1 in 10 laid-off workers plan to start their own business, despite high inflation: report

Quick Take

• 1 in 10 laid-off workers plan to start their own business instead of returning to the workforce as an employee
• 50% say they will fund their new company with a small business loan
• Instead of returning to the workforce, 1 in 10 plan to start their own business, despite inflation and the possibility of a recession

In July, over 32,000 tech workers lost their jobs as mass layoffs hit the tech sector. As the layoff number rises, more tech companies said they are also planning to trim their workforces to counter market challenges amid the global economic downturn.

As The Great Resignation turns into The Great Attrition, 40 percent of global workers are considering quitting their jobs. The question many are asking is: Where are the laid-off workers going? Now, a new survey from Digital.com provides more insights and sheds more light on where they are going.

With fears of layoffs and the economy sinking into recession, Digital.com wanted to find out how workers who have already been laid off this year are handling an unpredictable job market. Digital.com surveyed 1,250 workers who were laid off in 2022 and the findings were shocking.

Key findings

• 1 in 10 plan to start their own business instead of returning to the workforce as an employee
• 50% say they will fund their new company with a small business loan
• 50% plan to fund their venture with small business loans
• 4 in 5 are somewhat or very concerned about starting a new business while inflation remains high
• Instead of returning to the workforce, 1 in 10 plan to start their own business, despite inflation and the possibility of a recession
• Despite 4 in 5 expressing concern about the economy, many also stated they do not have a backup plan in place

The majority of workers who were laid off in 2022 do not plan to get another job in the same industry. 49% of respondents said they plan to find another job in their field, 29% plan to find a job in a different field, 10% will start their own business, and just 6% say they will go back to school instead.

The most common industries survey respondents reported being laid off from included retail (21%), service and hospitality (12%), healthcare (10%), and manufacturing (9%). Additionally, of the laid-off workers who plan to start their own business, close to two-thirds say their new business will be in a different industry.

“Try to get some real-world experience in the industry [before starting your business],” advised small business consultant Dennis Consorte. “You can either take on a part-time job to get your feet wet, or you can explore the industry as a customer.”

“You don’t have to actually buy anything. But, you can pay attention to industry trends, the customer experience in different retail shops and online, and what you like or don’t like about competitor products.”

More Money and Passion Projects Are Top Reasons for Starting a New Business

When respondents were asked why they wanted to start their own business instead of going back to work, the top answers given were to make more money (57%) and to pursue a passion (56%).

“No matter what you pursue, it should be something that you’re excited about,” continued Consorte. “If you lack the passion when you start out, then it’s likely you’ll burn out before the business becomes a success. If you haven’t worked in the field, then learn as much as you can before you start your business. You can spend hours diving into industry publications, websites, and online videos to get some background.”

You can view the full report here.