383866114 Impact of COVID

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1 Impact of COVID-19 Pandemic on the Mental Health and Productivity of Entrepreneurs in Startups in the US Student's Name Institutional Affiliation Course Code and Name Instructor Due Date

2 Impact of COVID-19 Pandemic on the Mental Health and Productivity of Entrepreneurs in Startups in the US Startups are uniquely positioned in the market due to their novelty which can have opportunities and challenges depending on the underlying context. A key defining feature of most startups is that they focus on a culture that can be differentiated from the general industry players. This move is based on the need for developing a niche and finding a competitive advantage in a specific market segment. Unlike the generic workplace culture, startups are driven by a sense of urgency arising from the objective of serving customers at high levels that are different from well-established firms (Haase & Eberl, 2019). This differentiation in culture is key to attracting and retaining new customers and the appropriate talent. Therefore, while it is important to focus on the generic corporate culture, many enterprises do not focus on a distinctive culture as exhibited in startups (Goncalves et al., 2020; Heinz, 2021). Hence, the attributes of startup cultures predispose such organizations and their employees to high levels of stress which if not addressed can negatively impact individual and group performance (Kerrigan, 2018). This paper examines the impact of the COVID-19 pandemic on the mental health and productivity of entrepreneurs from startup companies in the United States. Specifically depicting how suffering from mental illnesses can harm the company's productivity, employee engagement, and company’s future growth. In addition, recommendations for addressing and ameliorating these problems will be presented. High Pace and High Stress in Start-Ups Startups are founded on new business ideas which each employee should work towards achieving. Nonetheless, the stress level associated with novel enterprises is high because of the nuances of a respective market (Haase & Eberl, 2019). Indeed, start-up stress is critical to a

3 business’s success and the elements that define this form of stress have been exacerbated by the recent global pandemic (Yadav et al., 2021). One of the primary causes of stress and fear in startups is the uncertainty linked with the novel market conditions. Nevertheless, these uncertainties have grown exponentially over the pandemic period creating an increased intensity of stress levels among startups (Faghy et al., 2022; Mousa & Samara, 2022). As consumer behaviors shift post-pandemic, it is critical for startups to understand the value of stress management at the workplace and understand that goal achievement cannot be assured without a sense of precision in managing work-related stress in startups. Additionally, the geographical differences experienced during the pandemic have further segmented the market, meaning that the stress level at the industry standard is way more in the startup’s saturated niches (Pierce & Rider, 2022; Mousa & Samara, 2022). Therefore, on the one hand, survival may be the cause of stress for many companies, on the other hand, revival may be a fundamental driver of pressure and tension on startups. Selection Bias Best research practices require considering the different sources of biases that can impact the validity of the results. Notable, noticing the biases beforehand allows the research to minimize their impact or entirely avoid them (Nohr & Liew, 2018). The primary selection bias in the current study and those covered in the literature is that the participants may have been drawn to engage due to the topic. Future studies can address these issues by comparing findings from responders and non-responders. Mental Health Impact on Start-Ups: A Case Study of the United States Mental health is critical for individual and group success and well-being, especially post- pandemic. Thus, despite issues such as depression and anxiety not being priorities for most

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4 employers, these conditions can have a critical influence on the company’s bottom-line performance. Lack of addressing such crucial issues in the workplace can have a detrimental impact on an organization because the management will not be able to meet overall goals and objectives with an ailing workforce. A recent survey has confirmed that more than 40 percent of employees surveyed in a study revealed that they had underlying mental health and stress issues during the recent pandemic (Paychex, 2022; Levendusky, 2022). Lee (2020) initially reported that over 72% of entrepreneurs in startups self-report mental health issues which are caused by financial constraints and relationship issues with colleagues, the organization's leadership, and the community. Xu and Jia (2022) report that a start-up's performance during and post-Covid-19 will enhance the negative impact of the pandemic on entrepreneurs’ well-being. Therefore, it is crucial to understand the moderating role of startups in individuals’ mental health and wellness. A rationale for studying mental health issues amongst startups is the fact that current statistics show alarming rates. The significance of such research is that they underlie the connection between entrepreneurship and the dominant mental health facets in cognitive, affective, and behavioral facets. Freeman (2015) reports that entrepreneurs are more likely to report a lifetime of depression (30%), ADHD (29%), substance use conditions (12%), and bipolar (11%) than the general population. Bruder (2013) notes that despite these shocking statistics, the impact of stress on the mental health of entrepreneurs remains under-researched and unfocused thereby complicating any effort at achieving resilience. Additionally, the social conditions in a person’s life can also contribute to the overall buildup of stress and affect an individual’s capacity to perform at the workplace. Singh (2018) reports that entrepreneurs such as Aaron Schwartz and Elon Musk have openly communicated their struggles with mental health conditions such as depression and anxiety. Still, Freeman et al. (2018) note that entrepreneurship

5 may form a safety net against realizing the full impact of the negative outcomes of mental health issues. Henceforward, understanding the implication of mental health issues on entrepreneur performance requires extensive research on the risks and adverse impacts that come with entrepreneurial intention. The mental health of entrepreneurs has become an increasing concern, especially due to the recent global pandemic. After the novel virus was discovered, employees grew fear that they could be exposed to the disease and progressively spread the same to their families or co- workers. Overall, pandemic related stressors such as increased uncertainty about job security, social isolation during the pandemic, changes in work and domestic responsibilities, and concerns about financial stability have further impacted employee’s mental health. Simultaneously, start-up enterprises have been linked to high levels of stress due to the work- related practices that are required to promote future growth. Conditions such as depression have been recorded as the most common issues costing the US over $210 billion - half of this total being paid by entrepreneurs (McCormack & Shropshall, 2022). Furthermore, depression occurs alongside other chronic illnesses, therefore amplifying its effects in interrupting productive, employee engagement and organizational sustainability. Workplace stressors such as lack of social support, unclear work roles, and change in working patterns were linked to increased risk for negative mental health outcomes during the pandemic. Poor mental health amongst start-up employees can have debilitating impact on the individual and go beyond to the organisation as a whole. The indirect costs of mental health issues include lost productivity which are used from absenteeism and performance decrements during working hours (McCormack & Shropshall, 2022). Hence, due to the importance of addressing mental health stressors, entrepreneurs should

6 seek guidance on how to implement broad, evidence based, affordable interventions that can counter the negative impacts. Entrepreneurs in start-ups suffered from the double impact of Covid-19 pandemic. On the one hand, the health of these individuals was threatened due to the high rate of infections. On the other hand, the pandemic led to restrictions which significantly affected the entrepreneur’s wellbeing and mental health. Xu and Jia (2022) note that if the start-ups were well funded and operational before the pandemic, then the case of mental health would have been different because of the status of the organizations and potentiality of sustainability. Nonetheless, few studies have explored the impact of the recent pandemic on the productivity of employees within a start-up. Scholars have found that while different individuals had developed essential cooing strategies, the pandemic took toll on the businesses due to interruptions to human resource productivity. In most cases, the entrepreneur’s mental resilience would be adjusted based on the underlying attributes of the firm. Hence, if a firm was stable and had an equally functional workforce pre-pandemic, then the coping mechanisms of the employees during the pandemic would have been effectively defined to reduce disruptions to typical operations and therefore promote productivity and employee engagement. The pandemic reduced the value of human capital by interfering with the output that humans can deliver with underlying mental stressors. There are multiple ways that have been researched over the years to help with the screening and management of mental health issues within the workplace. First, establishing an employee assistance programs (EAP) is significant in ensuring the productivity and engagement of the staff remains optimal. During the pandemic, factors such as social isolation and work from home policies denied the respective entrepreneurs from engaging with the business networks and contribute to the overall productivity of the firms

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7 and the national economy. The pandemic reduced employee’s capacity to remain productive and work on duty. Moreover, the entrepreneurs could not work as accurately and as desired due to the reduced efficiency and efficacy of their actions. According to the conservation of resources (COR) theory, as reported by Xu and Jia (2022), limited resources present during the pandemic meant that entrepreneurs had to leverage the input of a smaller workforce. For most entrepreneurs, the pandemic meant that they had to slash some job positions, initiate downsizing strategies to ensure the company remains financially capable of operating. Such critical decisions accounted for the increased prevalence of mental health issues amongst the start-ups. Therefore, acknowledging the impact of finite resources on mental health was critical in developing strategies that not only promote healthy practices amongst the entrepreneurs but also guarantee sustainability of the enterprises. Recommendations and Solutions Covid-19 caused fear amongst entrepreneurs due to the inherent health risk of infection and the negative impact that was witnessed in the operation of start-ups. According to Aarons and Sawitzky (2006), there is increased traction toward evidence-based mental health interventions applications in the broad society. EWOR Team (2022) note that mental health issues at the workplace are caused by factors such as stress, loneliness, insufficient resources, impression management, and work-life balance. One of the key ways to cope with the mental stressors in the entrepreneurial world is to surround oneself with the right people ( How to Manage the Fear of Failure as an Entrepreneur, n.d.). This approach requires the creation of a positive workplace culture that provides social, emotional, and therapeutic support to the respective entrepreneurs. Financial literacy and planning are also important in addressing mental health issues amongst entrepreneurs because lack of sufficient resources is among the causes of

8 deterioration in personal well-being. Entrepreneurs should create time for self-care where models such as mindful meditation can be used to promote self-awareness and improve coping skills (Xu et al., 2021). Additionally, joining networks of entrepreneurs with similar mental health goals can be an effective means of developing a social support system crucial in addressing work-related stressors. In severe cases, startups may have to leverage professional help in the form of therapy. Thus, given the impact of stress on individual and group performance, entrepreneurs need to have access to solutions for coping with the stressors, especially post-pandemic. The new conditions introduced by the pandemic could adversely affect human resources if management of start-ups does not consider the significance of addressing mental health issues caused by Covid-19. Promoting mental health and creating awareness in the workplace requires entrepreneurs to focus on two main elements. First, creating an environment for open dialogue offered an imperial for driving positive change. Having two-way communication amongst the entrepreneurs in a start-up is the first step towards employee engagement on topics such as mental health (McCormack & Shropshall, 2022). Notably, despite the pandemic exacerbating the state of mental health in employees, the case remains highly stigmatized, therefore rendering any efforts towards solving the issue obsolete unless effective communication is achieved. Sincere feedback mechanisms are important in finding the views of different individuals in the workplace and it offers an opportunity for inculcating the same into workplace policies and cultures (McCormack & Shropshall, 2022). Secondly, entrepreneurs should focus on establishing and strengthening active resilience. Indeed, stress and mental health issues may be inevitable in some cases because of the nature of work, irrespective of the global pandemic. Start-ups can meet this condition is by providing flexible working hours, offering work-based mental healthcare services, and addressing factors such as compensation given that insufficiency of financial

9 resources is among the top stressors. Employees expect the management to provide solutions that can combat workplace stressors and therefore promote productivity (McCormack & Shropshall, 2022). Therefore, the overall recommendation is for businesses to establish policies and programs that are proactive in creating awareness on the criticality of mental health and its impact on individual and organizational performance. Limitations on the Current Topic The entrepreneurial work associated with startups can be challenging. On the one hand, entrepreneurs may enjoy the financial freedom that comes with a successful business venture but on the other hand, the entrepreneurs may be exposed to increased risk for depression and suicide due to work and life-related stress (Cubbon et al., 2021). Nonetheless, much of the research focuses on the key traits that make entrepreneurs successful than addressing the potentially detrimental mental health factors associated with enterprises. Alta Loma (2022) and Roggli (2022) note that key entrepreneurial traits such as risk-taking and obsessive-compulsive behaviors put such individuals at more risk of addiction and mental conditions. Several studies connect Attention Deficit Hyper Disorder (ADHD) traits with “entrepreneurial intention.” Hence, it is essential to conduct extensive research on how studying and evaluating mental health conditions in the workplace is critical in promoting the well-being of entrepreneurs and guaranteeing the sustainability of the startup. Limitations of the Study The literature and reports used in this research provide essential information regarding the importance of assessing mental health among entrepreneurs but it has limitations. First, the studies used self-reported measures meaning that the information is preliminary and not conclusive (Spector, 2019). Additionally, cross-sectional study designs are used in the studies

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10 meaning that the data provided cannot be used to define the causal relationship between stress, entrepreneurial performance, and Covid-19 mediated impacts. Therefore, the overall deficiency of these studies is that while the gap in the longitudinal comprehension of mental health proclivities, variations, and issues discusses strengths and advantages, these same attributes may imply susceptibilities and liabilities in divergent points of a startup’s life cycle (Spector, 2019). Hence, the limitations confer the need for the replication of such studies with the appropriate methodology.

11 References Roggli, L. (2022, June 15). Entrepreneurship and ADHD: Fast brain, fast company? ADDitude. https://www.additudemag.com/entrepreneurship-adhd-business-research-traits-stories/ Aarons, G. A., & Sawitzky, A. C. (2006). Organizational culture and climate and mental health provider attitudes toward evidence-based practice. Psychological Services , 3 (1), 61–72. https://doi.org/10.1037/1541-1559.3.1.61 Alta Loma. (2022, February 17). Entrepreneurs at risk of addiction . https://www.altaloma.com/why-the-traits-of-entrepreneurs-can-lead-to-addiction-and- mental-illness/ Bruder, J. (2013, September 1). The Psychological Price of Entrepreneurship . Inc.Africa . https://incafrica.com/library/jessica-bruder-psychological-price-of-entrepreneurship Cubbon, L., Darga, K., Wisnesky, U. D., Dennett, L., & Guptill, C. (2020). Depression among entrepreneurs: A scoping review. Small Business Economics , 57 (2), 781–805. https://doi.org/10.1007/s11187-020-00382-4 EWOR Team. (2022, July 19). How to tackle mental health struggles as an entrepreneur . EWOR. https://ewor.io/how-to-tackle-mental-health-struggles-as-an- entrepreneur/#What_Causes_Entrepreneurs_to_Experience_Mental_Illnesses Faghy, M. A., Arena, R., Babu, A. S., Christle, J. W., Marzolini, S., Popovic, D., Vermeesch, A., Pronk, N. P., Stoner, L., & Smith, A. (2022). Post pandemic research priorities: A consensus statement from the HL-Pivot. Progress in Cardiovascular Diseases , 73 , 2–16. https://doi.org/10.1016/j.pcad.2022.07.001 Freeman, M. A., Johnson, S. X. L., Staudenmaier, P. J., & Rizzer, M. K. (2015). Are Entrepreneurs “Touched with Fire”? 1–34.

12 Freeman, M. A., Staudenmaier, P. J., Zisser, M. R., & Andresen, L. A. (2018). The prevalence and co-occurrence of psychiatric conditions among entrepreneurs and their families. Small Business Economics , 53 (2), 323–342. https://doi.org/10.1007/s11187-018-0059-8 Goncalves, D., Bergquist, M., Bunk, R., & Alänge, S. (2020). Cultural aspects of organizational agility affecting Digital Innovation. Journal of Entrepreneurship, Management and Innovation , 16 (4), 13–46. https://doi.org/10.7341/20201641 Haase, A., & Eberl, P. (2019). The challenges of routinizing for Building Resilient Startups. Journal of Small Business Management , 57 (sup2), 579–597. https://doi.org/10.1111/jsbm.12511 Heinz, K. (2021, October 18). Startup culture: What it is, why it matters and how to build it . Built In. https://builtin.com/company-culture/startup-culture How to Manage the Fear of Failure as an Entrepreneur . Inc.Africa - Everything You Need to Start, Run and Grow Your Business in Africa. (n.d.). https://incafrica.com/library/how-to- manage-the-fear-of-failure-as-an-entrepreneur Kerrigan, R. (2018, November 1). Startup vs. corporate: Which is right for you? HBS Online . Business Insights Blog. https://online.hbs.edu/blog/post/startup-vs-corporate-culture Lee, B. (2021, May 13). 72% of entrepreneurs suffer from mental health issues. here's why-and what to do about it . Minutes. https://minutes.co/72-of-entrepreneurs-suffer-from-mental- health-issues-heres-why-and-what-to-do-about-it/ Levendusky, P. (2022, June 9). What employers need to know about mental health in the workplace . McLean Hospital. https://www.mcleanhospital.org/essential/what-employers- need-know-about-mental-health-workplace

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13 McCormack, D., & Shropshall, D. (2022). Why organizations need to focus on their employee’s mental health . https://www.weforum.org/agenda/2022/06/why-organizations-need-to- focus-on-their-employee’s-mental-health/ Mousa, M., & Samara, G. (2022). Mental health of business academics within the covid-19 ERA: Can meaningful work help? A qualitative study. Employee Relations: The International Journal , 44 (4), 764–784. https://doi.org/10.1108/er-04-2021-0170 Nohr, E. A., & Liew, Z. (2018). How to investigate and adjust for selection bias in cohort studies. Acta Obstetricia Et Gynecologica Scandinavica , 97 (4), 407–416. https://doi.org/10.1111/aogs.13319 Paychex. (2022, October 26). Effects of mental health in the workplace & why it's important . https://www.paychex.com/articles/human-resources/workplace-mental-health-effects Pierce, L., & Rider, C. I. (2022). Supporting mental health at work (comment on “the epidemic of Mental Disorders in business”). Administrative Science Quarterly , 67 (1), 56–69. https://doi.org/10.1177/00018392211072479 Singh, N. (2018, October 10). From Elon Musk to Kate Spade, here are four entrepreneurs who struggled with depression . Entrepreneur. https://www.entrepreneur.com/en- au/entrepreneurs/from-elon-musk-to-kate-spade-here-are-four-entrepreneurs/321463 Spector, P. E. (2019). Do not cross me: Optimizing the use of cross-sectional designs. Journal of Business and Psychology , 34 (2), 125–137. https://doi.org/10.1007/s10869-018-09613-8 Xu, X., Huang, D., & Chen, Q. (2021). Stress and coping among micro-entrepreneurs of peer-to- peer accommodation. International Journal of Hospitality Management , 97 , 103009. https://doi.org/10.1016/j.ijhm.2021.103009

14 Xu, Z., & Jia, H. (2022). The influence of covid-19 on Entrepreneur's psychological well-being. Frontiers in Psychology , 12 . https://doi.org/10.3389/fpsyg.2021.823542 Yadav, H., Kar, A. K., & Kashiramka, S. (2021). How does entrepreneurial orientation and SDG orientation of CEOS evolve before and during a pandemic. Journal of Enterprise Information Management , 35 (1), 160–178. https://doi.org/10.1108/jeim-03-2021-0149

383866114 Impact of COVID

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