'Unprecedented' number of Americans considering self-employment

A new survey on the “Great Resignation” finds an interesting paradox: the more satisfied a professional worker is with their employment, the higher interest they have in self-employment.

That counterintuitive finding is from a new survey of 3,000 professionals with range of employment situations, conducted by Freshbooks, a cloud accounting software firm. The study found that 40% of traditionally employed professionals said they are thinking about switching to self-employment, with nearly half that number saying self-employment is their top goal in life.

Company officials say the report describes the ongoing “great retirement” with additional data split by gender, age, ethnicity, and region. “Freshbooks tracks employment trends annually, and we can confidently say this year’s report points to a significant labor force transformation happening in the mindset of American workers,” said Paul Cowan, chief marketing officer at Freshbooks. “A more entrepreneurial and independent population of workers will profoundly impact many things—from an increased need for digital tools and solutions to shifts in policy frameworks to how companies of all sizes attract and retain talent.”

No turning back

A top finding is that once people become self-employed, they tend to be happy with the change. The survey found that 95% of self-employed Americans said they plan to stay self-employed for the foreseeable future. In addition, among owners of businesses less than two years old, nearly two out of three (63%) agreed that self-employment remains the best career choice in uncertain times such as the pandemic. Also, 40% of entrepreneurs said COVID-19 at least in part created the opportunity for their self-employment.

Self-employed women said they are just as satisfied with and committed to their careers as male counterparts—but some continue to report gender-based challenges, such as being taken less seriously or having to work harder than men doing the same work (25% agreed with those statements). At the same time, they report high levels of satisfaction with being self-employed—almost 80% say they are happier with their careers since making the switch, and 70% say they have much more career control, compared to their positions in traditional jobs. In addition, most (76%) say they earn the same of more money, while 69% report improved work-life balance.

Taking a look, kicking the tires

“An unprecedented number of traditionally employed Americans are now contemplating self-employment,” the study said. “Overall, 40% say it’s at least somewhat likely they’ll work for themselves within the next two years. The numbers are even higher among those under 35 and/or the highly educated (>50%).”

Two in five employees considering self-employment have an active “side hustle,” the survey found. And one-third said they are brand-building via social media. More than 60% of employees under 35 said they are considering self-employment in the next 5 years.

For minorities, the survey suggested people of color are motivated more for career fulfillment, as opposed to career control. About 10% of people of color said they were motivated to seek self-employment due to a “negative work” situation. The survey also found financial issues were on the minds of people of color—more than 30% of respondents identifying as visible minorities said that paying down debt is a barrier to becoming self-employed.

Overall, the study found many workers with an interest in self-employment at a time when career resets are widely accepted, even popular.

“American workers are feeling emboldened to make big changes in their lives. For those who have lost their jobs or suffered health setbacks, there may be no other choice,” the study said. “Regardless of the circumstances, self-employment is on a lot of peoples’ minds.”