Millennials embrace self-employment; not micromanagement. by Dr. Tomas Chamorro-Premuzic via @FastCompany

Why Millennials Want To Work For Themselves

Or do they? Millennials want to work on their own terms—without a bad boss micromanaging their every move.

In the 15 years I’ve been teaching MBA students, their career plans have changed dramatically. Until the early 2000s they aspired to work in traditional corporate jobs for companies like Deloitte, JPMorgan, and GE. After that, the top destinations became tech giants such as Apple, Google, and Facebook.

In the past few years; however, a new favorite career choice has emerged, which eclipses any other form of traditional employment—working for themselves or launching their own business.

This is consistent with data highlighting the global rise in self-employment and startup activity. According to World Bank data, 30% of the global population may be working for themselves, and even strong economies—where job opportunities abound—are experiencing an increase in self-employment rates. Furthermore, this pattern will only be exacerbated in the near future, when more millennials leave college to enter the job market, and when those currently in employment give up working for someone else.

Although millennials are expected to make up 75% of the workforce by 2025, a significant number will never be employees in the traditional sense. Turnover figures for millennials are already twice as high as for other generations, with millennials rarely staying on the job for more than three years. Millennials are also more likely to work for themselves.

So, what explains all of this?

Millennials Are More Likely Than Other Generations To Value Freedom and Work-Life Balance

Why? It is not that millennials are inherently attracted to more harmonious living conditions, or a better quality of life. Rather, they are more self-centered and independent, which makes it harder for them to follow rules.

Jean Twenge, professor of psychology at San Diego State University, surveyed more than a million millennials, and found that self-importance, self-esteem, and narcissism have been on the rise for the past five decades. Clearly, this is having an effect on employment preferences—working for yourself is the easiest way to avoid having a boss, and not having a boss is particularly appealing if you value freedom and independence.

That said, people who launch their own business or work for themselves end up working more hours and earning less on average. If your goal is to improve your work-life balance, then you should think twice before quitting a full-time job or starting a company.

Millennials Tend To Underestimate the Difficulties Associated With Entrepreneurship

On the one hand, they think Steve Jobs and Mark Zuckerberg can easily be emulated, as if hating college or being a misfit guarantees entrepreneurial success. This ignores the extraordinary talent and work ethic that characterizes mega-successful entrepreneurs, who are a freak of nature and statistical exception in the first place.

On the other hand, millennials are more prone than other generations to overestimate their own talents. Although most people are overconfident, millennials are even more self-deceived about their abilities than other people are. They especially overrate their creative talents, which leads them to interpret their own ordinary ideas as disruptive and innovative.

Although society does benefit from growing entrepreneurial activity, millennials themselves would suffer less, and be less disappointed if we educate them about the minute probabilities of being a successful entrepreneur, particularly when they are neither very talented nor hard-working. This can be done by providing honest and critical feedback on their potential.

Tech Giants Are Now Seen as Greedy, Corporate, and Non-Creative—So They Are No Longer An Appealing Employment Prospect

This is ironic given that most of these young companies were once perceived as creative, philanthropic, and anti-establishment, but it took less than two decades for them to acquire the same reputation that investment banks developed in almost a century.

Employers can learn a big lesson here: if they want to attract millennials, they must present themselves as innovative and successful without seeming greedy. Trust matters to everyone but since these young tech firms have grown rich primarily by productizing millennials, many of them feel betrayed now. Time will tell if Google, Facebook, and Amazon can recover their early reputation, or whether their place will be taken by a new generation of companies that understand and connect to generation Y.

In short, it is not so much that millennials want to work for themselves—they simply don't want to work for others who are too demanding or constraining. Millennials want to feel creative, and they need achievements that can match their self-perceived potential. Self-employment is just a coping strategy for avoiding boring or tedious work; and a shot at fulfilling somewhat grandiose aspirations. There is compelling evidence for the fact that older generations are also ditching traditional jobs to go freelance, enter self-employment, or launch their own business.

The No. 1 reason for this is that they have been traumatized by previous experiences with bosses. We call them "necessity entrepreneurs" but only because they have the necessity to avoid incompetent bosses. One cannot blame millennials for trying to do the same.

Dr. Tomas Chamorro-Premuzic is an international authority in psychological profiling, consumer analytics, and talent management. He is a professor of business psychology at University College London, vice president of research and innovation at Hogan Assessments, and has previously taught at New York University and the London School of Economics.

[Image courtesy of ITU/Rowan Farrell via Flickr user itupictures]

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  • I thought this was a good piece but as a millennial myself, I don't necessarily think many of us pursuing the entrepreneurial is necessarily because of not wanting to sit in an office for 50 hours. The one thing I do wish the author addressed is the statistics of those who started their businesses due to the overwhelming demands of the job market. Even though our job market has stagnantly progressed at the end of the day it's still a buyers market. Allow me to speak from experience. I graduated in 2011 with a Business Management degree with an impressive resume. For the last 2 to 3 years I have been working but not necessarily where I want to be. The real driver for me taking the entrepreneurial path was how a lot of the interviews made me feel. It wasn't just what was addressed in the article, it was the lack of respect I got on a lot of interviews and the glimpse of many cultures I did not want to be a part of.

  • damesm10

    As a millennial + entrepreneur I am baffled by some of the conclusions that are drawn by Dr. Chamorro-Premuzic. The road to being a successful entrepreneur, especially when coupled with student debt, is anything but a joyride. The real joy comes from knowing that the hard work and hours dedicated to your project is to build your dream and not the dream of another company or individual. I can guarantee that it is not because working for someone else is "too demanding or constraining."

    It isn't anyone's place to "educate" someone else that they are "not very talented." I would bet that many successful entrepreneurs and people were told that and went on to do great things. I can vouch for the fact that when you are doing something you love you are not "suffering."

  • wisteriacats

    One thing not mentioned is that Millennials, unless an engineer or computer programmer, make a much lower income out of college.

    Secondly, they have been jaded by college. College does not teach skills. There are very few classes with actual skill sets that are applicable to any work force.

    Third, if a Millennial has the drive, ambition and logic to create their own company - no matter what field (not all kids are going into high tech), then they are hedging their bets against themselves. That is not Narcissism, that is survival. Many are living at home with their parents, or spending a bulk of their income from a "job" on rent.

    When comparing the income of a "job" to the income of a company of your own - be it online, brick & mortar, selling your own product to others, there is a chance that your income will be higher than a "job." I commend Millennials who start their own businesses. It is smart to at least try to be your own boss.

  • Sascha Rado

    Apart from a couple of misplaced comments and conclusions, I think the article is a start to understand patterns and trends happening in modern day society.

    Companies have to be more aware of decisions people make and make workplaces more creative and rewarding.

    Whether or not we think we are creative and our ideas are unique doesnt matter. What finally matters are the thoughts, feelings, decisions and actions, as they have a real effect on the situation.

    So my recommendation would be to not mix the investigated matter with your own interpretations (creative or not) of people's capacities and motivations.

    Great subject though. Keep the good work up.

  • there is less fear of having a go, young successful entrepreneurs have lit the flame that spurs others to strive and dare to challenge the status quo and ask why?

  • As a millennial, I feel convicted by half this article, though the other half seems inaccurate. Most of my peers who started their own businesses do work fewer hours and make a lot more money than I do, and I am a manager in a mid-sized organization.

    It feels ironic when older generations accuse us of being more selfish because that's how we feel about our current leaders. We don't want to spend 50 hours in an office where 10 of them are spent achieving the mission of the organization, 20 is wasted, and 20 is spent keeping our selfish bosses happy. We are happy to subject ourselves to data and consensus, but the typical workplace is still dominated by authoritative, closed-minded, my-way-or-the-highway managers who are afraid of change. The challenges we currently face, and the astronomical ones we will face thanks to the selfish generations before us, are too great for us to sit in offices becoming jaded in our twenties.

  • Dr. Chamorro-Premuzic states "one cannot blame millennials for trying" to find a different course of action than the generations preceding them. And yet, it feels as though the entire article attempts to do just that - blame millennials for their misguided, overconfident approach to work. He scoffs at millennials who want to "avoid boring and tedious work," "demanding, constraining, or micromanaging bosses," and try to create a life where they "feel creative" and achieve something. But truly - who WANTS that for themselves?! In his discussion of work-life balance, he advises millennials to think twice before leaving a full-time job, while entirely missing the point that millennials often seek a work-life balance PRECISELY because those things which bring them happiness and fulfillment are not in the miserable workplace he has just described. Overconfidence may be on the rise, but this is one author who misses the nuances and uses that as a crutch for all of his arguments.

  • How about instead of telling millennials what's wrong with them, we try educating them in becoming successful entrepreneurs? It's easy to break people down. It's a challenge to provide a solution.

    Stop feeding into the problem and start becoming a mentor, a guide, and a role model that millennials can look up to. Every generation has their flaws. The baby boomers weren't perfect. For some reason though, baby boomers just love to pick on the younger generations. Perhaps that is part of the problem.

    I say let the 20 something's try their hand in entrepreneurship. What's the worst that can happen? They fail and grow from it. All the successful people in business failed once or twice in their careers. Being a successful entrepreneur is more than half about timing, anyway. They might, just might be the next big thing.

    Who are we to judge?

  • donnabgordon

    As a Gen Yer I once chafed at the sweeping 'slacker generation' label and such that so often prevailed until the Millennials came along and became the new favorite topic to complain about. Yes, there are some prevailing attitudes and habits, but each generation comes with good and bad baggage. I graduated with my undergrad with grandiose ambitions, which were dashed on the rocks of real life in my 20's. It's called paying your dues. The difference was that other than grousing about our crummy jobs and unappreciated contributions over a beer with a few friends, we didn't have the social media outlets and connectedness of this generation. By reading all of this commentary, and commiserating with fellow disgruntled 20 somethings on a mass scale, the interpretation is that We Have A Problem. Each generation has the same gripes. Millennials have many soapboxes from which to voice their concerns which makes their gripes seem somehow more legitimate.

  • Bri Mueller

    Have you ever considered that Millennials are starting their own jobs because of how biased our culture is towards them? I'm a cusp Gen Y/Millenial (depending on who you talk to) and the reason why I personally want to own my own business is because all of the managers I've ever worked with across most industries (service, hospitality, manufacturing, tech) don't value their young employees.

    My generation is frequently looked down on, talked down to and sometimes flat out ignored in the work place. Micromanaging does suck, however feeling disenfranchised and devalued by management is a bigger problem - it directly affects your motivation to be a productivity and feelings of self-worth. It's systemic in the corporate work culture and it most likely won't change any time soon. If articles like this would stop calling us self-centered, ignorant and lazy, maybe we'd be more willing to work for you instead of feeling the need to create our own work culture that is more accepting and open.

  • Lets address the real issue Doc..After paying for a bachelor's degree and then some, companies think it's completely normal to pay people in dirt despite the costs of living and then force them to work over 10 hours a day without a lunch break (Illegal, I know. Newsflash: It still happens), and as a final punch to the gut, give them work that is so ridiculously trivial, a kid in 8th grade could complete it. You wonder why we are lazy? We burnt out that first year trying eagerly to impress and please everyone at the company only to be met with no bonus at the end of the year and no sense of appreciation. I don't need a ticker tape parade, but a simple 'thank you' would be nice as opposed to a Neanderthal grunt. I have no idea who the millennials are that you've met, but I work harder than most of the adults I've met and have absolutely nothing to show for it, but resentment. Why wouldn't I want to work for myself? At least, I'd feel valued again and the money would be mine.

  • Just another hack trying to get their 15 min of fame. This type of crap has been spread since before Gen Y could drive mopeds. Sad that some businesses believe this junk and are suffering with Gen Y because of it.

    Let me ask the author these two questions:

    1)Considering that the economy tanked shortly after Millennials were starting out their career, did it ever occur to the writer that becoming and entrepreneur and Millennials wanting to start their own business was out of necessity, considering that for many, the alternative was unemployment and large student loans?

    2)If you raise a generation to be ambitious, tell them that starting and running your own business is the key to success, have them study great entrepreneurs who started from nothing and became huge successes, that being a business owner and entrepreneur was the American dream, why would you be surprised then that with high numbers of college graduates, they would want to start their own business?

  • Alexey V. Sunly

    Yada, yada, how about this Dr, why don't you publish a study of social inequality and economic exploitation prevalent in capitalist economies, and maybe realize the we don't want to be your little patsies. Loser.

  • I understand that point of view but I also know many people in their 40's and 50's without that drive. I've experienced people my age going to miserable jobs to support their families because of the recess and because their parents felt too good for certain jobs.

    No matter the period someone was born, there will always exist people who fight and mediocre people. What upsets me about this prejudices about certain generations, specially mine, is that older individuals in companies will believe it is ok to pay terribly and explore young adults with 14hours a day for a contract that only lasts a year until they find someone else, ad infinitum. Also, this will make them think it is ok to treat someone without respect just because someone is younger and with less experience. I was raised to respect everyone no matter their age and background. Generalizations like this aren't helping. What would help is to give a good example. Starting with an open mind.

  • katie

    I love this line: "Self-employment is just a coping strategy for avoiding boring or tedious work; and a shot at fulfilling somewhat grandiose aspirations." YES! As a millennial who has held various jobs...and is trying to work for myself...and is extremely successful (so far, at least), I would say that the future I most hope for is engaging, projects-based work. If I found a company that I trusted, that trusted me, and that really walked the walk in innovation and energy, then I would absolutely be there.

    For now, I'm happy looking at a near-future that involves a lot of hustle, a certain amount of narcissism (no apologies!), and a high emphasis on freedom. I work really hard. I'm happy to work hard for others. As of now (at least in employment), I haven't found anyone better to work for than myself.

  • katie

    I love this line: "Self-employment is just a coping strategy for avoiding boring or tedious work; and a shot at fulfilling somewhat grandiose aspirations." YES! As a millennial who has held various jobs...and is trying to work for myself...and is extremely successful (so far, at least), I would say that the future I most hope for is engaging, projects-based work. If I found a company that I trusted, that trusted me, and that really walked the walk in innovation and energy, then I would absolutely be there.

    For now, I'm happy looking at a near-future that involves a lot of hustle, a certain amount of narcissism (no apologies!), and a high emphasis on freedom. I work really hard. I'm happy to work hard for others. As of now (in employment, anyway), I haven't found anyone better to work for than myself.

  • the thing about "millennials"--at least the ones i know, have worked with or managed--isn't that they're lazy, per se, it's that they lack the hustle. they just don't have it and don't get it. awesome that they want the 'freedom' to work for themselves, but they don't have the, i'm gonna get up every day and hustle my ass off, make calls, hit the bricks and get it done. every day. because i only eat what i kill and i'm driven by something other than not wanting a boss. the ones i know/have known just don't have that.

    i get why people get their panties in a bunch when millennials are characterized as narcissistic, but it's not just about selfies and social media. in the workplace, the way it manifests is more like, "i have an opinion about how things should go around here, and if you don't listen to me and change things accordingly i'm, butthurt and disgruntled. i know stuff and my opinion trumps your experience." (even though i've been in the workplace for like 5 mins.) yeah.