Companies competing for smart, skilled workers have done well in the past to observe Sun Tzu’s battlefield dictum, “Know thine enemy.” If one firm dangles bonuses, better hours or share-purchase programs, those down the street are faced with a choice: respond in kind, or risk a crippling round of defections—starting with the innovative, energetic people they need most to stay on the competitive vanguard. But what happens when the enemy lurks unseen, in the dreams and ambitions of the workers themselves?
It’s a relevant question because these days a lot of Canadians see a brighter future in self-employment than in signing on with the bluest of blue-chip companies. As of last June, fully 500,000 were in the process of starting their own firms, a level indicative, says a CIBC report, of “a strong culture of individualism and self-betterment.” Fully 80 per cent of the new entrepreneurs are believed to have chosen the rocky path of self-employment, notes Benjamin Tal, author of the CIBC study, which sets them apart from the waves of laid-off workers who hung out shingles during bygone recessions. They’re also older, and better educated: one in three has a university degree, compared to just 15 per cent of new business owners in the early 1990s, and almost 30 per cent are over the age of 49.
“Many of these people have spent years working in large companies,” says Tal. “They have an understanding of the business environment, the connections they need and some money in reserve. Their likelihood of success is much higher.”
An obvious explanation for the shift lies in the flexibility offered by self-employment—a valued perk in an era of dual-income households. “I might be putting in as many hours as anyone, but they’re the hours I choose,” says Kate Bonnycastle, a Halifax-area copywriter who went independent in 2006 after years of working in-house at major firms. “I can work at night, I can work early in the morning. I can run out and drop stuff off for my kids at school in the middle of the afternoon.”
But work-life balance is only part of the picture. Technology and the economy’s march toward specialization has rewarded people willing to provide narrowly defined services to a select list of clients. The result, say economists, has been an increasing symbiosis between big global firms and entrepreneurs: instead of hiring the talented workers on a permanent basis, the giants build business-to-business relationships with them, contracting their services when needed, in some cases keeping them on retainer. The arrangement can work as well for the upstart as it does for the corporate giant. Bonnycastle, for one, boasts a list of blue-chip clients that has included McDonald’s, Vancity Group and Bell Canada. “I think I’m the future,” says the 44-year-old. “All companies have their ebbs and flows, but because I work for several clients, I have year-round work.”
Linda Duxbury, a professor at Carleton University’s Sprott School of Business, agrees that the new reality can be liberating to the gifted and ambitious (though studies suggest they work just as many hours as employees with equivalent skills). It’s large firms and institutions, she warns, who might regret the implications, because their need for brains is as urgent as their need to keep a lid on labour costs. “These people starting their own businesses are also the ones employers are going to really want to hire,” explains Duxbury, who studies changes in Canada’s labour force and workplaces. “It leads to a situation I call ‘jobs without people and people without jobs.’ We’re going to have a shortage of people at the talent end, and an oversupply of people with no skills that the market needs.”
The best employers, of course, still have their pick of bright applicants. And few on the Maclean’s honour list worry about the siren call of self-employment stealing their stars. David Clarkson, vice-president of strategy and planning for Cisco Canada, says the company boasts a minuscule one per cent annual turnover rate—that is, employees who choose to leave. Still, he says, the company works hard to avoid the atmosphere of a faceless corporation where innovation is underappreciated. “Cisco is a culture of cowboys, where being disruptive is viewed as a positive thing,” Clarkson says. “People do try to correct things that are wrong, and I think as a company you should not be punishing that.”
Some firms, notes CIBC’s Tal, have gone so far as to encourage employees to start up new business units under their corporate umbrellas, replicating the decision-making latitude and reward structure of an independent business, complete with bonuses and profit sharing. That might not be enough to keep, say, a Steve Jobs from bolting from Atari in pursuit of his own grand visions. But it’s a sign, at least, that a new reality is starting to sink in. In an economy that rewards independence and ingenuity, the greatest competition for human talent might not come from the firm down the street. It might well come from the talent itself.