Business Research

Self-Employment Comes with Surprises

By Barbara Elmore

The results Dr. James A. Roberts finds a bit surprising when he looks at his research on the satisfaction levels of the self-employed is not that they find fulfillment in their new roles, but that their levels of job satisfaction register only a fraction higher than those who work for an organization.

However, the W.A. Mays Professor of Entrepreneurship at Baylor University believes he's found at least a partial answer to why the pleasure over being one's own boss doesn't always reach Richter scale levels -- as much as conventional wisdom suggests that it might. People who go into business for themselves may not have realized beforehand they'd be wearing so many hats at work -- that of buyer, accountant and computer guru, for example.

"We found that entrepreneurs are more satisfied, but maybe not as much as folklore would suggest," said Roberts of research he conducted with former Baylor sociology professor Don Bradley. "(Self-employment) may be a good solution and certainly plays a vital role in our economy. But it's not a bed of roses."

Roberts, associate professor of marketing, has written two papers with Bradley on this subject of becoming one's own boss. The first comes from the National Survey of Families and Households, and the second from the British Household Panel Survey. His current research interests include sales force change management, consumer behavior, and studies at the entrepreneurship-marketing interface.

"I do a lot of research in the area of consumer behavior," said Roberts, who examines subjects like materialism, compulsive buying and credit card use. His study of job satisfaction and entrepreneurship came as he was searching for important issues to research. He considers the issue of job satisfaction and entrepreneurship important because entrepreneurs provide growth and creativity in the economy.

The reasons entrepreneurs strike out on their own are no secret. They turn to self-employment because it holds out a chance for greater money, more freedom and responsibility, and more happiness with the daily task. But Roberts found the reasons for entering self-employment are often a double-edged sword.

In his first examination, which looks at the reasons why people become self-employed, he approached the question of self-employment using the "push-pull" taxonomy that argues there are two main avenues to self-employment.

"One is that they are pushed into it by mergers, downsizing, terminations and multiple relocations. People say, 'I've had enough.' " These people feel pushed into going into business for themselves, said Roberts.

Others enter self-employment because they believe they would be happier if they worked for themselves. "We all want to use our creative abilities and have the autonomy to make decisions," he said. "This is the pull side. A lot of us are pulled into it because of those reasons. It's bundled into job satisfaction."

But truth exists on both edges of the sword, said Roberts. "The lure of entrepreneurship or self-employment is very strong in America. People want to be their own boss. Also, the chance for greater financial remuneration is very important. But I think people go into it for the lifestyle -- the autonomy and responsibility that come with self-employment. The idea of job satisfaction. They enter because they figure they would be happier."

The first study that Roberts and Bradley conducted talks about this "pull" side of self-employment. "We do find that people who are self-employed report higher levels of job satisfaction than those who work for an organization. But it's not as big a difference as you might think. It's half a point or four-tenths of a point on a five-point scale -- 3.5 or 3.9. But it is hundreds of thousands of people. So we found that yes, the self-employed are more satisfied with their jobs. It gives some credence to the idea that they are lured -- pulled."

He also found something else interesting in the first study: "Although we found that the self-employed reported higher levels of job satisfaction than the organizationally employed, it might be self-selection. The self-employed are self-efficacious. Self-efficacy means a high level of confidence in your ability to get the job done. They are more likely to be satisfied with their jobs as entrepreneurs." They are also less prone to depression, he added.

Roberts and Bradley discovered that self-efficacy, or high confidence in your ability to get the job done, is a particularly important trait for entrepreneurs. "A person's sense of self-reliance that he can get things done is very important in his decision," he said.

In a second study, the two professors looked at self-employment from the opposite side: the perspective of people who are pushed into starting their own businesses. "The second study showed that people less satisfied with their organizational jobs are more likely to become entrepreneurs," said Roberts.

Another thing they discovered in the second study is that the longer a person has been self-employed, the more he realizes how dissatisfied he was with organizational employment. "As you find success, you do realize a greater level of self satisfaction," he said.

One factor that interests Roberts is that being dissatisfied with a job helps people already prone to entrepreneurship to take that final step. "In a way, I am surprised that it's such a big decision. They may have been on their third or fourth job before they realized what they want is not going to be found in an organizational setting."

He and Bradley, who attended the same church when Bradley lived in Waco, discovered they had research interests in common. "My research has a psychological bent, so we had crossover interests," said Roberts. Although Bradley is now at East Carolina University in Greenville, N.C., they are continuing their research with a third study that looks at different facets of organizational job satisfaction such as autonomy, pay, and responsibility. They want to discover which of these factors are the most important in the decision to seek self-employment.

"We have a number of projects in the works," added Roberts. "Don is looking at immigrant self-employment, studying different cultural groups and what makes them more or less successful, what factors help them and encourage them."

Baylor University