Hartford Business Journal

30 HARTFORDBUSINESS.COM | JANUARY 9, 2023 INDUSTRY OUTLOOK | ACCOUNTING INDUSTRY OUTLOOK | HUMAN RESOURCES Tips for retaining workers in a still-tight labor market By Meg Galistinos T he U.S. labor market is at an inflection point. With most states, including Connecticut, returning to pre-pan- demic levels of unemployment, recent layoffs in the technology sector point to an uncertain future as supply chains continue to be disrupted and global political turmoil persists. Yet, the labor market has defied recessionary fears, as an underlying demographic shortage of workers will continue to have companies struggling to find the talent they need to fuel their growth. At the end of October, Connecticut employers reported nearly 100,000 job open- ings, according to the Bureau of Economic Analysis. Now more than ever, it is critical to understand what employees are thinking. Mercer's 2022 "Inside Employees Minds" study outlines employees' most pressing needs and how organizations can meet them. This study includes feedback from more than 4,000 full-time employees across the U.S. The data shows that employees are more focused on securing their financial, physical and emotional health and well-being than on achievement and climbing the ladder — with work-life balance a top concern. Despite headlines, crypto will gain traction in the mainstream business community in 2023 By Justin Wilcox T here's a saying in the cryptocur- rency community: Build in the bear, get rewarded in the bull. After market capitalization and the prices of major coins reached all-time highs in 2021, cryptocurrency had a bad year in 2022. Prices fell and fraud scandals dominated the headlines. Whether or not the market rebounds in 2023, there are opportunities for businesses and entrepreneurs to grow and succeed in the crypto space this year. While less thrilling, a bear market provides a more level-headed environment in which to make strategic moves. Cryptocurrency crises have precedent In the first 11 months of 2022, Bitcoin lost about two-thirds of its value. Many stocks in the tech sector, such as Meta, fell at about the same rate. Crypto doesn't have the market cornered on volatility — or scandal. The collapse of FTX will likely be found to be a massive fraud that goes down in history. The fact that John Ray III, the executive who wound down Enron after its meltdown, was brought in to direct FTX's dissolution underscores the fact that events like this have hap- pened before. It's easy to mistake disasters like FTX and Terra Luna for some kind of referendum on the viability of crypto- currency itself. But these are individ- ual companies. Decentralized finance as a technology is much broader, and its adoption by the mainstream business community will continue. In the long run, the FTX fiasco will have a positive effect on the trajec- tory of cryptocurrency business appli- cations. Purists have long warned that crypto exchanges like FTX add a layer of unnecessary risk. This is now plain to see, so companies can take a more secure path. The FTX collapse will likely push more organizations and investors to use self-custody solutions. While these aren't without risk — keys or hardware where crypto is stored can be lost — the coins and the respon- sibility to protect them remain with their owner. Business-use cases strong, getting stronger As the Web3 landscape continues to evolve, an increasing number of traditional businesses are engaging with companies focused on crypto- currency, NFTs and other blockchain applications. Web3 organizations have the same needs for professional services as any other type of company, and many of them accept and issue payment in cryptocurrency, often at a more favor- able rate than the U.S. dollar. There are a number of reasons for this. They likely have other vendors and suppliers who transact in Bitcoin. They may also convert to another currency or invest the balance. And while some companies and investors have remained on the sidelines of crypto because of envi- ronmental concerns about its energy consumption, a rare positive crypto story in 2022 shifted the equation. The world's second-biggest cryp- tocurrency, Ethereum, switched from a mining model to a proof-of-stake model, reducing its energy consump- tion by over 99%. Great timing for bootstrapping Many successful crypto projects and businesses were launched during previous downturns, and found themselves poised for success when the market heated up again. These days investment dollars are, of course, fairly hard to come by in every industry. But if you can bootstrap your idea, 2023 is a great year to get started. While still a specialized field, block- chain developers likely have more availability now than they did in the previous two years. It's also easier to be more diligent about building and perfecting technology when there's not a huge rush to launch. Once they are up and running, crypto and NFT projects often require a great deal of marketing to be successful. While a full-fledged marketing push would likely be timed better later on, getting an early start on laying groundwork, such as building a social media fol- lowing, can be advantageous. And, of course, you don't have to make a new coin or NFT to partici- pate in the Web3 economy. Creating a product or service that caters to crypto organizations or investors can generate revenue regardless of where the price of Bitcoin heads this year. Justin Wilcox, CPA, is a partner at Glastonbury-based Fiondella, Milone & LaSaracina LLP (FML CPAs), where he leads the firm's cryptocur- rency accounting practice. rewards businesses that maintain sufficient liquidity to weather a pos- sible "liquidity crunch" brought on by the Federal Reserve's continued tightening of credit conditions. For investors • Ignore the headlines and dig deeper. Most headlines focus on a recession but the full economic picture is much more complex. Across industry, the economy, and the markets, it's a much more even picture. Dig into financial data to get a more complete eco- nomic outlook and a more com- prehensive background for your investment decisions. • Along those lines, take a holistic approach to your investments. Consider all facets of the economy ― business, industry, policy and markets. A multifaceted outlook can make a significant difference for your investment plan. • Within markets, the three big buck- ets are fixed income markets, equity markets, and alternative markets. Within each of these asset classes, the market sell-off seems to be exacerbated by fear rather than fun- damentals, creating opportunities for investors. To us, it seems like the market is overreacting. • Focus on high-quality investments. High-quality companies should be able to withstand most slowdowns. This strategy is a solid way to navi- gate market volatility. • Investors seeking current income should consider short maturities (one to three years). Total return investors should consider inter- mediate maturities (five to seven years). High-quality credit (A-rated or higher) should be favored until credit spreads widen further. The bottom line is, even with some market concerns, if you build robust portfolios with selectivity biases, you can still stay invested. Andrew Lattimer is managing principal of office for accounting and consulting firm CLA West Hartford. Justin Wilcox

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