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Why Is There a Rise in Self-Employment?
Self-employment rates are the highest they’ve been since the 2008 recession.
Self-employment rates have spiked, with the amount of people self-employed reaching its highest point since the Great Recession of 2008. Many associate this spike with COVID-19 consequences, but this has not been the only change.
At the start of the pandemic, companies were left to lay off scores of employees. With many non-essential sectors shut down, working-aged people had a slim set of options for work and turned to self employment. For those who were retained during the pandemic, the remote and hybrid models created challenges for company culture and connection, pushing otherwise gainfully employed individuals toward a work model that they were in full control of.
However, this trend has snowballed, and individuals continue to pursue self-employment despite the fact that a broad portion of the general public considers the pandemic to be “over.”
Statistics largely indicate that non-white women, often with young children at home, have turned to self-employment. From here, it can be extrapolated that key drivers include a lack of access to childcare or broader desire for workplace flexibility at home.
The allure of being one’s own boss is also a key contributor to the growing desire to pursue self-employment. With this comes the flexibility that workers cannot always find in more traditional roles, but it also creates a unique work environment where entrepreneurs feel even more control over their financial futures.
Finally, as the circumstances that push employees out of traditional work spaces continue to have an impact, employers are feeling the strain of workplace friction and less-than-enthusiastic employees. Though recent data shows that there are, in fact, more open jobs than there are unemployed individuals, factors that inform where job seekers want to work include pay, benefits and flexibility. Some individuals even make the argument that there is not a labor shortage, rather a shortage of jobs worth working.
As such, some job seekers—or formerly traditionally employed people—feel that they can provide themselves the benefits they would seek from a company. With employees leaving companies where they feel undervalued or not pursuing job opportunities with organizations that do not offer a certain standard of compensation, many jobs are left unfilled, forcing organizations to rely on outside help. This, again, works out very well for self-employed individuals looking to work for themselves, set their own rates and control the work environment in which they function.
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