Thursday, 18 October 2012

Sticking with self-employment: the traits that matter

Although I'm largely self-employed, life within an organisation is recent enough that I can recall some of its attractions: regulated income, conscientious support staff, nice equipment. Still, I'm happy as I am, having never once felt the inclination to pack it in and look for a job.  Some of that owes to circumstance - and no little luck - but a recent piece of research suggests there may be important individual characteristics that differentiate those who persist in self-employment from those who leave it.

The study, by Pankaj Patel and Sherry Thatcher, gathers data on a subset of people from the Wisconsin Longitudinal Study, which collected waves of information on a cohort of people who left high school in 1957. Their employment history was coded to note moves into self-employment and the duration it lasted. This was used to model the influence of a number of individual variables, after controlling for a host of factors including income and prestige in jobs (which might unduly tempt individuals to stay in place), family precedents such as a self-employed parent, and so on.

Patel and Thatcher were interested in the Big Five personality traits, as these have been shown to differentiate people in entrepreneurial roles, which form part of the self-employment population. The analysis suggested that  individuals who are more emotionally stable are more likely to enter, and then to persist in, self-employment, as are those who are more open to experience. This pattern, similar to that found in entrepreneurs, is fairly intuitive: confidence and resilience in the first case, and flexibility and problem-solving curiosity in the second, are vital features of the jack-of-all-trades (and crises) that the self-employed need to be. However, while entrepreneurs are more likely to be extraverted, conscientious, and less agreeable (that is, less concerned about people's feelings), none of these factors influenced decisions to start or persist in self-employment.

The team also predicted that aspects of psychological well-being - a set of beliefs about your place in the world - would also matter, specifically those utilitarian ones concerning how we can get ahead in the world. The verdict was mixed: Personal growth, the belief that you are able to learn and grow had no impact on self-employment. Meanwhile, those who believed they could master their environment were more drawn to self-employment but no more likely to persist in it. The only aspect that influenced both entering and persisting in self-employment was autonomy, the belief that independence was important to them.  The study also found that individuals more likely to tenaciously persist with goals and re-frame negative obstacles to see them as still achievable were more likely to continue to go it alone.

The self-employed, then, are marked out by individual qualities, but they don't map neatly onto the entrepreneur model. The study suggests that a sense of independence, curiosity and a tendency not to ruminate help people persevere in this kind of work, along with a goal-focused tenacity. But it seems the field is too diverse to demand extraversion, a highly systematic outlook, or a particular sensitivity to other people. Being your own boss comes in many shapes and sizes.


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