If given the option, would you prefer a $130,000 salary, or a $100,000 salary plus Netflix, HBO, Hulu, Spotify, a meal delivery service, a gym membership, a $20 per month allowance to a charity of your choice and a $100 per month “experiences allowance”?
As the market for tech jobs becomes increasingly competitive, companies have been forced to get creative with compensation. Salary isn't the only factor, and one Denver startup has launched to make managing perks more simple for employers.
Zestful announced today that it has launched its customizable employee perk program with $1.1 million in funding. The funding was led by Bessemer Venture Partners, Day One Ventures, Matchstick Ventures and Shrug Capital.
“Employee happiness is a top priority for so many companies, but the needs of each employee are unique and changing faster than any company can keep up with,” Zestful CEO and founder Mat Vogels said in a statement. “Individualized perks are becoming a new currency in the workplace, yet there is no easy way for companies to offer their employees what they want in a model that works for everyone.”
With Zestful, employers can set a monthly allowance for each employee, who are then provided with a Zestful Perk Card that looks and functions like a debit card. The card approves or declines transactions based on specific products or categories that the employer has pre-approved from the Zestful catalog.
Currently, the Zestful catalog includes hundreds of popular services like Spotify, Netflix, Uber, Coursera, Airbnb, gym memberships, meal delivery kits and Southwest Airlines. Employees are even able to donate any leftover monthly allowance to charity.
Before launching Zestful, Vogels surveyed nearly 3,000 tech employees on the above question. Would they rather a $130,000 salary or a $100,000 salary with a host of perks.
He was stunned by the results.
Nearly 80 percent of respondents chose the lower salary with perks, despite the perk value only totaling around $6,000.
Zestful’s new model has seen high usage rates, with 94 percent of employees who have a Zestful Perk Card using it every month, with an average monthly allowance of $100.
"Before joining Zestful, many of our customers had perk program usage rates of around 20 percent, which makes it hard to justify the time and cost. This is why most perk programs ultimately fail," said Vogels.
Zestful costs $5 per employee per month, and there’s no commitment required.
With employee compensation changing, Natty Zola, partner at Matchstick Ventures and Techstars managing director, said Zestful's model is the way of the future.
“We see Zestful as one of the most exciting companies out there because of its ability to financially benefit both employers and employees, and it should also improve people’s happiness and well-being, which we love,” he said.
