Millennials have arguably been the most interesting phenomenon of the decade. Millenials, the generation of young people born from the year 1984 onwards, are a young generation who have been affected by massive advancements in technology, globalization, socio economic changes more than any other group. It comes to no surprise that they view their careers and entrepreneurship in a different way.
Millennials have a reputation for ditching their nine-to-fives for entrepreneurship. But in terms of young people actually going out to start their own businesses, this perception is very different from reality.
The reality is that many millennials are choosing corporate jobs over entrepreneurship. More so than previous generations. A combination of factors is driving this shift, including debt, lack of savings, job security, and risk aversion.
Millennials are opting for careers that can accommodate their growing debt. The Pew Research Center reported that millennials are more burdened by financial hardships than previous generations.
With more debt than their predecessors, millennials are focusing on paying off their student loans, which means making a steady income and minimizing expenses. As an entrepreneur, paychecks aren’t always steady and starting the business itself requires, at a minimum, an initial investment. With student loan debt on the rise, millennials are pursuing corporate careers because of the pressure they feel to pay down their student loan debt.
2. Lack of savings
Millennials are also choosing office jobs because they lack the savings to support entrepreneurship. While millennials may be saving money in retirement funds, more than half of millennials have less than $1,000 in liquid savings, according to Market Watch.
Entrepreneurship requires some level of savings (and the more the better) and inherent in starting a business is the need for liquid savings. Not only do entrepreneurs need cash to live on until the business makes enough of a profit, but they also need money to start their businesses. Without adequate savings to live on or to use to fund a new business, millennials don’t have the cash to support their entrepreneurial dreams
3. Job security
Millennials value job security more than previous generations. In a 2013 study, 40% of millennials reportedly valued job security as “extremely important” compared to a lower 31% of the older generation.
If millennials have higher student loan debt and lack cash savings, it makes sense that they would prioritize job security more than their predecessors. Millennials need a steady job to make their debt payments and meet their standard of living expectations.
4. Risk aversion
According to an Economic Innovation Group study, millennials are risk averse compared to previous generations. Millennials perceive corporate jobs as being less risky than entrepreneurship.
With various financial pressures and a need for job security, millennials are feeling more risk averse than ever before. Without the capacity or tolerance for taking risk, millennials are not pursuing entrepreneurship which inherently is a risky business.
The challenges of today, requires the generation of millenials to be at the fore-front of building companies and industries through innovation that will make the world a better place. In the age of information-overload, sometimes millenials are ill-equipped with the right information that will help to fearlessly venture into entreprenuership and build tomorrow’s Fortune 500 companies.
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