It feels that not a day goes by when there isn’t another news headline or report warning about to forthcoming ‘tsunami of job losses.’ The National Institute of Economic and Social Research has predicted when the furlough scheme ends in October, it will make 1.2million Brits unemployed by Christmas, with unemployment rising to 10 per cent.
Any company planning to make 20 or more staff redundant have to notify the government by filing a form called an HR1 Advance Notice of Redundancy. A Freedom of Information request illustrated that in June 1,778 firms said were intending to cut more than 139,000 jobs in England, Wales and Scotland. Compare this to June 2019, when only 345 firms had plans to cut 24,000 jobs.
The problem is exasperated by the fact that these redundant workers are facing a jobless market. Statistics show that workers who have been made redundant go on to a job on a lower salary. However, these are not normal times. Companies are receiving thousands of applications for jobs which would only have attracted a handful of applicants before the coronavirus pandemic.
Different times require new thinking. When life gives you lemons, why not consider making lemonade? A recent study found that 64% of the UK workforce wants to set up a business. Direct Line issued a fascinating report on the rise of the ‘redundant-preneurs.’ It outlined that 13 million working adults have been made redundant at some point in their careers. Interestingly, more than a third of workers who have been made redundant used the experience as an opportunity to start working for themselves.
Running your own business brings its own challenges but it also delivers many benefits. It gives you the opportunity to work on something that you love and are passionate about, you will be free to arrange your priorities and outcomes and you are able to build multiple valuable relations with your team and customers.
You will be in charge of your own future, and financially self-reliant sustaining a stable source of income for you and your family.
Most importantly, instead of looking for another job, you can actually start creating jobs, you will be actually contributing positively to the economy.
The option to take charge of your future, by building it yourself, certainly sounds like an attractive proposition. But just how realistic is this, especially in this current climate when we have just hit recession?
While it may sound counter-productive, times of recession and economic downturns can be a time of great opportunity for those with the desire to start a new business; the market and customer needs are changing rapidly, and this can mean new business opportunities for entrepreneurs from freelancing careers to creating the next big thing. For example, Microsoft was started during the oil embargo in 1973, CNN was launched during the 1980s American recession. The email software Mailchimp was launched during the dot com recession. Netflix was also developed during the dot com crisis. The great recession in 2007 was the motive behind creating lots of growth startups such as Uber, Airbnb, Square, and Groupon.
While small businesses can be hit hard by recessions there can still be opportunity. The great recession in 2008 was seen as the catalyst for the growth of the gig economy. Britain’s booming gig economy now accounts for 4.7 million workers and the total US freelancing income is almost $1 trillion. It is projected that by 2023, 52% of the US workforce will either be gig economy workers or have worked independently at some point in their career. We predict that this number might even be higher after Covid19.
We are also starting to see new businesses launched during the last couple of months as a result of the Corona Pandemic. Aerosol Shield a company founded in a UK by a couple working the medical sector, created a transparent plastic sheeting attached to a plastic frame to take advantage of the spike in the mask business globally. ClearWater Hygiene, a business producing high-grade hand sanitizer aimed at frontline workers and the wider public founded only a few months ago is set to make 30 million.
Another great example is the RiseSmart success story. RiseSmart was founded in 2006 by Sanjay Sathe after being laid off from his position as vice president of Enterprise Data Management for a division of Sabre Holdings. Reminding us that good things can come out of hardship.
Opportunity often comes disguised in the form of misfortune, or temporary defeat, said Sathe I was given the services of a traditional outplacement company, it took me a couple of weeks to get an appointment, then I drove 45 miles and sat in the lobby for a while before someone took me into a conference room and gave me a big spiel about my life. They gave me a binder and told me to come for a class the next day. When I got out the first thing that came to mind is that these folks are living in the stone age. The world has changed, the way we look at job search has changed.
From his redundancy experience he got the idea to create what he describes as an eHarmony in the job space. RiseSmart was a huge success; it raised $27 million in venture capital and was acquired in 2015 by Randstad Holding NV, for $100 million.
Without underplaying the impact, being laid-off can be devastating but it can also offer an opportunity to seize a moment of change that can put you in control of your future. It’s not for everyone, but for those that have the desire to start their own businesses and take a different direction, this could be the time to make that leap. Being open to the market gaps generated by the recession could be your window for success or even finding a new angle to take advantage of the gig-economy.
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