If you’ve been thinking about starting your own business lately, you’re not alone.Americans are starting businesses in record numbers during the pandemic, at an above-trend pace Continues until 2023.
Unfortunately, many of these businesses won’t last long: According to the Small Business Administration, 30 percent of new businesses fail within two years, and half don’t last five years. While some of these hapless founders will seek out new ventures, many others will attempt to rejoin the traditional workforce.
You can’t blame them. People often think of “back to work” as a safety net for adventurous entrepreneurs.as Professor of Management people who study entrepreneurshipwe want to see if this is true.
Filter out
so we investigated More than 700 recruiting professionals, along with seven former entrepreneurs who have successfully returned to the workforce, to determine if founders really have an easy time finding new jobs.
We found that former business owners are actually less likely to land an interview than applicants with only traditional experience. This is true regardless of whether they sold or closed the business. The longer they stay out of the traditional workforce, the less chance of success.
Why are employers reluctant to give former business owners a chance?
It starts at the earliest stages, where recruiters screen candidates for interviews. We found that recruiters were concerned that entrepreneurs would jump ship and start their own companies as quickly as possible. This is a problem for employers because hiring is a long and expensive process that can take months or even years to pay off.
For example, one recruiter told us, “I’m looking for candidates who will be permanent employees because we invest heavily in each employee. When I interview people, if they say they want to start their own business or already have their own business, then that’s usually a red flag.”
A related concern: Employees who leave to start new ventures may seek to poach talent, customers and strategies from their original employers.
Recruiters also worry that ex-entrepreneurs may refuse to take instructions. Taking the time to be your own boss can make it difficult for you to settle for lower positions in the organizational hierarchy. As one recruiter in our study put it, former business owners “have a habit of being the one who makes all the decisions.”
They also raise the question of job fit, questioning whether the knowledge and abilities of ex-entrepreneurs can be translated into traditional jobs. “The concern is that the skills they have are not transferable,” said one of our interviewees. Also, for entrepreneurs working alone, it can be difficult for recruiters to know how they perform when they work with others.
Even if a former entrepreneur is a great fit for a role, recruiters may not be able to make a connection because of stereotypes or misunderstandings about their experiences. A former bakery owner we interviewed recalled applying for a position and being sorted based on his experience: “They said, ‘Oh, I wish we were hiring a baker!'” I said, “No , no, no, I’m applying to your management.” Like they thought I only knew one baker, but far from it. “
get an interview
Our research adds mounting evidence It is difficult for ex-entrepreneurs to get interviews and hires. Thankfully, it also provides insights that organizations can use to improve their applicant pools, and that aspiring candidates can use to improve their odds.
Our research found that ex-entrepreneurs face less bias when applying for jobs that appear to be entrepreneurial—in other words, jobs that fit stereotypes about business owners. So, for example, they are more likely to get an interview when applying for a role with a lot of autonomy (such as new business development) than for a role that requires a lot of rules (such as legal compliance).
Relatedly, our research suggests that recruiters—perhaps unintentionally—are biased against ex-entrepreneurs. Acknowledging these tendencies is a good start in reducing their impact.Plus, not all recruiters are equally affected: Another recent study showed that there are also Previous entrepreneurial experience And women and new recruits are less likely to screen out former business owners. As a result, organizations with more diverse hiring teams and a deeper understanding of entrepreneurial experience are likely to see less biased results.
In the case of ex-entrepreneur candidates, it is wise to emphasize the welcome aspects of their work history. For example, a recent Boston Consulting Group survey found that executives cite innovation as one of their top priorities. Three Priorities.Ex-entrepreneurs should emphasize their many valuable traits – such as Passionate and Creative – Contribute to innovation.
A lack of traditional employment history can create a barrier for entrepreneurs trying to re-enter the workforce. Recruiters who ignore value risk miss out on great candidates.
Jacob Waddingham is an assistant professor of management, Texas State University and Miles Zachary is Associate Professor of Management and Entrepreneurship Auburn University.
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