Companies that want to beat the talent shortage will have to compete with a formidable rival: the self-employed in the coming years.
“Having this option allows employees to demand more from their employers,” said Luke Pardue, an economist at Gusto, who manages payroll and provides benefits to 200,000 small businesses.
Many of those who started a business in 2021 were inspired by new business opportunities, with 25% of founders starting last year citing this motive, according to recent research. Research by Gusto in his New Business Owner Survey. 36% of entrepreneurs said they started their business after voluntarily quitting their jobs.
As many Americans try to take advantage of the opportunities they have discovered, creating new businesses is a … [+]
“The barriers to starting a business have never been lower,” says Pardue. “If you were to start a bakery or restaurant, you would have to find a space to rent. That disappeared overnight. People can start a hair salon in their garage or a jewelry store in their living room.”
The research offers an interesting window into the future of entrepreneurship in the post-pandemic environment. Here are some key trends:
Women and entrepreneurs of color flock to entrepreneurship. New business founders were likely to be black, Hispanic, and female in 2020 and 2021 than in 2019. In 2019, 28% of new entrepreneurs were female, up from 49% in 2021. And in 2019, fewer than 3 were black or African American entrepreneurs. % of entrepreneurs; by 2021, that share had tripled to 9%.
“If there’s one thing the pandemic has shown, it’s that the previous operating system didn’t work for much of America, especially for women and workers of color who had different demands in their lives,” Pardue said.
Professional services are hot: 42% of new businesses launched in 2021 were in professional services – and 48% of entrepreneurs who left their jobs started a business in this sector.
The shortage of childcare plays a role. 28% of women with children at home started a business because of their need for childcare.
Access to capital remains a challenge: While 11% of all new entrepreneurs were able to finance their startups with a private business loan, only 8% of Spanish entrepreneurs and 6% of black entrepreneurs received this financing. The approval rate for private loans for Hispanic entrepreneurs was less than half that of white entrepreneurs. Against this background, a third of black entrepreneurs and a quarter of Hispanic entrepreneurs took part-time jobs to cover operating costs.
LGBT-owned businesses are thriving. Gusto estimates that there are 1.4 million LGBT businesses that bring in $1.7 trillion each year.
With entrepreneurship beckoning so many Americans — 5.4 million registered new businesses in 2021 alone — this increasingly popular employment option is likely to shape the return-to-office debate for years to come. The debate will be moot if employees simply refuse to apply for jobs and instead create their own work.
“A company may want to see me back in the office, but I can only break out, work when I want, and not be subject to the return-to-office mandate,” Pardue notes. “If there’s one overarching theme, it’s that the pandemic has created a clash between employees’ need for flexibility and the system’s need to work on a 9-to-5 schedule and let people into the office. to go.
“That’s one of the reasons we have 11 million job openings that we’ve never seen before,” he adds. “Entrepreneurship has been a great outlet for the economy, creating jobs and economic opportunities while meeting the work needs of these former employees.”
