Uncertainty, Instability and Financial Fears Have Driven Self-Employment to Historic Levels
The rise in self-employment has reached an all-time high. Bloomberg reports that more Americans are self-employed than any time since the 2008 crisis. The trend has continued to grow steadily over the last decade as more workers leave traditional jobs in search of opportunities for additional freedom and control. As of October 2022, there were approximately 16.9 million self-employed individuals in the United States, according to the Bureau of Labor Statistics data.
This is an increase of 1.9 million from 2015 statistics. Though self-employment was already on the rise, the COVID-19 pandemic propelled this trend to historical new levels, hitting an all-time high in May of 2022. Extreme job uncertainty paired with the lowest job satisfaction rates in 20 years and the highest inflation rates in 4 decades caused many workers to reconsider their current career trajectory.
As businesses were forced to reduce their workforce either temporarily or permanently, the realities of job uncertainty, instability in the economy and growing financial fears quickly sank in for workers across the country. Experiencing feelings of lack of control due to reliance on an employer for steady income, paired with extra time at home and high levels of added stress, many Americans were inspired to re-chart the roadmap of their future. Workers began to reassess what they wanted – taking a deeper look at work/life balance, flexibility, freedom and finding avenues to gain back control of when and where they wanted to work.
Self-Employment and the Pandemic
For those that stayed employed, the pandemic brought on the radical change of moving to a hybrid or remote environment. For many, initial feelings of isolation quickly changed into contentment for the new working model. While thought to be a temporary shift in working conditions through the pandemic, those changes had a lasting impact, reshaping many new permanent working norms.
All this workplace disruption caused a major shift in the relationship between employers and employees. As employees became accustomed to this new working “norm” there was pressure placed on employers to adjust business practices to meet the shifting needs of the workforce. Workers didn’t want to give up the flexibility of hybrid or remote work, time saved without a commute, control over their environment or freedom to prioritize themselves and their families.
While many companies could adjust to the evolution of workforce demands, many were not. With a slowing economy and a rise in labor costs, even major employers got hit hard. Companies such as Amazon, Meta, Salesforce and Peloton experienced layoffs which further perpetuated employees’ distrust in the stability of even the largest employers. As for companies that did retain their workforce, many were left with the challenges of empty offices or remote cultures they didn’t know how to cultivate.
All these factors combined to serve as an incubator for unsatisfied workers to explore alternate career paths. While risking a steady and predictable paycheck, to pursue the dream of being self-employed can be scary. From April 2020 through March 2022, the nation saw 3% of the workforce exited their jobs according to the Job Openings and Labor Turnover Survey (JOLTS).
Being Your Own Boss
The allure to “be your own boss” has given rise to an alternative workforce of people who are looking for a level of autonomy and control that working for another person doesn’t provide. Many seek flexibility, self-fulfillment, work/life balance, job satisfaction and greater earning potential. Workers now realize they don’t have to settle for a career where they feel constantly burnt out, stressed out and underappreciated.
There are many avenues to take when going into business for yourself. The path to going independent is as unique as the person.
There are many avenues to take when going into business for yourself. The path to going independent is as unique as the person. From freelancer and small-business owner to independent contractor and side hustler, the definition of “self-employed” has continued to evolve and so have the opportunities surrounding it. Some self-employment opportunities require schooling or special certifications for careers such as real estate brokers, medical professionals, or master plumbers. While there are numerous other opportunities that require no prior qualifications or education, such as food delivery service, childcare and creating social media content.
Serving the Self-Employed Workforce
With the rising cost of wages, many companies are opting for more a hybrid model workforce – blending full-time employees with contract or freelance employees. This dynamic will continue to fuel a variety of additional self-employment opportunities for specialized and non-specialized workers.
While many businesses are still trying to catch up with a shortage in salaried labor, some are thriving as they were built specifically to serve the self-employed workforce. Companies like WeWork are focused on providing flexible solutions for all business entities, from a team of one to a Fortune 500 company. Furthermore, a company like Sola Salon Studios is focused on providing a business model founded explicitly with the entrepreneur in mind.
Sola Salons has created a path for independent business ownership for beauty professionals by seeing a gap and creating an entire category around it. Founded in 2004, Sola has not only created a turn-key solution for beauty professionals to explore a better life as an entrepreneur but also provided franchising opportunities to business owners and developers seeking to grow their financial portfolio with a brand that has a meaningful mission.
As long as workers desire the ability to be in full control of their business and schedule, build meaningful networks, pursue their passions, have control over their financial futures and create their own work environments, the rise in self-employment will continue. Companies that find success will be the ones that learn to leverage or support this growing demographic of the workforce.