LeapZipBlog: ABKASH's blog: How do startups pay employees?

How do startups pay employees?

November 17, 2017 by ABKASH  

Ways to compensate your employees during the startup stage:

Hire stay-at-home moms and dads:Part-time employees,particularly stay-at-home moms and dads, are a secret weapon for startups. But if you plan to hire a stay-at-home mom or dad to work at your company,be wary of assigning them critical time-sensitive projects. Keep in mind that if you’re not paying them enough to cover adequate child care, they’ll be unable to prioritize business meetings over personal meetings

Defer compensation: One of the most common ways that cash-strapped entrepreneurs hire employees is by convincing them to accept deferred or delayed compensation.There are different ways to do it: a deferred cash bonus until the business generates a certain amount of revenue; an increased salary when the employee hits performance milestones or back-pay provided when the business becomes profitable.

Use equity and stock options: Another alternative is to offer employees equity grants or stock options instead of cash. This is only a viable alternative for companies that have realistic prospects for liquidity; in other words, don’t offer stock options if you don’t think they’ll be worth anything. Most companies are never sold and never have an IPO, so it’s unlikely that stock options are a worthwhile compensation tool.

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