Increased global confidence boosts entrepreneurs' hiring plans, says EY survey
Seventy six per cent of the world's top entrepreneurs plan to increase the size of their workforce in the year ahead by an average of 19 per cent, largely driven by growing global demand for goods and services and technological advances.
That’s according to the third EY Global Job Creation Survey of nearly 250 EY World Entrepreneur of the Year (WEOY) finalists since 2000, released to coincide with the WEOY Awards 2014, taking place this week in Monaco.
When compared with CEOs of large corporates, entrepreneurs are taking a more active role in global job creation according to a recent EY study, the EY Capital confidence barometer. In this, only 31 per cent of CEO's surveyed said they intend to hire in the next year, with the analysis suggesting this reticence is driven by geopolitical concerns and cost cutting pressure from activist shareholders.
In contrast, respondents to the Global Job Creation Survey say the main driver for hiring at home (selected by 88 per cent) is a desire to make the most of a growing market for goods and services – with 61 per cent of entrepreneurs confident in their home market's prospects. The second biggest driver of employment is the improvements that technology and innovation have brought to companies.
Maria Pinelli, EY's global vice chair, strategic growth markets, says: "The results of our annual survey relay a consistent message – that entrepreneurs, as key drivers of innovation in the global economy, are job creators and are far less risk averse when it comes to employing new people than CEOs of larger companies."
Technology has emerged as a key driver of job creation among entrepreneurs, with over half (51 per cent) agreeing that investments made in technology have changed their workforce, with eight in 10 of these (81 per cent) saying it has led them to hire. The survey shows that this is driven by the increased cost competitiveness technology brings (53 per cent), and by technology and mobile working opening up a greater and more skilled pool of workers, with 55 per cent of entrepreneurs planning to hire from outside of their country – compared to 44 per cent in the previous two years.
Pinelli says: "Far from technology reducing jobs, there is every indication it is creating employment opportunities within entrepreneurial companies, as entrepreneurs take advantage of strong economic fundamentals and increased efficiency to invest in their businesses.
"Entrepreneurs are increasingly global in their outlook and are exploiting the opportunities that technology brings them to tap the global talent pool and address skills shortages in their home market this way. This is in large part due to technology enabling mobile working, something that, according to our survey, women entrepreneurs are especially likely to see as a significant trend."
When looking at who was hired by entrepreneurs in 2013, there has been a shift towards hiring at the entry level. Fewer "experienced non-management" were hired in 2013 than in 2011 or 2012, while jobs at the entry level, especially those requiring a degree or advanced degrees were up on the last two years. Entry level roles that don't require a degree held steady.
"Entrepreneurs have a key role to play in driving global economic growth and job creation thanks to their dynamism, nimbleness and ability to spot opportunities for growth. This survey shows they're living up to expectations. Not only do seven in 10 entrepreneurs plan to hire, but many say they will do so abroad in order to grow their markets, showing the global mindset of an entrepreneur. Encouragingly, many are seeking entry level employees, something which bodes well for the world's youth, both skilled and unskilled," adds Pinelli.
Confidence in the global economy is strong, with 47 per cent confident, very or extremely confident and 46 per cent somewhat confident. Entrepreneurs in EMEIA are the most confident about the global economy (with 63 per cent confident, very or extremely confident), and are also the most likely to tap into the global workforce, with 65 per cent saying they'll hire from overseas, compared with 53 per cent in the Americas, 33 per cent in Asia-Pacific and 52 per cent globally. Meanwhile, Entrepreneurs in Asia-Pacific are keenest to hire in order to expand into overseas markets (58 per cent), followed by EMEIA (54 per cent) and the US (46 per cent).
"As the global economic recovery takes hold, entrepreneurs from all regions are looking to hire. In EMEIA there appears a real appetite to tap into skills available overseas, perhaps in response to skills shortages at home. This and the ease of hiring globally is something for governments in the region to consider if they are to stay ahead of the global race for talent," says Pinelli.
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