The Simple Truth: Happy People, Healthy Company

How generosity can be a competitive advantage for early-stage startups

By Andy Palmer, Co-Founder and CEO, Tamr, Inc. 

There’s little doubt that early-stage startups, with their bootstrap imagery and upside potential, could get away with giving short shrift to professional development, offering bare-bones “one size fits all” employee benefits and imposing strict non-compete limitations.

But why would you?

The fundamental decision to be made by any startup leadership team – Tamr included – must be how to attract and retain the best people. If you do this consistently as you grow, you will radically improve your odds of becoming a great, successful company in the long run.

I’ve written about the importance of leaders practicing “retention through professional development.” A primary tool for keeping your best people is simply to provide them “with better opportunities to develop professionally than they could get elsewhere.” If people believe that their leaders are committed to providing them with authentic opportunities to develop, they quickly dismiss the passing job offer that carries a superficial title and more money. The individuals — the good ones — know that it’s real experience and results that are the foundation of a strong career rather than trying to climb some artificial title ladder by hopping between companies.

Authentic growth opportunities are core to long-term professional development. But what about the short term? Beyond the work, what helps keep people coming to the office happy and productive day in and day out?

Creating a “best place to work” means much more than branded t-shirts and an occasional Friday night kegger (neither of which I’m opposed to by the way — and I do love Splunk’s t-shirts). It means you cannot ask your most valuable resource — your people — to choose between the “upside potential” of start-ups and the pressures of daily life that essential employee benefits are meant to address: personal/family health care, parental leave, caring for an elder parent, and saving for retirement. It means, instead, providing people with a baseline level of security in their home life so that they can work better without insecurity and discomfort, so often the staple of early-stage startups. And it means, beyond productivity, your best people choosing to remain at the company longer – allowing you to avoid the deadly financial trap of spending twice the amount to replace employees than to retain them.

At Tamr, we’re translating these beliefs into practices we’d like to think other startups will at least consider following:

Start with offering all full-time employees the basics, including “table stakes” such as Medical and Dental coverage, Life Insurance & Long-term Disability, Health Savings and Flex Spending Accounts. Also a 401(k) plan, with no enrollment waiting period. And while there are many approaches to employee ownership, mine is to provide equity ownership opportunities to all employees.

Beyond these basics, challenge yourself to “walk the talk” through other benefits designed to support a core belief that we’re driving through Tamr: treat people with as much respect for their personal lives as their professional lives.

Self-Managed Vacation Time – I believe most employees are capable of deciding when and how much vacation they need, with manager approval, whether it’s an afternoon off to get some errands done or a week on an island. As HubSpot’s Mike Volpe suggested in his terrific recent post on the topic, time has great value to all of us, but each of us exercises it differently. Rather than assuming your people can’t manage their own time and trying to control when they take time away from work via some “one size fits all” vacation policy, I prefer to trust that people know the amount and type of personal time they need better than some arcane HR policy. At the core of this approach is the belief that the people who work with you are internally motivated to help the company succeed and can manage their professional time well enough to deliver the results required for the business to be successful.

Realistic Parental Leave Policy – Committing to a family-friendly environment means recognizing that the birth or adoption of a child is a joyful, life-changing event that requires a balance between family and work obligations. Having kids is insanely hard work and finding balance can be especially difficult – and beneficial – at startups. At Tamr, we went ahead and implemented a Parental Leave policy that compares strongly with other, much larger tech company policies hailed for their progressiveness: 18 paid weeks for a primary caregiver and 10 weeks of paid leave to employees who are not the primary caregiver.

Benefits Chart

Care.com – We all feel the challenge of maintaining a good work/home-life balance in an often-intense startup environment. To alleviate some of this pressure, consider services such as Care.com, which enables employees to use (in Tamr’s case) up to 10 days per year to have a qualified caregiver come to their home for emergency child care or elder care, at highly subsidized rates. We rolled this out to Tamr folks last fall and it has been our most popular benefit by far — especially valuable during the insane winter we’ve had here in Boston. More than a half dozen people at Tamr took advantage of the Care.com benefit through the snow storms in January and February — during which time many schools and daycare facilities were closed. Amazingly, local Care.com babysitters were available to come by and help out during the storms.

Finally, and most importantly, I believe that ALL startups should adopt a policy of ours that fits squarely in the category of “good for employees, good for business”: Fair employment policies that include no requirement or enforcement of non-compete agreements.

In Massachusetts, we’ve seen the deleterious consequences of non-competes in our local startup ecosystem, including frustration, and even alienation, of top intellectual talent who want to find the right “home” for their life’s work. This results in a corresponding reduction of entrepreneurial energy and economic productivity within the startup ecosystem’s most valuable contributors.

Tamr is one company that’s taken action on this, but certainly not the only one. Tom Erickson, CEO of Burlington, Mass.-based Acquia (which announced in May 2014 that it had eliminated non-competes for new hires and wouldn’t enforce them for existing employees) and I were among more than 20 company founders/leaders, venture capitalists and other business leaders who testified in June 2014 before the Massachusetts state legislature in support of banning the enforcement of non-competes in Mass.

I’ve long believed that we have to use our inherent spirit of innovation and entrepreneurship to make “the US the best place for the smartest and most ambitious people in the world to start new, innovative companies.” Non-competes as enforced in our home state of Massachusetts undercut this very culture of innovation, squelching professional growth opportunities that depend on a certain amount of talent movement within our industry.

In brief, smart startups want healthy, happy and motivated employees, working in an environment – both inside and outside the company walls – that provides massive opportunity for company and personal growth.

It’s that simple.