As your company moves beyond the early stages, your role as a founder evolves, too. You’re no longer just hiring to fill immediate gaps; you’re building an organization.
Between managing a growing team, formalizing benefits, and staying compliant with new employment laws, this phase marks a major shift from startup scrappiness to structured growth.
At this stage of company growth, we usually see founders start to navigate the following hiring and retention approaches. You’ll begin layering in policies and systems that not only attract and retain great talent but also protect your company as you scale — from offering health coverage and retirement plans to setting time-off policies and maintaining compliance with OSHA and nondiscrimination laws.
Benefits packages
You have a few key categories to consider here:
Health coverage
When employees join an ultra-small team, they usually know that means accepting a minimal benefits package. As your company scales, though, so will employee expectations for perks.
Health insurance is a huge one here. If your company’s not yet in a position to manage a group health plan, you might want to consider offering a healthcare stipend to team members.
A healthcare stipend can be a great in-between option. This is a set amount of money you give employees to help cover their own health or wellness expenses, like insurance premiums, doctor visits, or gym memberships. It gives your team flexibility to choose what works best for them. Just remember that healthcare stipends usually count as taxable income, so make sure they’re included properly in payroll.
Offering this kind of benefit can go a long way in showing employees you care about their well-being, even as a small but growing business.
Fringe Benefits
Beyond healthcare, fringe benefits are the extra perks employers offer in addition to regular pay, such as paid time off, retirement contributions, bonuses, or wellness stipends. These benefits help attract and keep great employees while supporting their overall well-being. Some fringe benefits, such as health insurance or retirement contributions, are usually tax-free, while others, like cash bonuses or stipends, are taxable. Be sure to review IRS guidelines on fringe benefits carefully to ensure you’re handling taxes and reporting correctly.
Even small perks can make a big difference in showing your team they’re valued and in creating a positive, supportive workplace culture, which we’ll delve into in the next section.
Paid and unpaid time off
First, set a policy for which holidays your company gives employees off with pay.
You should also develop a clear plan for your paid time off (PTO), also called paid vacation time (PVT). Will your company offer that separately from sick time, or does PTO and sick time aggregate in a single bank? Do employees earn PTO as they work more hours, or do they get a certain number of days over set time periods?
As you’re working on your time-off policy for employees, consider parental and bereavement leave. Even if your company can’t afford to pay for some or all of it, offering protected leave to your employees can help you retain talented people during seasons of transition in their lives.
Retirement plans
Your company may want to offer a way to help employees save for retirement. For small businesses, the best options here are usually Savings Incentive Match Plan for Employees (SIMPLE), individual retirement accounts (IRAs), or 401(k)s. Your CPA can help you figure out the best option for your company and your team.
With your retirement plan in place, you can start monitoring the possibility of offering an employer match to your employees. It might be too early now, but planning for that in the future helps you build out a more robust benefits package as your company grows.
Nondiscrimination laws
At 15 employees, your company needs to comply with the Americans with Disabilities Act (ADA). Title VII kicks in, too, which prohibits discrimination based on race, sex, religion, and more. Your hiring and employment practices can’t be discriminatory toward protected groups or you risk penalties.
At 20 employees, the Age Discrimination in Employment Act (ADEA) goes into effect, protecting employees ages 40 and over.
OSHA requirements
Technically, U.S. employers are required to provide a safe work environment, no matter their size. But at 10 employees, you’re subject to recordkeeping requirements from the Occupational Safety and Health Administration (OSHA). That means you need to keep records of any serious workplace injuries or illnesses. You also need to annually post that log for all current and former employees.
Under OSHA requirements, you need to keep employees safe by posting warnings about potential hazards and providing safety training, too.
The OSHA website has a list of employer responsibilities that can help you manage your to-dos here.
HR/People teams
As your team grows, so does the work of managing it. Whether you call it human resources (HR) or your people team, you want to start developing infrastructure here.
For small businesses, that probably doesn’t mean building out a full-fledged HR/people department. Instead, you can probably get the support you and your team need through options like a professional employer organization (PEO) or fractional HR services.
The partners we highlighted earlier all offer PEO services:
That means they can handle onboarding, performance reviews, and even the administration of your benefits package for you.
Stock option plans
At this stage, you want to create or expand your stock option plan if you haven’t done so already. Different types of stock have different exercise options, so it’s important to be thoughtful about your approach here. Decide if you want to offer incentive stock options (ISOs) or nonstatutory options (NSOs). Your CPA can help here.
They can also help you manage your company’s equity with tools like a capitalization table (cap table). Carefully tracking what you’re doling out is key so that you don’t dilute equity for yourself, your co-founders, and your investors. While shares can be a great way to bolster your compensation packages, you need a thorough stock distribution plan to protect your company long-term. Again, an experienced CPA — particularly one that regularly works with startups — can help to guide you.
Support as you scale
As your company grows, some things get easier and some get harder. One thing never changes once you bring on your first employee, though: the human capital in your business means you need to take certain steps. From payroll filings to legal compliance measures, there’s a lot your business needs to do to stay square here.
Ideally, this guide helped you dip your toe into all of it. You still might feel like there are a lot of moving parts here, though — because there are. Bringing the right people and solutions alongside you makes a big difference.
Here at ShayCPA, our team specifically focuses on working with tech startups. That means we have extensive experience with all of the different requirements that come with scaling up your headcount. We can step in to offer guidance and make recommendations to help you stay compliant while setting your company up for success.
As part of that guidance, we again want to highlight our payroll and PEO partners. We’ve chosen to work with these companies because we’ve seen the serious value-add they bring to founders. If you’re looking for help to pay and manage your team — whether that’s your first employee or a whole new wave of hires — we recommend exploring:
If you have any questions, we’re absolutely available to answer them. Because we work with founders from pre-seed to Series A to exit, we should be able to help you get the information you need. Contact our team to book some time with one of our experienced CPAs today.
Disclaimer:
The content provided on this blog is for general informational purposes only and does not constitute professional accounting, tax, or legal advice. Reading or accessing this material does not create a CPA-client relationship, nor should it be construed as a substitute for individualized guidance from a qualified professional. While we strive for accuracy, Shay CPA PC makes no warranties—express or implied—about the completeness, reliability, or timeliness of the information, and we expressly disclaim liability for any errors or omissions. You should not act or refrain from acting based on any blog content without seeking the advice of a qualified CPA or other professional who can address your specific circumstances. Links to external resources are provided for convenience only and do not imply endorsement. Shay CPA PC is under no obligation to update this content and disclaims responsibility for decisions made in reliance on it.