People Find Better Job Security In Self-Employment
By Kevin Smith© Pasadena Star-News, Sunday, October 23, 2004
The rising trend of outsourcing U.S. jobs to low-wage countries is prompting more people to seek self-employment, according to The Entrepreneur's Source, a business consulting firm.
Tracy Kurzy, who owns the company's Monrovia franchise, said people view self-employment as a more secure alternative to the corporate world - a world that has been rocked by outsourcing, downsizing, mergers and acquisitions and financial scandals.
"I see a lot of people who have been displaced from their positions," she said. "People are tired of seeing their co-workers laid off ... and they are fearful for their own jobs."
And things aren't expected to get any better.
During the next 15 years, more than 3 million technology and call-center service jobs worth $136 billion in wages are expected to move to such far-flung locales as India, Russia and China, according to a recent study b y Forrester Research.
"This is proof positive that corporate America does not offer job security," Kurzy said, noting that during a time of zero job growth, the franchise sector saw an 8-percent boom.
John Duenas, 43, of La Habra is a prime example. Duenas had worked as a store manager for Longs Drugs, but opted to strike out on his own two years ago when he bought a franchise of Servpro, a cleanup and restoration company that revamps businesses and homes that have been damaged by fire and mold.
"I just knew a lot of different people who had been laid off because of corporate downsizing, and a lot of them had no heads-up that it was coming," said Duenas, who made his career transition with the help of The Entrepreneur's Source. "I felt it was too vulnerable a position to be in when you have a family."
Duenas, whose wife still works for Longs Drugs, now runs Servpro of La Habra/West Fullerton.
"In the old days, when you worked for a company - come hell or high water - everything was taken care of," he said. "Now there's a lot of anxiety and uncertainty in the corporate world. If it's a publicly traded company it could be, Boom, we're downsizing,' or We're going in another direction' and your position might not be required anymore."
Gary Kaplan, president of Gary Kaplan & Associates, a global executive search firm based in Pasadena, said the trend of self-employment is picking up among high-level executives, too.
"It's not just outsourcing - it's a variety of issues that have been going on for a while," Kaplan said. "There is an absolute reality now for professionals in the executive ranks that says we are increasingly becoming more of a mercenary work force."
Many employees have been impacted by mergers, consolidations and the subsequent layoffs that occurred in the wake of those actions, he said.
"It's interesting because I'm finding people who have been remarkably successful, but are still looking to do their own thing," he said.
And some are well positioned to do so, according to Kaplan.
"If you are a high-level executive who's been let go with a substantial (severance) package, you might look into buying a company," he said. "I recently spoke to someone who was a senior-level guy at IBM. He left them because they sold off the business he was in. Before that he was an executive at PricewaterhouseCoopers, and now he's seriously considering that his next step will be to become an executive recruiter because he's built up a strong base of contacts."
Kaplan acknowledged, however, that some are reluctant to make the leap because of possible failure and the effect that might have on their chances of returning to the mainstream work force.
Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., said the high costs associated with doing business in California have prompted many companies to move some or all of their operations out of state or to other countries where worker wages and costs are lower.
"It's expensive to hire someone in California and this is one of the reasons behind the push to go offshore," he said. "If you run a business, you're under a lot of competitive pressure and have to keep your costs down."
Kyser said the trend of self-employment more widespread than most statistics reveal.
Many people in the film industry are self-employed and working as independent contractors as they jump from one project to another. And independent truckers and some entrepreneurs who run software development firms also are self-employed and not counted in labor statistics, he said.
"They don't get captured in the employment stats," Kyser said. "There are easily about 500,000 more people working in L.A. County than the data gives us credit for."
A study released earlier this year by the International Franchise Association Educational Foundation said franchised businesses generate jobs for more than 18 million Americans and account for 9.5 percent of the private-sector economic output.
"A payroll job is a risky, less flexible proposition in today's business climate," Kurzy said. "Entrepreneurship has always been the true American dream because it allows business owners to take control of their careers and their lives."
The Entrepreneur's Source of Monrovia is part of an international network of self-employment coaches who work with individuals and companies looking for successful opportunities for business ownership and expansion.
