Hiring does not have to stop just because you don’t have enough cash on hand.
For many companies – for startups and established businesses alike – this situation is too familiar: the work is piling up and opportunities are within reach – but you cannot afford to bring in new talent. So you wait and/or stretch your team thin. You put key initiatives in the back burner.
But here is the truth: you can hire even when the cash is tight. You just have to rethink what “compensation” means.
By using flexible, creative compensation models like equity, deferred pay, milestone-based rewards, and performance-linked bonuses, smart companies can continue to grow while attracting high caliber professionals ready to contribute.
The Hiring-Cashflow Paradox
Here is the scenario: You have urgent projects that could unlock real growth – like a new product launch, better internal systems, a rebrand, or a sales campaign.
But you also have:
- Limited cash reserves
- Investors telling you to stay lean
- A team already stretched too thin
What happens next? You delay. You do the bare minimum. You lose momentum.
This is the paradox: you can’t afford to hire, but you also can’t afford not to.
The solution isn’t freezing growth – it is reframing “compensation”.
Flexible compensation models that make hiring possible
Following are the most used flexible combination types:
- Equity
Offer ownership in your company instead of upfront cash.
How it works: Give candidates equity instead of / in addition to cash. This could be via stock options or RSUs.
Who it works for: Senior professionals and startup veterans who believe in your mission and want long-term upside.
This alternative beautifully aligns incentives – candidates win when the company wins.
Example scenario: You bring on a fractional CTO for 10 hours per week in exchange for 1% equity over two years with no cash needed.
- Deferred Pay
Pay later, not never.
How it works: Agree to pay candidates after a defined milestone (e.g., fundraising, revenue threshold, end of quarter).
Who it works for: Contractors, consultants, or professionals open to delayed payment, having some trust in your business.
Note: It is important to be clear on timelines and payment triggers to build confidence.
Example scenario: A content strategist builds your launch plan now and receives full payment 60 days after you close your next funding round.
- Milestone-Based Payments
Pay for progress rather than time.
How it works: Tie payments to completed deliverables, not time spent
Who it works for: Freelancers, agencies, or anyone working on a defined scope
Why it works: Reduces risk for both parties and keeps cash tied to results.
Example scenario: A developer builds your MVP (minimum viable product) for a fixed price – paid in three stages: wireframes, prototype, launch.
- Peformance-Based Bonuses
Reward outcomes, not effort.
How it works: Compensate based on results – new users, closed deals, completed campaigns
Who it works for: Growth hires, sales professionals.
Note: You need to be very specific on outcomes and rewards. Vague metrics will mean broken trust.
Example scenario: You hire a growth consultant who earns a $5,000 bonus for hitting additional 1,000 new users in 90 days with a fixed budget.
In Summary: When to use each model
| Model | Best for |
| Equity | Long-term roles, leadership, believers in your vision |
| Deferred Pay | Short-term contractors, post-funding roles |
| Milestone payments | Defined-scope projects, contractors, freelancers |
| Performance bonuses | Sales, growth, high-accountability roles |
Try Combinations of Compensation Models
You don’t have to choose just one type of compensation – many companies use combinations of cash, equity, milestone pay, and bonus. Negotiate with the candidate to find the optimum combination for your specific role.
Real-World Hiring Examples
- Startup Developer: You offer a React developer deferred payment plus a small equity stake to build the MVP – no cash required for now.
- Marketing Advisor: A fractional CMO works for a low monthly retainer + performance bonus based on pipeline creation.
- Creative freelancer: A designer agrees to fixed milestone-based payments spread over three months, aligned with a major product launch.
These professionals are not “settling” – rather, they are partnering with you. They are betting on your vision in exchange for a meaningful compensation in the long term.
Why flexible compensation isn’t just a shortcut
It is not about underpaying people. It is about creative alignment.
Done right, flexible compensation can:
- Attract people who care about outcomes, not just hours
- Give you access to senior-level talent without full-time risk
- Build trust, ownership, and long-term relationships
This is how resourceful companies grow with traditional hiring isn’t an option.
Conclusion
When cash is tight, it is tempting to freeze hiring and wait for the “right moment.” But growth does not wait and neither should you.
The smartest companies know they don’t have to choose between staying lean and moving fast. They use flexible compensation to unlock talent, accelerate progress, and build real momentum – even before the cash hits the bank.
Rethink what you can offer. Reframe how you hire. Keep building.
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