Navigating Holiday Perks and Policies: How Startups Manage the Season
At this time of year, startups face the challenge of attracting and retaining talent through bonuses, vacation time, swag, and gifts — all while contending with limited funding. They also need employees to remain productive and must navigate the ethical dilemma of providing a healthy work-life balance. Balancing these competing priorities requires thoughtful consideration to ensure employees feel valued, motivated, and supported, even when resources are constrained.
Seasonal Benefits
As startups prepare for a competitive 2025, they are balancing limited resources. Here’s what startups are bringing to the holiday table as we enter the New Year:
Holiday Parties: This year, startups are balancing budgets and flexibility by hosting smaller in-person gatherings, hybrid or virtual events, team-building activities, or wellness-oriented alternatives to celebrate the holidays.
Swag and Presents: Some startups offer gifts in one form or another. Popular swag and gift ideas include custom long sleeved t-shirts, hoodies or gift certificates. Try a “Secret Santa” at your holiday party.
Vacation Time: Startups have implemented various Paid Time Off (PTO) policies, including flexible time-off allowing employees to choose when to use their days, buy/sell programs to purchase or sell back days, and unlimited PTO policies that demonstrate trust and simplify administration.
Bonuses: Some employers are giving holiday bonuses this year, with the most common amounts falling between $101 and $250. Many employees prefer cash bonuses over other perks, with the vast majority choosing cash over both company stock options and additional PTO.
Alternative Benefits: Offering alternative benefits such as professional development and certificate training, vested stock options, parental leave, wellness stipends, commuter benefits, flexible work schedules, and cell phone reimbursements continues to be the trend
Family-Friendly Policies: There are two from mostly later stage companies:
Parental Leave and Family Planning: Startups such as Reverb provide comprehensive parental leave policies along with family planning benefits, which include financial support for fertility treatments.
Childcare Support: Companies like Duolingo offer backup childcare services, assisting employees in managing their work and family obligations effectively.
(Startup CEOs, CFOs, CPOs, and board members shared their insights on the seasonal benefits highlighted above. Some of the information was sourced from the survey: Most Employers Are Giving Employees a Holiday Bonus in 2024)
The Annual Debate
A recurring debate among a startup’s CEO, CFO, and executive leadership teams is whether to shut down operations during the final days of December and the first week of January. With minimal new sales and customer activity and productivity naturally dipping during the holidays, some advocate for a complete break to allow employees to recharge. Others, however, view this slower period as an opportunity for strategic planning and addressing internal tasks — like optimizing critical operations. Ultimately, the decision depends on each company’s priorities and culture.
Conclusion
This holiday season and In the competitive landscape of 2025, startups must strategically balance compensation, policies, and perks to attract top talent, even as comprehensive benefit packages remain largely offered by later-stage or post-IPO companies.