March 17, 2023

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Editor’s note

Hi readers, it’s your editor Mohini here. This month, I hit five years with Gusto (🎉). It’s also been three years since we launched this newsletter; to those of you who have been reading since our early days during the Covid-19 pandemic, thank you for sticking by us! We hope we can continue to provide valuable content and updates to you for years to come. 

One of the ways we celebrate the 5-year mark at Gusto is with a one-month sabbatical to reset and recharge our batteries. I’ll be setting off on an adventure in Asia next week, which means this will be the last newsletter you receive until April 28. Here’s wishing you a restful and energizing start to spring, and we’ll see you back here then!

What happened with Silicon Valley Bank? 

The news of Silicon Valley Bank’s (SVB) collapse on March 10, 2023 has sent the business world into a tailspin. Here’s the brief backstory: SVB bought a lot of relatively safe assets over the past few years, like government-backed mortgage bonds. However, once interest rates started rising rapidly over the last year and a half, those assets dropped significantly in value, and SVB found themselves looking at over $17 billion worth of losses at the end of 2022. 

Last week, faced with $42 billion in withdrawal requests from their customers and unable to raise the money to cover those requests, SVB was forced to close. Regulators have since taken over the bank and have teamed up with the Federal Deposit Insurance Corporation (FDIC), the Treasury Department, the Federal Reserve, and President Biden to get people their money this week.

Gusto does not use SVB to fund our payroll services and operations. If you didn’t bank with SVB to fund your business’s payroll, rest assured: Nothing will change with your Gusto payments. 

However, we know this is an especially tough time for our Gusto customers who used SVB to fund payroll. If that’s you, please follow the wire instructions in your Gusto account to complete your payroll, and make sure you take a look at our Gusto SVB closure resource hub, which can help answer your questions. 

Economic insights to know for Q2

In our February 2023 installment of The Economy Explained with Gusto, we share the latest economic insights and advice for accountants. However, there’s also a lot of important information for employers and business owners about the state of the economy over the next few months. 

Here’s a quick peek at the positive improvements and continued challenges you’re likely to see as a business owner: 

  • Supply chain: Fewer disruptions are easing lead times and shortages, but we need more improvements to actually affect prices and timelines. 
  • Workers: Slowing hiring and stable pay growth has eased labor costs for businesses. However, the labor market is still competitive and recruitment might continue to be tough. 
  • Demand: Improvements in the inflation rate are boosting consumer confidence and spending, decreasing the likelihood of a “hard” recession. However, federal interest rates are making it harder for small businesses to borrow money at an affordable rate. 

To read more and watch the video with Liz Wilke, our Principal Gusto Economist, check out the full breakdown

How to build a stronger culture of DEI 

As a business owner, creating a culture that prioritizes diversity, equity, and inclusion (DEI) is a worthwhile goal—but it can be hard to know where to start. In a recent Gusto article, Maggie Smith, the Senior Vice President of Human Resources at Traliant, explains the key to incorporating DEI into your culture and workplace: promoting participation from the top down. 

Maggie says you need senior leaders—like business owners, managers, and board members—to not only be involved in DEI decisions and cultural changes, but to visibly stand behind those decisions and participate in DEI activities. Read the full piece to learn more about why structural and cultural change starts at the top and which six topics DEI training should cover. 

Read with Gusto

Hey Talk Shop subscribers, Caleb here. Maybe you heard, but banks are in the news, so I’m sharing a few of the more interesting takes I found on Silicon Valley Bank (SVB) and banking in general. Don’t worry, if you’ve read all you can handle on SVB, there’s some non-banking reading, too.

Fresh from Gusto (and friends)

Watchlist

MAR 22 and 29: NAWBO Empower Hour

Community support and peer advice is hugely helpful as a business owner. That’s why the National Association of Women Business Owners (NAWBO) is hosting a series of open forums for women entrepreneurs and business owners to come together and share ideas, tips, and stories. This is an inclusive place to share your ups and downs, offer best practices, and gather wisdom from your peers. It’s open to members and non-members. Register here.

MAR 29: What to Know About the SECURE 2.0 Act

SECURE 2.0, otherwise known as Small Incentives to Contribute to a Retirement Plan, creates more tax savings for employers and employees. In this webinar, Guideline is breaking down how you can leverage these tax savings opportunities for your business. You’ll learn more about the Act, including details on employer contribution credits and why it’s easier and more affordable to open a 401(k) with increased startup credits. Register here.

Want more news and resources? Check out past editions in our archive.

Mohini Kundu Mohini Kundu is a news editor on the Gusto content team. She studied journalism at Northwestern University and started her career at The Huffington Post before embracing the #startuplife.
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