afterthoughts for small companies, venture-funded companies, or pre-venture backed companies. The company was focused on its “knitting” and rarely had an HR function outside of hiring or finding talent...
Now benefits can be a leading factor in finding the top talent – and it lowers the overall cost immediately and in the future (stock options, etc). Many top talented people make final choices based on the overall compensation and benefits package. Lower initial cash payouts (1099 or W-2) are required to land the top talent if you offer benefits and retention of people goes up significantly. Benefits are also proactive ways to improve the quality of the workplace and the professionalism of the workplace. The advent of software systems such as Workday, Kronos, etc. makes it much easier to manage many HR functions without a true dedicated person/staff, and utilization of integrated benefits by employees on a self-service basis is a “have to have” at this point.