How Unicorns are Tackling the Great Resignation with Liquidity

More workers than ever before are quitting their jobs in search of what they feel will be better, more rewarding positions. While this is something that is affecting companies of all sizes it is proving to be particularly concerning for startups.

This exodus has been termed “The Great Resignation” and is leaving startup founders with some major challenges on how they can retain key staff members. One avenue that is proving to be effective is for founders to seek assistance from unicorn investors in the form of liquidity-as-a-benefit.

Before getting into how liquidity can benefit startup founders, key employees, and investors in this respect, let’s take a look at what is behind the great resignation.

What are the Reasons Behind the Great Resignation

There is no one reason why more employees than ever before are leaving their jobs in search of better opportunities. Indeed, factors are complex and varied.

However, some key pointers have emerged, and below we will look at 3 of the major reasons being attributed to the Great Resignation and touch on ways in which founders can counter them.

Declining job satisfaction

It is no secret that during the pandemic key employees across the board have been subjected to increased work pressure in order to keep businesses afloat. Because of reduced company income and lack of business opportunities many companies struggled to stay afloat let alone expand over this period. The result was that companies were forced to let staff go.

That meant the remaining employees (very often those in key positions) had to (out of necessity) shoulder additional responsibilities and put in extra working hours that led to a much longer working week. It is clear that this “new normal” resulted in significant professional frustration and for many a state of burnout.

Work-Life balance has changed for many

As mentioned above, the majority of employees are now seeking a balanced work-life schedule. This is the result and knock-on effect of the pressures felt by key employees during the pandemic.

While working hours and additional duties may have been excessive, many workers settled into remote working and embraced the ability to work at the times of day in which they found themselves to be most productive. This shift in business practice moved them away from the ‘normal’ office hours and traditional working environment.

The enforced work-from-home routine has given many employees a new perspective on their personal work-life balance. This is clearly shown by the fact that there are now those who do not want to work from an office full-time. Others feel that with the easing of recruitment restrictions and the fact that companies are actively looking to add to their workforce that opportunities now exist to get back to sensible working hours while still being productive.

This should encourage startup founders to reassess working policies and as long as their business model permits they should consider the implementation of a hybrid working solution. 

Liquidity-as-a-benefit

There is no doubt that the Great Resignation is having noticeable implications on private companies that are now growing at a fast rate but who want to retain private company status for longer.

The issue is that the key employees required to achieve such a status need to be retained. However, it is clear that the top talent in these companies are now looking to cash in sooner rather than later on the equity they have in the company.

To resolve this issue liquidity-as-a-benefit is being seen as a highly effective solution. It is being used to reward key employees for the effort they are putting into building a company. Putting in place a well-structured liquidity-as-a-benefit program supports the immediate financial needs and goals of the company’s top talent while having a minimal effect on a company’s bottom line.

As well as allowing founders and their executive team to meet the mentioned needs of key employees it still leaves them strongly positioned to maintain company control and to meet the growing milestones they have planned for.

A New Solution to a New Challenge

Liquidity-as-a-benefit is a way for private companies to offer their top talent an emerging perk. That is by allowing them to cash out some of their held equity before the company goes through an exit event.

This is seen as a win-win situation for all. For founders and key employees, it addresses the two major reasons associated with the Great Resignation; feeling undervalued and not being sufficiently compensated.

When it comes to benefits for unicorn companies this solution satisfies shareholders because it allows the company in question to remain in private hands should they want to.

Customized Liquidity Programs Need Putting in Place

Every company has individual needs and this means founders, their executive decision makers, and unicorn companies need to be flexible in the way they approach liquidity-as-a-benefit programs. The real focus here is to come up with a customized liquidity program that suits all parties and one that can be managed transparently.

Putting such a program in place is the basis for incentivizing and rewarding key employees and early investors. However, the benefits do not stop there because the knock-on effect of such a program can be highly effective in giving leverage for a company to raise further capital.

It does need to be reemphasized that companies participating in such liquidity events remain in control of the offering. It allows them to make important decisions such as:

• How much equity employees can sell.
• When employees can sell such equity.
• Who is allowed to invest?

The establishment and the running of any liquidity-as-a-benefit programs need to be supported by a secure, state-of-the-art digital ecosystem. That is what the highly respected WOWS Global team already has in place.

We have all of the administrative tools in place to assist with your company’s liquidity programs and also have the ability to connect companies with like-minded investors.

WOWS is ready to advise on the different types of equity programs available. From there we are ready to assist you in understanding and negotiating the one which is right for your business. Our mission is to work with you in order to establish optimum benefits for equity holders through multiple investor pool pricing.

The comprehensive WOWS equity portfolio services will give your company leverage to achieve a better return (more money!) for top talent than traditional tender routes generally offer.

Conclusion - Make Liquidity Your Company’s Win-Win Proposition

Founders who take their company down the liquidity-as-a-benefit route are taking a positive step to negate the effects of the Great Resignation. Two major ways in which this will be seen are:

• To motivate and retain existing employees.
• The top talent you need to recruit for your company to grow will see this as a highly attractive benefit.

It is evident that key employees are looking to realize earlier rewards for the hard work, extra effort, and commitment shown while your company grows and prospers. Offering earlier rewards through a tailor-made liquidity program is a highly effective way for founders to acknowledge their appreciation with action rather than just words. 

The positive results will be seen through the retention and addition of key personnel to build a highly effective team. One that is with your company for the long-term.

As mentioned above, WOWS Global is perfectly placed to assist your company with liquidity programs that dovetail with founders, key employees, and investors' needs.

To find out more, please do not hesitate to get in touch with us for an initial no-obligation discussion at:

contact@wowsglobal.com