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Benefits August 10, 2004
Executives Embrace Self-Employment in Tough Job Market
August 10, 2004 (PLANSPONSOR.com) - While the trend
smacks of a return to the go-go 1990s, signs that the number
of former executives starting their own business has nearly
doubled in the last two quarters is not necessarily a sign of
economic strength, according to a new survey.
Reported by Alison Cooke
Global outplacement firm Challenger, Gray & Christmas, Inc. reported today that the number of new firms started by jobless managers and executives who earned more than $100,000 in their previous jobs has increased 96% since the end of last year.
Of the 3,000 discharged managers and executives earning at least $100,000 surveyed quarterly for the Challenger Job Market Index, 18% started their own firms during the second quarter, an increase of 45% from the 12.4% who did the same during the first quarter of 2004, according to a press release. The Challenger Index also reported that 9.9% of managers and executives earning less than $100,000 started businesses in the second quarter, a slight decrease from the
10.1% reported in the first quarter, and an increase from the 6.7% reported in the fourth quarter 2003.
However, the firm pointed out that many of the executives are well suited for entrepreneurship, which could also explain why the $100,000 earners were nearly twice as likely to start their own business as job-seeking managers and executives who earned less than $100,000 in their previous position.
Still, Challenger notes only 18% of jobless managers and executives earning at least $100,000 in their previous positions started their own firms in Q2 – and higher earners who found jobs were also more likely than lower earners to win equivalent or better salaries (94% matched or beat their last paycheck, while “just” 86% of sub-$100,000 earners won equivalent or better salaries).