Despite Tough Economic Times Entrepreneurs Are Creating Jobs and Growth
While other businesses struggle to create jobs, entrepreneur led companies expanded their workforce by 16% in 2011. Global job hot spots: Help wanted, a survey of 400 of the world’s leading entrepreneurs released today by Ernst & Young highlights that despite tough economic times, over two thirds of them also expected to hire in 2012. Nor are they temporary or low quality jobs. The majority of the positions require university degrees or substantial experience.
Nearly all of those entrepreneurs surveyed had increased their headcount last year, often by a substantial amount. On average the entrepreneurs surveyed from the Americas grew their headcount in 2011 by an impressive 18%. In Asia-Pacific and Europe the increases were 16% and 12% respectively.
Jim Turley, Chairman and CEO of Ernst & Young says: “With historically high levels of unemployment, especially among young people, there is a pressing need for economic growth. At this time the importance of entrepreneurs, the companies they lead and the jobs they create is even more critical.”
Entrepreneurs recruit an experienced workforce
When entrepreneurs were asked what kind of jobs they created (administrative, entry-level with and without university degrees, or experienced), 81% said they created roles for ‘experienced personnel’, while only 35% said to have recruited at ‘entry level with a degree’ and 29% recruited ‘entry level with no degree’. This trend was most obvious in the US where 92% of the respondents confirmed that they hired at an experience level, followed by Australia, 81%, Canada, 80%, UK, 78% and Ireland 76%.
Entrepreneurs anticipate growth and are recruiting now
Sixty-eight percent of the entrepreneurs surveyed anticipate increasing their workforce in the country where their company is headquartered in 2012. When asked for more details about their recruitment strategies, entrepreneurs confirmed that ‘growth in their product and service markets’ was the main reason for expanding their headcount followed by ‘technological and innovation improvements’.
Forty-four percent also expect to increase their workforce outside of their headquarters country. When asked to name the countries where they anticipated creating the most jobs – the US, China, the UK and India were the most popular destinations. When asked why they were recruiting outside their national market in 2012, 74% of entrepreneurs confirmed this was in order to help them enter new markets. Only 14% said they were recruiting internationally to ‘take advantage of lower labor costs’ and only 8% said they wanted to benefit from ‘better government incentives’ in other countries.
Maria Pinelli, Global Vice-Chair for Strategic Growth Markets at Ernst & Young explains: “Whether at home or abroad, in good economic times or bad, entrepreneurs are constantly looking for new opportunities to expand their business and services. Despite an uncertain global economy, entrepreneurs are actively looking to recruit high-qualified and experienced staff.”
Factors that may affect 2012 recruitment plans
When the entrepreneurs were asked which factors in their domestic market could potentially impact their bullish 2012 hiring plans, government policies (23%) and a negative regulatory climate (16%) came on top. Concludes Maria: “With just a few regulatory changes could greatly improve entrepreneurs’ access to funding, which would make even more of an impact on job and wealth creation. Governments worldwide, led by the G20, should really appreciate entrepreneurs for what they are – an engine for growth.”