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Your
EnterQuest Bulletin - Issue 450
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Thought
for the week: "Real knowledge is to know the extent of one's ignorance." Confucius |
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In
this week's issue:
Enterprise
in disguise and reluctant entrepreneurship
A
report published this week by the
Chartered Institute of Personnel and Development (CIPD) has posed some interesting questions about the current levels of
self-employment and the 'enterprise culture' in the UK.
According
to official figures there are 4.14 million people in self-employment
(about 14% of total employment) and latest statistics available
show that self employment was 300,000 higher in spring 2010 than
at the start of the recession in 2008 - a rise of about 8%.
In
addition figures
published by Barclays at the end of December also estimate
that there were 480,000 new business start ups in 2011, which is
the highest level for 75 years.
The
government have heralded this as a resurgence in the UK's enterprise
culture.
However
the CIPD's report suggests that these figures don't tell the whole
story, and Barclays have added a note of caution to the release
of their start up estimates.
Enterprise
analyst at Barclays, Dr Richard Roberts, has said that while there
had been an increase in the number of people starting up as a result
of spotting opportunities, many have also been as a result of redundancy
and therefore had no choice.
Dr
Roberts has also pointed out that the total stock of businesses
would only edge up by about 1-2% as a result of the rise in firms
closing down in the last year, and he has warned that quality of
start ups may be a problem in 2012 when even more start ups could
close down.
Our
own team's experience of working with Barclays and other banks in
the start up sector for more than 20 years concurs with this warning.
During previous recessions and downturns a rise in the volume of
start ups brought a corresponding rise in both the number of poor
quality new starters and in resulting enterprise mortality rates.
Our view is that this will be a certainty again, perhaps even more
likely with the scrapping of local face-to-face enterprise support
and the associated loss of vital start up filtering and control
of quality that went with it.
The
CIPD's analysis of the latest self-employment figures reinforces
this view. They have reported that almost 25% of current self employed
people are in the building/construction sector yet the number of
self employed construction workers is now less than in 2008. In
contrast to this those sectors with relatively smaller shares of
self employed numbers - which they name as including education,
finance, insurance, public administration, defence and social security
- are those sectors which have seen the biggest proportional increase
in self employment.
In
other words high numbers of start ups are coming from the public
sector and those other sectors that have experienced the highest
levels of job losses. People from unskilled occupations are also
reported to make up a fifth of the net increase.
Dr
John Philpot, Chief Economic Adviser at the CIPD has summarised
this as follows:
“The
typical self employed person remains a skilled tradesman, manager
or professional, but since the start of the recession the ranks
of the self employed have been swelled by a much wider array of
backgrounds and occupations, including many handymen without skills,
picking up whatever bits and pieces of work are available. These
self-employed 'odd jobbers' are helping to keep the lid on unemployment
but their emergence hardly suggests a surge in entrepreneurial zeal.
While some of these newly self-employed may make a long term commitment
to being their own boss, it's likely that most would take a job
with an employer again if only they could find one".
This
enterpise-skeptical summary hits the nail on the head and it reflects
our own experience while recruiting to fill posts in our team over
last two or three years. We have seen a much higher number of applications
for jobs we have advertised coming from self-employed people seeking
a return to employment rather than enquiring for freelance/contract
work, something we rarely witnessed prior to 2008.
There
are also reports that some public sector organisations have been
making employees redundant and then re-hiring them as self-employed
to do the work they were doing while employed - but for fewer days
and less money. This practice of 'enterprise in disguise' has already
resulted in some employers being found guilty of breaching employment
laws.
Intriguingly,
there are now a number of professionals whose LinkedIn profiles
state their current occupation both as 'self-employed', concurrent
with them also being 'employed', for example as 'Interim Manager',
at the organisation they name as being their immediate previous
employer.
This
'reluctant entrepreneurship' has also spread into other sectors,
with one prime example being a reported rise in the number of homeowners
reluctantly becoming landlords for the first time. According to
the Association of Residential Letting Agents (ARLA) almost half
of its members have reported a rise in the number of 'unplanned'
lettings in 2011. ARLA say that these reluctant landlords are cash-strapped
home owners who have struggled to sell their property and have put
their home onto the private rental market instead. This is an unregulated
sector riddled with pitfalls for those unwary, inexperienced landlords
who don’t understand the risks and fail to get appropriate
advice on how to operate rental arrangements properly.
Does
this rise in reluctant entrepreneurship, enterprise in disguise
and self-employed odd jobbers warrant the claims made by politicians
and start up 'bible-bashers' who suggest that Britain is experiencing
a resurgence in enterprise?
Or
does this camouflage true levels of unemployment and the extent
of non-sustainable self-employment and enterprise?
Or
is this, perhaps, an example of entrepreneurial zeal, but with a
nod and a wink?
As ever, comments and professional opinions are welcome, so please click here to have your say.
Each
week we provide you with summaries of some popular or emerging business
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Stock
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Veezzle is a stock
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and are free to use on blogs, websites or professional documents.
Tips
for webinar presenters
This
article from iMedia Connection provides advice
for presenting a successful webinar. Tips include using
readable graphics, maintaining pace and sticking to a schedule.
Online
time-tracking tool
Clockodo is an online time-tracking tool for small businesses and freelancers.
Working time can be categorised by customer or project and can also
be updated via the smartphone app. A 30-day free trial is available.
Tips
for writing a successful business blog
This Top Rank Blog article explains the key
elements of a successful business blog. It includes advice
for choosing a blog name, using design to stand out and making it
easy for users to share the blog via social media.
Here's
our weekly look at some unusual, daft and often ridiculous business
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Also
from EnterQuest's publisher |
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The
UK Small Business Marketing Bible contains hundreds
of tips and tactics for boosting your sales using proven marketing
strategies that work no matter what product or service you
sell. |
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