
Analyzing the monetary component of employee benefits at leading US startups - gingerjoos
https://www.compile.com/blog/insights/highly-valued-startups-generous-employers/
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kazinator
Health benefits for recurring or elective items are financially stupid. You're
just throwing money into the coffers of some big insurance firm. For every
dollar of routine dental work performed, you're paying a dollar fifty. Same
with recurring drug costs, massages and things like that. Insurance is a
structure for unforeseeable events. When it handles routine stuff, it's just
an unnecessary middleman taking a fat slice.

You'd be crazy to buy into a _de luxe_ health plan by yourself if you're self-
employed. I go for something minimal: no drugs or routine dental, just
_emergency_ dental and medical: for situations you pray won't actually happen.

It's so much cheaper to just pay for the massage or to have a cavity filled,
it's not even funny.

~~~
koolba
> You'd be crazy to buy into a de luxe health plan by yourself if you're self-
> employed. I go for something minimal: no drugs or routine dental, just
> emergency dental and medical: for situations you pray won't actually happen.

+1 to this entire concept.

Insurance is for dealing with catastrophes. Not to cover an annual physical or
dental cleaning.

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xienze
> Insurance is for dealing with catastrophes. Not to cover an annual physical
> or dental cleaning.

Correct, and that's why we're in the situation we're in today. Insurance
turned from, well, insurance into a bizarre discount club.

The real solution to the high price of medial procedures and prescription
drugs is to do away with insurance (as we know it today) and normalize paying
out-of-pocket for procedures and drugs like we did so many years ago, and
still do for car-related expenses. I have no doubt that if the auto insurance
industry worked the way health care insurance worked a routine oil change
would cost $3000 and the out-of-pocket expense would be anywhere from $30 to
$200 depending on how good your coverage is.

But fortunately for us, that industry can't obfuscate prices and consumers are
informed and can shop around. And the prices stay sane. Funny, that.

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madcaptenor
Also, you can do your own oil changes. Although in your alternate timeline,
motor oil pricing probably works like prescription drug pricing.

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m23khan
For some reason, our generation (GEN Y / Millennials) don't seem to care much
for their pensions or retirement planning.

I think personally it is because of our atttitude towards retirement planning
that majority of the companies today offer either no pension or almost-
entirely employee-funded direct contribution based pension system.

My Dad drilled one concept into my head in my early days of career - everybody
gets old and every old person wish to retire with pension.

I don't exclusively rely on my employer's pension plan for my retirement
planning -- on top of it, I contribute to my state defined (bank managed)
retirement funding.

~~~
CPLX
> For some reason, our generation (GEN Y / Millennials) don't seem to care
> much for...

I see a version of this statement all the time from us old people, sometimes
it ends with "purchasing homes" or "full time long term careers at one
company" say, or "retirement saving" as in your example.

I'm starting to suspect the reason just might be that the new generation
doesn't actually have any fucking money or stable jobs. Just a theory.

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Cthulhu_
This is mostly anecdotal, but I don't know anyone outside the SF bubble that
has a good, stable job they're happy with and who I see working there for more
than a decade. It's all entry-level jobs these days. Can't make a career out
of that.

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tastythrowaway2
Respectfully, I think that's an unrealistically high standard to set. Having a
job that is stable and engaging with long term potential is an exceedingly
rare find for any generation. And entry-level jobs are how you make your
career - you work your way up.

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jeffwilcox
Super surprised to see that tech employees aren't funding their 401K the full
$18,000 per year. :(

~~~
enraged_camel
The conventional wisdom is to first max your 401k up to your employer's match,
then max your Roth IRA contribution if you're eligible. After that, the
optimal savings path depends on your priorities.

~~~
closeparen
If you're living in a high COL city for work, a Roth seems silly. My marginal
tax rate (keeping roughly 55% of my bonuses) is decidedly out of whack with my
standard of living (barely affording a 1BR). I'll do whatever I can to tax-
shelter money in this environment.

In retirement, I can raise my standard of living while halving my spending by
relocating to somewhere that's not a high-end job center. That would mean a
much lower income tax bracket.

~~~
enraged_camel
Whether you put money in a Roth account (Roth IRA or Roth 401k) depends on
your future earnings potential. If you think you will earn more in the future
than you do today, it makes sense to contribute to a Roth. The reason is that
you pay less taxes now than you will in the future, and money inside Roth
accounts grows tax-free.

I don't quite understand how your _current_ city's cost-of-living factors into
this equation. At the end of the day your investment choices are primarily
governed by your income tax bracket now vs. in the future. This holds true
regardless of whether you are planning to retire in a low cost-of-living city
- which is something everyone should plan to do anyway regardless of the type
of retirement account they have.

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closeparen
I expect my 401k withdrawals in retirement to be much smaller (in real terms)
than my present income, and therefore taxed at a lower rate, as my salary is
heavily inflated above what my standard of living would require due to 1)
local rents, and 2) my savings rate.

With sane housing priced and no need to save, I could live the same way on
about $45k/yr less.

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WhiteSource1
Very true. I know a lot of people who work at Mobileye (which Intel is
purchasing for several billion dollars). They aren't allowed to leave the
office for lunch.

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mbillie1
The amount of abuse and low-quality-of-life we'll put up with in exchange for
the fantasy of becoming rich is shocking. It's like buying scratch off lottery
tickets for "intelligent professionals."

~~~
watwut
I don't think it is just money. I think that many of startups sell themselves
to employees via "we are special and superior" feeling. That is way it works
best when their employees don't socialize outside of work due to long hours.
It is the same in games industry: people like the sound of "I am working on a
game", so they put up with worst conditions and pretty much any position -
interesting or not.

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hamstercat
It's hard to generalize without having the complete employee data that
companies mostly keep private. Less salary could come with more vacations, a
pension plan, better insurance coverage, or other perks. Even when job
shopping, it can be hard to compare different compensation packages fairly. In
the end though, it's all about negotiating (or lack thereof) your starting
salary and knowing how much you're worth in the current market. I found it
eye-opening when I discovered that your salary is based mostly on your
starting salary and not how well you do in your job.

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ryan606
Company managers have a responsibility to consider numerous factors when
designing a total rewards strategy (pay + benefits + career opportunities/work
environment). Among these is to deliver rewards using as efficient a currency
as possible. When the perceived value of a pay element (or benefit program or
perquisite) exceeds the economic value, then a company should deliver more of
the total reward opportunity using such currency. Many companies have
determined that perquisites are valued more highly by employees than the
economic cost to deliver such perks. (Same for the perceived value vs.
economic value of equity compensation.) By "underweighting" employee benefits,
perhaps companies are actually choosing to deliver their total reward
opportunity more efficiently than those companies which have more "market
competitive" benefit programs. Differentiation of HR strategy is not
automatically wrong.

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wflynny
These charts are just bad data visualizations, the legends are uninformative,
and this article is _very_ light on commentary. While I can see how one could
argue these support the author's brief conclusions, overall this looks like
too simple and shallow of an analysis to say anything really valuable.

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sjg007
The deal is stock options, a 4 year vest and a clear IPO at the end. All of
the companies doing/did well (tech wise) IPO'd < 10 years after founding.

Amazon (3 years), Microsoft (9 years), Google (6 years), Facebook (8 years),
Yahoo (1 year), Netflix (5 years).

We may disparage Yahoo but the initial formula was right.

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nottorp
I liked the clickbait title, why did it get changed to something more neutral
:(

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spcelzrd
The article attempts to define it, but he word "generous" here is a little
vague. If I'm making above market rate in salary, I don't really care about
401k match. At a previous employer, I had five weeks of vacation. Salary was
lower than what I made when I left, but I valued the extra time off more.

~~~
CydeWeys
Money in a 401(k) is tax-advantaged, so it counts for more than an equal
amount in salary.

In addition to match, other factors that matter a lot (but are harder to find
out up front) include what funds are available and if after-tax contributions
are allowed. Having access to low-cost funds is a huge plus, and after-tax
contributions allow for the mega-backdoor Roth 401(k) strategy.

~~~
spcelzrd
I agree that a 401k match is better than the equivalent salary. Match is often
a company policy and non-negotiable. Salary is negotiated per individual and
usually more than once over the lifetime of a job, so it's easier to get more
salary than more retirement match.

It's the pingpong tables that kill me. Why does this make me want to work
there?

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madcaptenor
Ping-pong (foosball, etc.) tables make me less likely to want to work
somewhere. At an old job the foosball table was near my desk. Whatever little
amusement I got from playing foosball was dwarfed by the annoyance of other
people playing foosball while I was trying to work. Ping-pong would be worse
because I'd be trying to get things done while balls are flying through the
air near me.

~~~
Cerium
I used to work with an old engineer who said that every company he worked for
that had a ping-pong table has closed up shop in the years since.

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ysavir
Proper title:

Highly valued startups aren't generous employers (when viewed along a single
axis)

