Four demographic trends are shape-shifting the future of work:
- First, over 45% of Americans will be leaving the workforce in the next decade as they reach the age of retirement. This scoots Generation X into leadership roles, which they will undoubtedly share with the Millennials, who work differently that their predecessors.
- Next, women’s role in the economy is changing shape. More than 9.4 million firms in the U.S. are women-owned, employing 7.9 million people and generating 1.5 trillion in sales in 2015.
- Third on the list, we have a large demographic shift on the way, due to the fact that 92% of new population growth is attributed to ethnic minorities. Say goodbye to what we now call the “minority” because it will soon be the majority.
- Lastly, how we work is changing. Temporary worker demand is rising with predictions that 40 percent of the workforce will be contingent-workers by 2020.
While there are many ways in which these trends overlap, one that stands out is entrepreneurship. Each of these groups is trending toward entrepreneurship, and if you want to keep your best talent, you’d be wise to examine why.
Let’s look more closely at how each of the four trends overlap with entrepreneurship.
The Intersection of Four Future Workforce Trends and Entrepreneurship
When we say 45% of the population will leave the workforce for “retirement” in the next decade, the statement may be misleading because these days, retirement takes many forms. One of those forms is “retirepreneurship”. As the name suggests, it means that retirement takes the form of individuals starting their own entrepreneurial pursuits after leaving their more traditional workplaces. This is not a small trend; the Merrill Lynch Retirement Study conducted in partnership with Age Wave reports that three in five retirees launch a new line of work.
And the large cohort that will eventually take the Baby Boomer’s place (Millennials) have launched about twice as many businesses as their Boomer counterparts, according to the 2016 BNP Paribas Global Entrepreneur Report. Of those who didn’t, over 62% have considered starting their own business. This is a generation trending toward entrepreneurship from the start, many starting their first business around age 27.
The future of women in the workplace will be greatly impacted by entrepreneurship. Between 1997 and 2014, the total number of businesses in the United States increased by 47%, but the number of women-owned firms increased by 68% — a rate 1 ½ times the national average. 1,288 net new women-owned firms are launched each and ever day. These firms account for 31% of all privately held firms and contribute 14% of employment. In fact, Kauffman Foundation has dubbed the next ten years as “the Decade of the Woman Entrepreneur.”
An even thicker overlap becomes apparent when looking at the fact that the number of companies owned by Asian women has increased by 44.3%; black women-owned businesses have grown by 67.5% and Hispanic women-owned operations have increased by a whopping 87.5%. These firms employ 699,200 workers and generate an estimated $115 billion in revenue.
It’s very easy for a freelancer to slip into entrepreneurship. They work on their own terms, offer a service, and as their client list grows, have the opportunity to create a business for themselves.
How Do You Incorporate Entrepreneurship Into Your Organization?
If you’re familiar with my work, you know that I prepare leaders for the four major trends by helping them develop strategies to succeed in the new work-scape, and implement those strategies in a way that ensures their teams have the skills and knowledge to navigate the coming changes. One way of doing that is to consider the intersection of entrepreneurship in these changes, and identify ways to bring elements of entrepreneurship in-house in order to keep their best talent.
But how do you incorporate entrepreneurship into its antithesis—the corporate world? You first look at the reasons people are drawn to entrepreneurship. If you know how entrepreneurship meets the needs of individuals, you can find ways to meet those same needs in-house. Stay tuned– next week, we will take a look at common reasons people become entrepreneurs, and how you might shift your workplace culture to accommodate those same desires.