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Written by Kieran Delamont, Associate Editor, London Inc. | |
ENTREPRENEURSHIP
Taking the plunge
Self-employment is rising in Canada, and that may — or may not — hold a key to revitalizing entrepreneurial activity
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A RECENT REPORT from the Business Development Bank of Canada (BDC) is arguing that Canada’s self-employed workforce could be a serious goldmine — if they can be supported in growing from sole proprietorships into small businesses that hire employees.
Self-employment, the BDC report said, “saw a resurgence in 2024 after a sharp drop during the pandemic,” with an estimated 70,000 new self-employed workers at the end of 2024. “While the ratio of self-employment to total employment remains below historical averages, this increase signifies a notable trend toward self-employment,” the report stated, adding that around two million Canadians are self-employed.
“We estimate that nearly half of new micro-businesses are launched by self-employed individuals who become entrepreneurs when they hire their first employees,” said BDC chief Pierre Cléroux. “This transition alone could contribute 0.8 per cent to Canada’s GDP.”
The report estimates that if 11 per cent of self-employed workers could transition to entrepreneurship in the next year, it would generate the potential to create 213,000 new businesses and help offset the normal rate of micro-business closures each year. Time is ticking, though: a survey of around 850 self-employed workers revealed the jump to entrepreneurship is most likely to be made in the first few years. “After this time,” the report explained, “the likelihood of becoming an employer drops, and after 15 years, only a few choose to hire employees.”
It is, of course, easy enough to point this out — it’s another thing altogether to help make it happen. Whether or not there is a desire on behalf of self-employed folks to become entrepreneurs is question number one. Rising unemployment, a slack labour market and frustrations with the corporate sector are very likely part of why self-employment has been on the rise, as opposed to more robust enthusiasm for entrepreneurial life.
Indeed, the BDC’s study found that 35 per cent of self-employed workers sort themselves into the ‘stable’ category — people who have no plans to turn themselves into employers. So, what the report views as missed opportunities might in fact be reflecting some very deliberate choices.
But whatever the reasons, self-employment is on the rise, and the BDC sees in that an opportunity. “Ultimately, fostering self-employment is essential to reviving Canada’s entrepreneurial spirit,” the report said. “By supporting the ambitions of self-employed individuals and facilitating their transition to becoming employers, we can stimulate economic growth and ensure the sustainability of Canada’s entrepreneurial ecosystem.”
If they want to, that is.
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RECRUITMENT
Flipping the script
The rise of ‘reverse recruiting’: a new frontier (and minefield) for jobseekers
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IT’S TOUGH TIMES for white-collar workers at the moment, as anyone who reads this newsletter regularly might have surmised. All is not well among professional knowledge workers, particularly those who are in the market for a new job and dealing with a mosaic of annoyances and indignities, from ghost jobs to lengthy interview processes to battles with AI screening tools.
All of this has led some people to explore whether money can help solve this problem via ‘reverse recruiting’ — paying to get your name in front of hiring managers.
A recent piece in The Wall Street Journal is shining light on the practice, something that first popped up around a decade ago but which has taken off in the last couple years amid greater labour market strife in white-collar sector. Under the traditional recruiter model, companies pay recruiters to find talent for tough-to-fill positions. “Now, though, jobseekers are hiring a new crop of what are called reverse recruiters to help them crack a competitive market,” the article said.
The service ain’t cheap, that’s for sure. At the Reverse Recruiting Agency, the standard package costs US$1,500 per month, plus 10 per cent of your first-year salary upon job acceptance. At Top Prospect Careers, a Canadian-based firm that openly promotes reverse recruiting as its core offering, programs start in the $5,000-plus range.
But some jobseekers are touting the success they’ve had by paying up. One software engineer told WSJ if nothing else, it was “refreshing” not to feel like he was lost in the pile of candidates applying to online jobs.
Others are skeptical about the legitimacy of the reverse recruitment industry. One traditional recruiter, Ken Jordan, told Entrepreneur magazine there might be a risk of exploitation here. “These companies are really good at marketing, and I think jobseekers who are vulnerable can be easily swayed,” he said.
Above all, though, it’s an indicator of how difficult the white-collar job market has become for those trying to navigate it. “The rise of reverse recruiting isn’t happening in a vacuum,” observed Stephanie Alston, president of BGG Enterprises. “It’s really a response to just how tumultuous the labour market is, even for highly qualified jobseekers.”
Above all, the flow of money tells the story clearly enough. “When companies pay recruiters, it’s because talent is scarce,” noted executive coach Liz Bentley. “When candidates pay them, it’s because jobs are scarce.”
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Terry Talk: Your employer brand is costing you talent (and growth)
| What if employer branding isn’t just HR fluff, but a real business growth engine? Fifty per cent more qualified applicants, 28 per cent less turnover. And companies with strong brands grow 20 per cent faster. In this edition of Terry Talk, Ahria Consulting president & CEO Terry Gillis discusses three proven ways to build a brand people want to work for, starting with your Employee Value Proposition, empowering your people as storytellers, and improving the candidate experience. | | | |
QUALITY OF WORK
No one knows if jobs are getting better
When it comes to AI’s impacts on work, we don’t yet know anything for sure. But this isn’t stopping everyone from pretending like we do
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WE’VE WRITTEN AT length in this newsletter about all the ways generative AI is changing work (on top of how work is changing overall). Last week, we looked at research suggesting it was making work more intense; in January, we wrote about those who were dismayed that it had taken away all their boring work; and in other editions we’ve looked at whether it is making work more productive.
But none of those really answer a question that labour economist Kirsten Sehnbruch recently posed in an interview with the London School of Economics: Is work getting any better?
Like so many questions about AI and work, there are no easy answers. “Yes, in some ways. No, in others,” Sehnbruch said.
Over time, wages have gone up and people are working slightly less with better access to pensions. But the work itself may not be improving. “What has deteriorated is the stability of jobs, the types of contracts and the number of people working in precarious conditions,” she said.
One thing that seems inarguable is that the environment of technological changes has altered the way everyone feels about work, namely by heightening anxiety and concern. Martha Gimbel, director of the Budget Lab at Yale, said this makes sense, and helps to explain why there has been such a persistent focus on whether or not AI is replacing jobs. That has been hard to prove, since AI has risen at a time when the job market was already in flux.
“ChatGPT was released in the middle of a rate-hiking cycle, so we would’ve expected the labour market to slow down anyways,” she told CharterWorks in an interview recently. Despite a widespread sense that AI is replacing jobs, correlation is not causation. “This is going to be very hard to perfectly track,” she added.
For the most part, it remains difficult to get to the root of the question in any objective way. Those interested in the macroeconomic impacts of new technology are preoccupied with macroeconomic indicators — jobs, productivity, output, stuff like that. “What’s unclear is what that means for specific workers,” Gimbel said. “Does that mean you become more productive? Or does that mean it’s actually a large chunk of your job, and things go away?”
One thing that almost all agree on, however, is the way work is changing for older workers is much, much different than how it’s changing for younger workers. “I think for young people the key thing is a broad set of skills that are adaptable and relevant to any jobs,” Sehnbruch said. “Young people have always been more flexible than older workers in terms of adapting to new technologies. But they will have to sustain their flexibility over their entire working lives.”
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CULTURE
The economics of sleep
A closely watched lawsuit that threatened to put the junior-banker grind on trial has ended quietly, even as questions about working conditions for young finance professionals refuse to go away
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EVEN IN THE notoriously high-pressure world of finance, Kathryn Shiber’s contract was unusual. Upon being hired as a junior analyst at Centerview Partners in 2020, she reached an accommodation with the company: she got a “hard stop” at midnight, nine hours of guaranteed sleep time, and would be available at pretty much all other times.
The deal held for 10 weeks before she was fired, which led her to sue Centerview, claiming the company unlawfully fired her. And then, on the eve of jury selection for the trial this week, the case was settled out of court.
The sleep case had become somewhat of a cultural flashpoint over the long hours that are commonplace in banking and finance. The company had contended 24/7 availability was an “essential function” of the job; the human body, on the other hand, contends it needs sleep to survive.
There has been a growing reckoning within the finance sector over this kind of work culture. In 2021, a survey of first-year analysts at Goldman Sachs (and leaked to an Instagram meme account) found that in one week, its junior staff were working around 105 hours a week, sleeping around five hours a night and not hitting the sheets until 3 a.m.
While some of the larger Wall Street firms, like JPMorgan and Bank of America, have taken steps to limit the hours junior staff are working, others haven’t addressed it. “It’s the junior bankers at the elite boutiques that have become increasingly busy, as they tend to operate with leaner deal teams, so the workload can’t be spread as broadly,” explained Anthony Keizer, cofounder of Odyssey Search Partners, speaking to Business Insider.
Some will likely be disappointed that the case wasn’t litigated in open court. Labour advocates within the finance sector had hoped the case might have put the practice itself on trial, even in industries where everyone knows what they are getting into.
“While some have applauded attempts to strengthen employee protections, others have argued that new hires understand what they’re signing up for and that high compensation justifies the gruelling hours,” wrote OnLabor’s Miriam Li, a student at Harvard Law School. “This argument overlooks a fundamental principle underlying all workplace safety laws: the fact that an employee willingly shows up for work and receives compensation does not grant employers a license to impose dangerous working conditions.”
Sleep experts had also been keeping an eye on this case, as it helped make a case they have been repeating for years: sleep is as important an ingredient to productivity as anything. “Eight to nine hours of sleep isn’t indulgent, it’s necessary,” stated sleep expert Dr. Shelby Harris. “In high-stakes fields like finance, where decisions can carry enormous consequences, protecting cognitive performance through adequate sleep should be viewed as an asset.”
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