4.3 million American workers quit in August. Yep, the Great Resignation is real.
Last week, the U.S. Bureau of Labor Statistics announced that 4.3 million Americans quit their jobs in August.1 Take a moment to let that sink in. That equates to 2.9% of the entire U.S non-farm workforce. In particular, tech workers are quitting their jobs at rapid speed, leaving companies scurrying for solutions to minimize the blow from ‘The Great Resignation.’2
During these historic times, companies are having to come up with unprecedented solutions to keep and find essential talent — and it could signal toward a longer-term shakeup in compensation models as we’ve known them, across both public and private markets.
Public tech companies such as Uber, Google, Stripe, Coinbase, and Lyft are reassessing their compensation models already. Some are shortening up traditional vesting periods, which are typically around four to six years, and allowing employees to unlock equity grants much sooner. Google, for example, introduced a model for new hires that pays out two-thirds of the initial equity grant in the first two years.3 But whether that shorter-term schedule is better for employees’ long-term financial gain is up for debate.
Meanwhile, a growing number of private companies are exploring liquidity-as-a-benefit – i.e. the ability to cash out on some of their equity prior to their company going public. This is a way to reward employees for their hard work and support their more immediate financial goals with minimal effect to the bottom line.
Having the right infrastructure in place to execute on these new models is more important than ever. For private companies specifically, Forge has the tech to help with exactly this.
How Forge can help
Company-sponsored liquidity can help motivate and retain existing employees and is an attractive benefit for prospective employees who won’t have to wait for an exit event to experience the reward of their hard work. The good news is that, with advances in technology, liquidity programs are mutually attractive for companies and founders.
Through Forge Company Solutions, private unicorn companies can manage customized liquidity programs that ultimately incentivize and support employees and investors, raise capital and provide insight into market-based pricing. And what’s more, liquidity programs offer an attractive incentive to company employees -- who could perhaps be lured by greener pastures of pre-IPO companies promising shorter timelines to exits and liquidity.
In addition to the more seamless administrative function, Forge can bring its marketplace to bear for the benefit of equity holders, who can access a diverse investor pool and auction-based pricing that has the potential to put more money in employees’ pockets than perhaps a traditional tender offer might.
And in the age of the Great Resignation, the companies that can deliver the most employee-friendly liquidity programs, will have a powerful tool to reward and retain employees.
Visit Forge Company Solutions to learn more about customized liquidity programs.
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The information and material presented in this article is provided for your informational purposes only and does not constitute an offer by Forge Global, Inc. Forge Securities LLC or any of its affiliates (collectively, "Forge") to sell, or a solicitation of an offer to buy any securities and may not be used or relied upon in connection with any offer or sale of securities. An offer or solicitation can be made only through the delivery of final offering document(s) and purchase agreement and will be subject to the terms and conditions and risks delivered in such documents.
This article does not constitute an offer to provide investment advice or service. Registered representatives of Forge Securities LLC do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services. Securities referenced in this article may be offered by Forge Securities LLC, member FINRA/SIPC.
Forge Securities LLC is a wholly owned subsidiary of Forge Global, Inc. Certain affiliates may act as principals in such transactions.
Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice. Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.