In an increasingly knowledge-driven and service-based economy, a company’s greatest asset is very often its employees. That’s why HR departments spend so much time, effort, and money on efforts to attract and retain their top talent.
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And while HR professionals and business leaders might fear the loss of top talent to competitors in their industry, some experts point out that many top performers are actually jumping ship to work for themselves.
A Rise in Entrepreneurialism
According to a recent McKinsey survey, only 7% of Fortune 500 executives believe they retain high performers. Some experts point to data from the Conference Board, which indicate that the United States and Europe will fall short by 18 million in terms of their needs for high-skilled workers in the near future.
“Interestingly, this number is eerily similar to the 18 million independent workers (aka solopreneurs) that were identified by MBO Partners, which provides technology solutions to self-employed workers,” says Eddie Yoon and Christopher Lochhead for Harvard Business Review.
Yoon and Lockhead point out that there are both economic and emotional drivers behind the emergence of a growing number of solopreneurs. Here we’ll take a look at those drivers.
The Economic Drivers
“The economic business case is quite clear,” says Yoon and Lockhead. “Many high-skill professionals will earn more money on their own than by working for someone.” They cite 2015 data from the U.S. Census Bureau, which estimated that there were 2.7 million nonemployer firms that are run solely by owners. Nearly 70% of those solo businesses had annual incomes of $100,000 to $250,000—two to four times the average U.S. household income.
The Emotional Drivers
Yoon and Lockhead note that there also are a number of different emotional factors at play for solopreneurs. Many are inherently introverts and are simply more comfortable working alone. Others dislike the political nature of the workplace as they advance through the ranks. Some feel like they are carrying the weight of numerous coworkers with little benefit to themselves for doing so. And, of course, many simply prefer the independence.
While many employers fear having their top talent poached by industry competitors, they should also be aware of another risk—the risk that these all-stars might decide they will have better compensation and more fulfilling work if they strike out on their own.