In a competitive job market, budget constraints don’t have to stand in the way of attracting and retaining top talent. While salary offers are a big part of the consideration for candidates, they may also value other benefits that improve their work flexibility, career trajectory, and long term growth. When Avenir helps clients negotiate on a budget, here are some creative and cost-effective benefits to consider that may help overcome a limited budget.

1. Remote or Hybrid Work Arrangements

Offering flexible work options has become one of the most sought-after benefits — and increasingly one of the top two benefits employees are willing to trade for some compensation. A recent Forbes study has shown that “40% of workers would take a pay cut of 5% in order to work from home. And almost 10% would take a cut of up to 20% if it meant that they didn’t have to return to the office.”  In addition, moving to a remote or hybrid arrangement would also allows companies to target candidates in more cost-effective regions that may naturally result in lower cash compensation.

2. Equity or Stock Options

Equity is one of the other significant benefits that Avenir sees employees trading for cash compensation.  Given most private equity portfolio companies we work with have a defined investment time horizon and return target, the risk of monetizing equity is more manageable than with a venture-backed company and easier to value.  Thus, this can be a big incentive if there is a limit to cash compensation flexibility.

3. Performance & Sign-on Bonuses

Many of our clients are profitable companies that are experiencing significant growth.  That means while they may be more cash constrained today, achieving their targets will unlock more cash for salary and payroll.  We have seen clients propose specific salary increases based on Company performance and thresholds that are a win-win for both our client and the candidate.

Sign-on bonuses can be classified as a one-off expense that will not impact EBITDA and valuation.  Either by itself or in combination with a performance bonus, it can help bridge a salary gap.

4. Clear Career Progression Paths

We encourage candidates to take a holistic view of their career — not only what a current role is, but what is the potential for learning, development, and experiences that can get them to their ultimate career goal.  Having transparency and a roadmap to achieving this, especially with a clear timeline, not only offers a way to differentiate the hiring Company from competitors but also increases retention and loyalty.

5. Opportunities to Work Across Portfolio Companies

Candidates we speak with often want to start or continue a career in private equity.  The ability for funds to offer the potential to work across their portfolio companies or at the investment fund is a significant and unique opportunity other organizations cannot offer.  After all, why not retain the talent you have nurtured and deploy them across the entire portfolio?  This fosters engagement and can mitigate questions of what happens post-transaction.

When budget is tight, creativity becomes your greatest asset. Avenir can help you tailor the right offer to not only land the top candidate, but also help them grow into a more valuable asset that can be deployed across the Company and the fund.