Startup Optimism Rises--But Hiring Plans Slow


Eighty-four percent of entrepreneurs expressed confidence in their companies’ prospects for profitability in the first-quarter 2013 Kauffman/LegalZoom Startup Confidence Index, released today by the Ewing Marion Kauffman Foundation and LegalZoom. That was a one percent increase since the 4th quarter of 2012.

However, the survey of 1,650 LegalZoom customers who formed businesses entities in the past 12 months reveals another noteworthy trend. The number of entrepreneurs planning to hire dipped from 37% in the fourth quarter of 2012 to 32% in 2013.

The average job seeker is probably looking to larger organizations, and not startups, for jobs, but it’s important to keep an eye on findings like this.

While the national employment market has improved a little recently, a lot of companies still don’t want to add traditional full-time jobs, or can’t afford to. The area where we’re seeing very fast hiring growth is in contingent work.

IQ Index, which tracks the contingent labor market, found that pay rates for contingent workers ticked up in the first quarter of 2013, thanks to strong demand. The market intelligence firm noted that of the half a million new jobs created across the country in that period, 11% were in contingent roles. The rates of using temporary labor have returned to levels not seen since 2006, before the recession, according to its research.

If this trend continues, we’re going to have to do a lot of planning, both as individuals and on a policy level. Right now, most people try to build careers in traditional jobs, where they are employees. When they say they’re out of work, they mean they can’t find a permanent job with benefits. They don’t really look at freelancing or business ownership as an option. It’s seen as a stop-gap, not a long-term career.

But being employed in the future may mean patching together an ever-changing bunch of projects to earn a decent income–and paying healthcare costs out of this.

Few people plan for this possibility, and government policies don’t reflect it.  I wish they would.  Like it or not, many who want to stay active in their careers are likely to find themselves surfing sites like LegalZoom in the future, looking to create a business that will keep them employed.