Starting up your own brokerage is a popular, and often lucrative, trend for brokers, but if you don’t want to burn your bridges in the corporate world, you may want to think twice.
Starting up your own brokerage is a popular, and often lucrative, trend for brokers, but if you don’t want to burn your bridges in the corporate world, you may want to think twice.
According to recent research by Erasmus University, the University of Munich and the University of Vienna, those who have been self-employed in the past are less likely to be considered for a corporate job later in life.
The researchers sent out nearly 200 fictitious applications for a range of jobs over the space of a year. The applicants were identical in their skills, education and experience, but half had recently been self-employed, and half had worked in a wage-earning job that required similar skills.
Just over twenty positive responses were received in total: 16 for wage-earners, and just six for the self-employed - meaning it is more than twice as difficult to be considered for a corporate job if you have previously run your own business.
The disparity could be due to a number of reasons, suggest the researchers.
- Discrimination: "In other words, employers dislike hiring former entrepreneurs for no objective reason.”
- Entrepreneurs don’t “fit” the organisation: “Some of the qualities that may lead to entrepreneurial success, such as a bias for change, risk-taking, and taking control, or the tendency to adopt unusual points of view, are not necessarily conducive to traditional company careers.”
- Self-employed workers may lack certain skills: “For example, formal training is more frequently offered in large than in small enterprises. Furthermore, the type of customers might differ between small entrepreneurial firms and established businesses with a brand name.”
Unfortunately, many former entrepreneurs have the potential to be perfectly viable or even exceptional employees, say the researchers, but will still be disadvantaged when job-hunting.
“Certain stereotypes about the self-employed may consistently cause them to be overlooked, even though there are, in reality, many different circumstances that could have led to their situation.”
The results are concerning, both because it could discourage entrepreneurialism amongst the workforce, as well as deny businesses the innovation and skills that many of these employees offer, say the researchers.
It is also something that is unlikely to change anytime soon, unless businesses make a conscious effort to promote the employment of former entrepreneurs.
“As with gender or racial discrimination, this is, from the company standpoint, not so much a fairness issue as an opportunity to create comparative advantage by selecting from a strong, but relatively neglected, pool of potential employees.”
