As a growing number of startups compete for talent with giants like Google and Facebook, they seem to have entered an arms race of showering employees with lavish perks — whether free lunches, free housecleaning services or sending employees on free international vacations.
Now the CEO of Boxed, an online seller of bulk household goods, has told employees he'll do something much bigger: pay for their kids' college tuition.
About a month ago, co-founder and CEO Chieh Huang said he would set aside a double-digit percentage of his personal stake in the company to pay for it. "I actually don't think of it as a perk," he said in an interview, noting that the benefit will be funded by his own money rather than company funds, as well as investors whom he's asked to contribute. "I tell them I love that you're investing in me and us, but you have to value the employees as much as me."
Perk or not, what Huang is doing is certainly generous. The program covers four years of tuition (not room and board, say, or books). He says it is designed to help employees who chose to work at Boxed before the company goes public. Huang, whose decision was first reported by Forbes, also says he plans no eligibility requirements in terms of length of tenure, or cap on tuition.
Huang has started a nonprofit foundation, funded with a chunk of his personal shares in the company currently valued at between $1 million and $2 million, along with some cash to meet short-term obligations, to administer the program. As of now, the company only has 12 children among the families of its roughly 100 employees.
While some details aren't clear — such as whether there will be tax implications for employees who receive a grant — Huang says his goal is to give back to early employees as long as his stake doesn't significantly decrease in value. "If you're along with us for a ride, you deserve us investing back in you and your family's upward mobility," he said.
In addition to being generous, it's also unusual. Many companies help with tuition assistance for employees (companies like Starbucks and Fiat Chrysler have recently grabbed headlines for their college tuition programs). But funding employees' kids is far less common. Only 17 percent of corporations offer scholarships for employees' family members, according to Bruce Elliott, the manager of compensation and benefits for the Society of Human Resources Management. And the scholarships that are given tend to be smaller in value and require an application.
A program like Huang's, say Elliott and others, is almost unheard of. "Outside of higher ed, I've never seen that," says Carol Sladek, who heads up work-life consulting at Aon Hewitt. It's certainly the kind of thing that could help companies stand out, however. Sladek says a health-care and retirement plan are mere table stakes these days, and "the way to differentiate yourself are through these work-life benefits. The crazier you can come up with, the more attention you're going to get."
Huang says his chief motivation was wanting to help employees become upwardly mobile, as someone who was raised by working class parents himself. He adds he hasn't taken a salary in the last two years and doesn't anticipate any tax advantage for setting up the foundation. Huang came up with the idea after noticing that many employees weren't able to attend an evening company event because they had limited transportation options.
"We'd just opened the Atlanta warehouse, and I realized a lot of folks didn't have cars," he says. "I could have started doing the Oprah thing, but that doesn't contribute to long-term mobility for their families. The common factor that does was education, and that was the one that resonated most." When asked why he doesn't just pay employees more, he said he felt education would have a bigger impact. "Even if we gave everyone a 50 percent raise, it's not a game changer for the future trajectory of their families."
In fact, Huang is quick to note that he doesn't see the program as a perk at all, since he's personally the one offering it. (In fact, he seems almost dismissive of the perks arms race in startup land. "We're one of the few companies that don't offer free lunches," he said. "You won't find a lot of swag around here.")
Rather, he says he's making an investment in the families of the people who's helping him get the company off the ground, one he hopes will draw other CEOs' attention to the issue of inequality. "If they don't go through college, it's not someone else's problem," he said. "As the leader of this company, it should be my problem too."