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Are Entrepreneurs Loving Or Hating The ‘Great Resignation’?

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Workers may be delighted (or they may be unexpectedly disappointed) at the prospect of being a part of the Great Resignation, but what about those who own their own businesses? What do the motives behind all those people quitting their jobs mean to entrepreneurs?

“There are a number of reasons behind the Great Resignation, most of which have been triggered (or magnified) by the pandemic,” says Seth Hanft, Employee Benefits Practice Counsel at BakerHostetler in Columbus, Ohio. “For example, the shift to work-from-home has eliminated many of the personal/professional barriers that previously existed. This means many employees are never really off the clock. That can take its toll, so many are leaving their current positions to find a job that better fits their work-life balance needs. For others, the pandemic has created financial opportunity. With workforce shortages, many positions are in high demand, which means a lateral move can reap significant immediate financial benefits. Finally, others are simply recalibrating, meaning they are leaving in search of a position that provides more personal/professional satisfaction. All of these reasons, and more, have contributed to the Great Resignation.”

Perhaps in a way not seen since 9-11, the pandemic has forced people to contemplate the meaning of their lives. And while September 11th was a day that expanded to a week, Covid-19 was 15 days (“to slow the spread”) that stretched to, well, we’re coming up on two years now.

That’s a long time for you to think hard about what your life is all about. And when it’s all said and done, you quickly realize it ain’t all about work.

“One of the biggest reasons behind the Great Resignation is a quest for greater work-life balance,” says Tolen Teigen, Chief Investment Officer for FinDec in Stockton, California. “People had pondered making a change in the past. But, with the Pandemic, they’ve had the reason to go for it. It provided people the permission to make a leap as they were already working remotely or, perhaps, they had to take a temporary pay cut. The Great Resignation phenomenon is largely a preference based on quality-of-life decisions.”

Unlike the typical employee, most entrepreneurs went through this thought process long ago. They didn’t need a pandemic to spur them to re-evaluate where they wanted to be in life and when they’d decide to quit their regular job.

“They’ve already made the decision to do so,” says Teigen. “They’ve already had their own private resignation when they branched out on their own.”

That’s not to say the Great Resignation won’t be useful to business owners. Because they’ve already gone through this process, they can empathize with those going through it today, even if it doesn’t necessarily impact their entrepreneurial status right now.

“I don’t see that the same resignation phenomenon will apply to entrepreneurs because these individuals are in business for themselves,” says Susan Lubow, Employee Benefits and Retirement Plans Co-Leader at BakerHostetler in Columbus, Ohio. “They set their job expectations prior to the Pandemic and perhaps were not as impacted by the Pandemic. In short, many of the reasons that may apply to other workers (changing work-life balance or moving toward increased financial opportunity) may not have the same impact on entrepreneurs and those in business for themselves.”

If you think about this, the sense that entrepreneurs are especially equipped to deal with the Pandemic, or any other crisis for that matter, follows the “rugged individualist” meme long associated with those who start their own businesses.

“When you work for yourself, you often have the flexibility you need to balance work and play-making,” says Jeffrey Zhou, Co-Founder & CEO of Fig Loans in New York City. “This means that you’re probably less likely to resign or retire altogether. Freelancers and entrepreneurs often have the ability to scale their work with their lifestyle demands, which makes it easier to feel like you’re working less, while achieving more.”

As a result, rather than shifting gears, entrepreneurs, more often than not, have found the chaos of the Pandemic has afforded them with the opportunity to put the pedal to the metal.

“Almost all of our business owner clients have seen an increase in business over the last two years,” says Chris Gure, an Investment Consultant in Charlotte, North Carolina. “With more and more people working from home or retiring, they seem to have more time to spend money.”

But it’s not all sunshine and happiness. Entrepreneurs, like other business owners, may find themselves having to deal with the impact of the Great Resignation on their employees. This manifests itself in any number of areas.

“It depends on the industry and the ability to share the jobs a labor shortage causes with the remaining work force,” says Guy Baker, founder of Wealth Teams Alliance in Irvine, California. “It may mean increasing the income of the remaining employees to make certain that jobs are completed.”

What’s the biggest impact?

“In a word, disruptions,” says Hanft. “You see it everywhere you go. Restaurants are short-staffed so service suffers and/or the employer is forced to reduce operations/hours, creating financial hardships. Short-staffed logistics companies are running behind on critical deliveries. And the list goes on. To counteract this, employers are being forced to offer unprecedented compensation and benefits packages to attract and retain talent, which is creating hiring wars.”

It’s the specifics of those benefits packages which can catapult a small business into the big leagues. But that’s the price you pay if you want to attract and/or keep top talent.

“When business owners are reacting to an exodus of employees, they’re often looking at what benefits they can implement to become more attractive to employees overall,” says Zhou. “This might mean adding a higher match to their 401(k) plan, or better health insurance. However, when you’re already losing money in retirement benefits, it may tighten the benefits budget overall, limiting how employers can reward their employees.”

Then there’s the problem associated with the expense of losing employees.

“It impacts it by potentially having higher administrative costs,” says Teigen. “You need to be tracking down people who have moved on and continue to send them paperwork until they decide to roll over their funds. Your administrative support team needs to keep on top of termination, rehires, keeping track of start/stop dates, etc.”

You might not personally be feeling the psychological effects of the Great Resignation, but that doesn’t leave your company unaffected.

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Seoul court rejects warrants for former Terraform Labs employees and investors over Luna collapse  • TechCrunch

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A Seoul court rejected a request from prosecutors for warrants to detain eight people related to Terraform Labs, including the co-founder of Terraform Labs, Daniel Shin, early investors and former engineers.

It’s difficult to believe they would flee or destroy evidence as Shin and the seven other suspects have been cooperating with the investigation, Yonhap News said, citing the Seoul court. In addition, the suspects also need to be guaranteed their rights to defend themselves against the allegations of capital market rules, which is the core accusation of this case, according to the court, per Yonhap

The Seoul Southern District Prosecutors Office told TechCrunch that it is hard to understand that conclusion as the court knows the seriousness of the allegation and the fact that some of the suspects allegedly made money by selling Luna tokens before the collapse. And yet, the court dismissed the warrants, saying the eight people need to have rights to defend their cases against accusations.

Shin is being charged with taking illegal profits worth about $105 million by selling Luna tokens when it was near its all-time high without disclosing this move to investors. It happened before the collapse of the TerraUSD and Luna earlier this year, contravening the Capital Market Act. Prosecutors also suspect Shin used customer data from his separate fintech startup called Chai to promote Luna, violating the Electric Financial Transaction Act. The other seven people involved in Terraform were also alleged to have similar charges.

Shin has denied the claims of trading Luna at a market high and violating the customers’ data. Terraform was founded in Singapore in 2018 by Do Kwon and Shin. Shin left Terraform in March 2020 to found Chai and stepped down as CEO of Chai earlier this year.

South Korean prosecutors began the investigation after the crash of the UST-Luna token earlier this year, which wiped out $40 billion in market value. In September, South Korea issued an arrest warrant for another co-founder, Kwon, whose whereabouts are currently unknown, and requested Interpol, the international law enforcement agency, to issue a red notice for Kwon.

Terraform Labs could not be reached for comment.

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Amazon may lay off 20,000 employees, including managers: Report

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Amazonmay lay off about 20,000 employees across divisions as the company reevaluates its pandemic-induced hiring spree, according to a media report.

A Computerworld report stated that the tech giant could lay off employees across the company, including distribution centre workers, technology staff, and corporate executives. Staff at all levels will likely be affected, it found.

Last month, the New York Times reported that Amazon plans to lay off approximately 10,000 people, and “the cuts will focus on Amazon’s devices organisation, including the voice-assistant Alexa, as well as at its retail division and in human resources”.

However, according to Computerworld, the layoffs could impact nearly double the number of employees– roughly 6% of the company’s corporate employees and about 1.3% of its global workforce of more than 1.5 million composed primarily of hourly workers.

YourStory could not independently verify the report.

Corporate staff have been told that employees will receive a 24-hour notice and severance pay, in accordance with their company contracts, the Computerworld report noted. “There is a sense of fear among employees in the company as the news has come out,” the report added, quoting a source who was informed directly about the layoff effort.

The layoffs would be the largest staff reduction in Amazon’s history.

“There is no specific department or location mentioned for the cuts; it is across the business. We were told this is as a result of over-hiring during the pandemic and the need for cost-cutting as the company’s financials have been on a declining trend,” the source told Computerworld.

After the New York Times report, Amazon Chief Executive Officer Andy Jassy shared some information about role eliminations in a note. Jassy confirmed that layoffs were occurring, though he did not specify the planned number of employees to be laid off.

“Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments. Those decisions will be shared with impacted employees and organisations early in 2023,” Jassy wrote in the message, noting that Amazon had already communicated that layoffs would occur in the Devices and Books businesses, and would be extending a voluntary reduction offer for some employees in the People, Experience, and Technology (PXT) organisation. 

“We haven’t concluded yet exactly how many other roles will be impacted (we know that there will be reductions in our Stores and PXT organisations), but each leader will communicate to their respective teams when we have the details nailed down,” Jassy noted.

Meanwhile, the Computerworld report noted that employees on Amazon’s robotics team have been laid off.

Amazon’s muted third-quarter earnings as well as disappointing fourth-quarter projections led the company’s stock to plummet. Its third-quarter earnings were severely impacted by unpredictable consumer shopping habits and inflation. 

Amazon is likely to lay off several employees in India across divisions, according to media reports. Last month, Amazon confirmed that it will shut down its wholesale unit Amazon Distribution. This is the third business unit to be closed after the e-commerce giant announced the wrapping up of Amazon Academy and the food delivery business in India.

Globally, tech companies have announced layoffs as part of their cost-cutting efforts. In November, Meta CEO Mark Zuckerberg announced that the company had decided to reduce the size of its team by about 13%, cutting over 11,000 jobs. In the same month, Elon Musk reduced half of Twitter’s workforce or about 3,700 jobs at the social media firm.

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Unlock The Entrepreneurial Potential Of Your Team With Employee-Ownership

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A strong team of many outperforms even the most hardworking of entrepreneurs on their own. But when hiring employees, freelancers and contractors, how do you ensure they have the same entrepreneurial skills and drive that you do as your company’s owner? Is it unrealistic to expect employees to be motivated and committed to an organisation they didn’t found?

Nicki Sprinz thinks she has cracked the code of unlocking the entrepreneurial potential of your team, and the answer lies in employee ownership. Sprinz is managing director of B-Corp certified ustwo London, a company of over 200 employees, and cofounder of Ada’s List, an 8000-strong community designed to support women working in the tech industry. ustwo has recently become employee-owned and has already seen the benefits of breaking down the distinction between owners and employees.

According to the Employee Ownership Association, this way of working can improve productivity, support more resilient regional economies and empower team members, resulting in them being far more engaged. Sprinz explained the main benefit for entrepreneurs of this model along with practical tips for managing directors and company founders to make the transition to becoming employee-owned.

Employee ownership protects the company

“Being employee-owned means existing team members, who are now partners, feel empowered as owners,” said Sprinz. She believes that this encourages everyone to put in the work to uphold a strong company culture and course-correct if they see anything awry.

Whilst this might not happen automatically, a founder can make it more likely that their team upholds the vision. Sprinz has put frameworks in place to ensure everyone has a voice. “We hold open firesides, have elected partner representatives on the board, and ensure there are regular channels of communication for all team members to be part of growing the culture and living the values,” she said.

Keeping the team on board means protecting the company. “There are no surprises about the direction we are taking with the business,” explained Sprinz. “We involve everyone in the decisions we make on our projects and ensure we are accountable, both commercially and ethically.”

Attract and retain top talent

In a competitive market, how does your company attract and retain the best talent in the world for the benefit of your clients? Employee-ownership could be the solution. Not only does it make job listings stand out, but it attracts individuals who are like-minded and think long term. They are committed to a future with whichever company they choose to join and are prepared to push themselves to make it happen.

“High quality potential recruits and employees are interested in values and purpose,” said Sprinz. “Being able to talk about employee ownership helps you stand out in a tough hiring market. We have several interview stages so a candidate can get to know us as well as we’d like to know them.”

Sprinz’ interview stages aim to weed out “cultural and value mismatches that ultimately lead to an unfulfilled team.” They ask candidates multiple questions about their values and examples of them in practice, and they encourage candidates to probe with questions about ustwo. They also “publicise the salary for all open roles and candidates have the opportunity to meet other members of the team,” she added.

Control quality

When scaling a business, ambitious entrepreneurs cannot afford to let quality slip. Growth at all costs is a false economy that ends with the business back at square one and having to work harder to undo reputational damage. “A more entrepreneurial team ensures quality stays high,” explained Sprinz. Not only do your team members care deeply about the work they do, they also know they benefit from company growth, so they are incentivised to keep raising the bar.

“If your team is invested in the long term financial success of the company, they also feel pride that their work contributes to overall success,” said Sprinz. “They respond by raising the bar on their work.” Sprinz also believes that, “Regular transparent sharing of financial results and metrics maintains dialogue on personal and company impact.”

Direct the future

An employee-owned company has options for the future. The owner might one day want to step aside or sell, and the company’s succession plan will already be in place. In the meantime, the company has hit new heights and progressed with new ideas because its foundations are solid.

Like Maslow’s Hierarchy of Needs, you cannot reach self-actualisation without warmth and shelter, and a company cannot break through ceilings with constant recruitment issues. When team members are bought into the company, they are bought into its future too, making more certain outcomes for everyone involved.

“The partner representatives on the board surface the priorities of the rest of the team and ensure the conversations of the board are directed accordingly,” explained Sprinz. “The representatives are actively part of the bigger picture and playing a huge part in shaping the company’s future.”

Unlock the entrepreneurial potential of your team by exploring employee ownership, advised Sprinz. The best people will be proud to tell their friends that they are part-owners of the place they work. They will feel valued and listened to and respond with their effort and devotion. Could employee ownership be the right step forward for you?

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