The Challenger Job Market Index for the first quarter of 2004 found that 10.1% of job seekers started their own companies in the January to March 2004 period – up from the 6.7% who did so in the fourth quarter of 2003. The latest figure is the highest since 10.6% of jobless managers and executives started businesses in the third quarter of 2000, according to Challenger, Gray & Christmas, the outplacement firm that runs the survey.
The poll found that 88% of those starting a business were older than 40, up from 74% in the fourth quarter. “These older individuals may have the most confidence in their abilities to establish a business. Not only do they have years of experience and business know-how, but through their careers they have probably established an extensive list of professional contacts,” observed chief executive John Challenger.
Older entrepreneurs may be encouraged by government job data that show significant job gains month after month for job seekers in their late 40s and 50s, Challenger said. The government’s March jobs report showed that employment among 45- to 54-year-olds increased by 493,000 over the last 12 months. Employment among those 55 and older surged by 1,031,000.
“This level of hiring offers a fairly comfortable safety net for those who are unable to find success as an entrepreneur. Luckily, the need for experienced workers is not going away any time soon,” Challenger asserted.
The Challenger poll also found that nearly two-thirds (64%) of job-seeking managers and executives took new positions at small businesses in the first quarter, up from 50% in the previous quarter.
Meanwhile, the average job search time for jobless managers and executives fell slightly from four months in the fourth quarter of 2003 to 3.9 months in the latest quarter. Additionally, there was a significant increase in the percentage of job seekers winning equivalent or better salaries. In the first quarter, 84% of those finding positions negotiated equivalent or better salaries, up from 78% in the previous quarter.
The poll covered 3,000 discharged managers and executives.