It’s Not Just Full Time Jobs That Matter
The recent reports about jobs raises a question about how entrepreneurial businesses actually grow. Traditionally, policy-makers, academic researchers, entrepreneurs and governments measure the number of full time jobs created as the single most important mark of economic growth. Clearly when companies increase the number of full time employees, this translates into an impact on many other parts of the economy.
But today, the work environment is different. We work electronically, temporarily, part time or on contract. It is not uncommon for recent college graduates, retirees, or others to have several part time jobs, or “gigs”. There are some estimates that have as many as one in three people employed part time, free lancing, on contract or with another temporary type job.
From the perspective of the growing entrepreneurial company, it is expensive to hire full time employees in part due to benefits and other costs. More often than not, entrepreneurial companies use a combination of work contracts. I recently taught in the Goldman Sachs 10,000 Small Business Program. This program identifies growing businesses around the US, where BabsonCollege and Community College faculty work with entrepreneurs who are established (sales from $250,000 to millions), providing training and support to help them grow their businesses. The businesses range from basic manufacturing, retail and services to high tech.
What I observed is that nearly all the businesses had a variety of types of workers, contract, part time, full time, temporary, and that their growth plans included bringing on board more workers in nearly all these categories. In other words, growth into new products/services and markets was made possible by different categories of workers, not just full time employees.
Another data point is what I see as a member of a local angel group, Boston Harbor Angels. These businesses are all early stage, and most are in health care/bioscience, computer technology and software. Similar to what I saw in the 10,000 small business program, these fledgling high tech ventures are also growing by adding workers in all categories.
My conclusion is that we may need to take a more careful look at how work actually gets done in growing companies. If we measure only full time employee growth, we may be missing a good part of the story.