Small Business Labs

Gen Y Independents Non-Profit Oriented

We posted the article Gen Y Independents: Socially Oriented and Serving Non-Profits over at MBO Partners blog.

The article covers one of the more interesting statistics from MBO Partners State of Independence Study, which is 22% of Gen Y (born 1980 to 2000) independent workers (freelancers, temps, etc.) reported that the primary market they served is non-profits.

This is substantially higher than any other age group.  On average a bit less than 5% of older respondents reported that non-profits were their primary market.

A number of studies have shown that Gen Yers are more socially oriented than older generations, so we weren't completely surprised by this finding.  But we were surprised just how the strong the difference is between Gen Y and the other age cohorts.  Head over to MBO's site for more on the social orientation of Gen Y.  

Speaking of the State of Independence Study, we've just kicked off year 2 and one of our focus areas is Gen Y.  So in a few months we'll have a lot more to say about this entrepreneurial and socially oriented generation.

Grim Job Market Continues for Young Americans

Although the overall labor market continues to improve, there isn't a lot of good job news for young Americans.  The Economic Policy Institute's The Class of 2012 lays out how the job situation is for those 25 and younger.

The key data is the current unemployment rate for workers under the age of 25 is 16.4%.  A couple of other data points of interest are:

• For high school grads under 25 the unemployment rate is 31%
• For college grads under 25 the unemployment rate is 9.4%

Useful data for parents trying to show the value of a college education to their kids.  But even for college grads, the numbers aren't pretty.

The chart below shows the unemployment rate and the underemployment rate for college grads. The underemployment rates includes unemployed workers plus those who are working part time but want full-time work (“involuntary” part-timers), and those who want a job but have given up looking.  

    

This chart actually understates the problem because it doesn't include data on college grads that are working in jobs they are over qualified for.  Data on this is hard to come by, but the report cites a study saying close to 40% of young college grads are in jobs that don't require a college degree.

Wages for high school and college grads have also taken hit.  Between 2000 and 2011 real wages for high school workers under age 25 fell by 11.1%.  For college grads the decline was 5.4%.

The grim job market is a key reason more young Americans are pursuing work as independents (temps, freelancers, etc.).  

In our work on the MBO Partners State of Independence study we found about 2 million Gen Yers (born 1980 to 2000) work at least 15 hours per week as independent workers.  We expect to see these numbers to continue to grow.

Millennial Myths

Good article in Strategy and Business on 5 Millennial Myths.  According to research by the authors, "stereotypes of millennials in the workplace are inconsistent at best and destructive at worst".

Instead of the common view that Milennials (also called Gen Y, born roughly 1980 - 2000) are needy, lazy and not committed, the article argues that in terms of work Millennials are not that different than older Gen Xers and baby boomers.

This is very similar to what we've found in our research.  

The 5 myths presented are:

1.  Millennials don’t want to be told what to do.
2.  Millennials lack organizational loyalty
3.  Millennials aren’t interested in their work.
4.  Millennials are motivated by perks and high pay.
5.  Millennials want more work–life balance.

Please go to the article for the reasons the author gives for these being myths and what their resaerch shows true picture to be.

Gen Y, Women Connected

Nielsen's State of the Media: U.S. Digital Consumer Report, Q3-Q4 2011 (free, registration required) describes in detailed the digital connectedness of Gen Y, which they describe as 18-34 year olds.

None of the data is surprising - everyone knows Gen Y is a wired generation.  But it's very useful to see hard data supporting this.  Key quote from their blog post on the report:

The latest Census reports that Americans 18-34 make up 23 percent of the U.S. population, yet they represent an outsized portion of consumers watching online video (27%), visiting social networking/blog sites (27%), owning tablets (33%) and using a smartphone (39%). 

Also interesting is the finding that women are more active users of digital media than men.  Women are:

• 51% of TV viewers
• 53% of online video users
• 54% of social network/blog visitors
• 50% of smartphone owners

Men, of course, still dominate the use of TV remotes and change channels 57 times more often than women (OK, that was not in the report).  Men also comprise 53% of tablet owners (that was in the report).

University of Miami's Innovative Launch Pad Entrepreneurship Program

In 2008 the University of Miami started a student entrepreneurship program called Launch Pad.  Unlike most academic entrepreneurship programs, it's not a major or set of courses.  Instead, it's mostly an individual study program using outside advisers to teach aspiring student entrepreneurs what they need to know about starting a business. 

Miami's Launch Pad is housed in their career center and positions entrepreneurship as an alternative to a traditional job.  It is available to all Miami students.  Miami also has a traditional entrepreneurship major and set of courses in their undergraduate business school. 

Since the program started, University of Miami students and recent grads have launched 45 companies.  This level of success led to the Blackstone Charitable Foundation committing to spend $50 million over the next 5 years setting up Launch Pads at other schools, starting with Wayne State and Walsh College. 

Inc. Magazine has a nice Launch Pad summary and Business Week also covers it in an article on youth unemployment. 

Based on our work with entrepreneurs, we're strong supporters of entrepreneurial education and training.  Miami's approach is an exciting innovation in this field. 

Teen Necessity Entrepreneurs

The New York Times article Teenagers are Building Their Own Job Engine talks about teens starting their own businesses because of a lack of jobs. 

According to the article, teen unemployment is at 22.7% and the economic downturn is leading older workers to take jobs that teens would normally get.  This is resulting in teens becoming necessity entrepreneurs - starting businesses because there are not other options.

Gen Y continues to appear to be a very entrepreneurial generation. 

Gen Y - Natural Freelancers

Ypulse, a website/blog focused on youth marketing, has an interesting post on Gen Y's view of freelancing. 

Written by a seriously over achieving Gen Y college student, the article highlights reasons why "freelancing seems to be a natural thing for Gen Y."  Key quote:

"After making it through the incredibly competitive college admissions processes and completing four years of college, today's college graduates are a highly capable bunch. However, after emerging from the less structured campus life where their achievements were mostly fueled by self-motivation, an increasing number of young people are balking at the idea of getting a traditional job with a supervisor and an office hierarchy."

Is Gen Y Too Soft For Entrepreneurship?

The recent Forbes article Entrepreneurship (or lack thereof) in Millenials questions whether or not Gen Y (called millenials in this article) is tough enough to make it as entrepreneurs.  Key quote:

"The oft raised question - and it is a big one for the U.S. - is whether millennials (also known as "The Everybody Gets a Trophy" generation) have been so coddled, so inoculated against insults and injury, that they are now too, well, soft to achieve entrepreneurial success."

We, of course, strongly disagree.  Our research - and the research of others - points to Gen Y being a very entrepreneurial generation.

I'm also curious who is raising this "oft raised question?"  We do a pretty good job of keeping up with the work being done looking at small business, entrepreneurship and Gen Y.  The vast majority of this work is positive about Gen Y's entrepreneurial aptitude.

The author does end on a pro-Gen Y note. 

Gen Y's View of Top Green Brands

Outlaw Consulting has released a list of top 100 green brands based on a survey of their Gen Y trendsetter panel.  The top 10 are Whole Foods, Trader Joes, Toyota, Honda, Google, Aveda, Zipcar, American Apparel, Ikea and 7th Generation. 

As an article in Sustainable Life Media points out, the list favors companies that use minimalist design techniques and/or do a good job of marketing sustainability.  It is both interesting and disappointing that a number of the companies on the list do not show up on lists produced by groups with deeper knowledge of sustainable business practices.  Key quote on this from the article:

"Our trendsetters are very hip and aware, but they are far from experts," explains Barbara Bylenga, founder and chief strategist. "Our aim was to discover which companies are going beyond the niche market of hard-core 'greenies' and winning over the more broadly influential members of this generation."

With sustainability becoming more important to consumers, it is worth better understanding what is driving green influencers.   The Sustainable Life Media article also points out a study on this topic called Greenfluencers by communications firm Porter-Novelli that more broadly covers this topic. 

Employees Want to Work on Their Terms

Interesting report by Deloitte called Competing for Talent.   The study suggests that companies need to change the nature of work to continue to attract and retain high value employees.  Key quote:

"For today’s workers, hefty compensation packages and fancy retirement plans just aren’t as appealing as they used to be. What they really want – more than anything else – is to control when, where, and how they work. They’re happy to work hard, but want to do it on their terms.

And by the way, we’re not just talking about "Gen Yer’s", also known as, "Millenials." As it turns out, recent retirees who are re-entering the workforce want many of the same things as their younger counterparts. So do "Gen X’ers," although most are too afraid to ask."

In our research on very small (5 employees or less) and personal businesses (one person businesses), work flexibility, work/life balance and values are consistently mentioned as key reasons for starting small businesses.  Competing for Talent looks at this issue from the point of view of larger organizations, but reaches the same conclusion as our research - people want more work flexibility and  want to work on their terms.

EDN has a related article on this study that discusses Gen Y in more depth.