The flip side of the ‘big resignation’ – a small business boom

An increase in the creation of new businesses suggests that the pandemic has created a landscape in which entrepreneurs and startups can thrive and that new innovations can innovate.

“It has been a really fertile period. We have seen a huge increase in the number of new businesses since the start of the pandemic, ”said Julia Pollak, chief economist at ZipRecruiter. “There are more opportunities out there.”

Government data shows a record gap between the number of job vacancies and the number of unemployed – 11 million against 7.4 million. While this is a puzzle of epic proportions for hiring managers and HR managers, economists and labor market experts say there is an important silver lining.

The Census Bureau’s Business Training Statistics dataset shows an increase in the number of people filling out tax documents to start a new business. From January to November 2021, just under 5 million new business applications were submitted, a 55% jump from the same period in 2019. Moreover, a significant number of them are what the Census Bureau calls “high propensity applications,” which means they are likely to create new jobs.

“There are some big themes happening,” said Dave Carvajal, CEO of Dave Partners, a recruiting company focused on the tech industry. “There is a large amount of money going into venture capital funded startups,” he said. Much of this is due to the rise of consumers and digital native workers – and the pandemic has done the rest.

“The way people want to operate and the way they think is changing – and new technology companies that develop these technologies and systems are making that easier,” Carvajal said. “The way these people think is totally different from that of past generations. What this pandemic has done is accelerate a lot of these behavioral patterns… It was quite a catalyst. “

You realize that you are working overtime every week. If you do, you might as well do it to start your own business.

Frank LaMonaca, certified mentor at SCORE, a program that provides executive mentoring to entrepreneurs, said the pandemic offered an unexpected “window of opportunity” for people eager to go into business. “What this has given them is the time to re-evaluate the future of work in their life,” he said, adding that the two most popular SCORE workshops focus respectively on the fundamentals of business and social media marketing.

“I loved teaching but… it was time for me to go, basically,” said Danielle Neal, a sophomore teacher in Baltimore who worked with SCORE Mentors to hone her business skills. She quit in May at the end of the school year to turn what had been a side project helping small businesses navigate social media into a full-time business.

“The market is there. Small business owners want to market themselves, but they don’t understand the world of social media, ”Neal said, adding that she hopes she can grow enough next year to hire. “In the long term, I would like to hire people… I want my own agency with other employees.

For some former worker bees, the turning point was to see their professional responsibilities multiply in the wake of the pandemic. The pressure of juggling simultaneous desktop and online programs when her Florida-based employer reopened has made Chelsea Kidd take notice.

“I was back in the office and also supported many virtual initiatives. It had been a pretty difficult two-pronged working approach, ”she said. “You realize that you are working overtime every week. If you do, you might as well do it to start your own business.

Kidd, also a SCORE mentee, quit her job in late 2020 and moved to Montana from South Florida in 2021 to start SiteWell Solutions, a wellbeing consulting company focused on remote workers.

The ability to work from home expands the workforce in several ways.

“I have been in the field of corporate well-being for about 15 years [and] I was just ready to take the plunge, ”she said.

“The other thing that I think is a permanent change is the ability to work from home,” LaMonaca said. “It expands the workforce in a number of ways. “

This decoupling of the demand for talent from a particular location is not only good for entrepreneurs. It is also promising from a macroeconomic point of view. Researchers say that one of the factors contributing to a lukewarm and uneven recovery after the Great Recession was the lack of new business development.

The current wave of startups is also a huge boon for some of the many workers who have taken advantage of the disruption generated by the pandemic to take a new step in their career path.

“I think what has changed is post-pandemic, this whole concept of just telecommuting has opened up a world of new opportunities,” said Anand Balasubramanian, who left a job he had worked for for six years because more Great acceptance of telecommuting has given him opportunities beyond Ames, Iowa, where he lives.

Balasubramanian said he had a “good relationship” with his colleagues and management at his old job, but recently took a job at a New York-based startup, with a dispersed workforce of around two dozen.

“As far as my career, where I wanted to go, my personal journey is that I wanted to experience a startup from the ground floor,” he said. “I want to learn how to build a marketing team. I’m going … with the right attitude to learn.

Carvajal said the fierce competition for talent today gives workers the confidence they need to bet on a high-stakes gig or decide to go it alone. “In a recessionary economy, people tend to stay in their jobs longer and they will tolerate underemployment,” he said. “In the economy we are in right now, people feel so secure that they are really reaching and aspiring to bigger jobs, bigger growth and bigger opportunities. “

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