Managing Your Business
The Great Resignation’s Effect on New Business Creation
The Great Resignation is the recent trend of people leaving their current jobs to either start their own business or find better benefits, higher salaries, and more opportunities to advance their careers. It kicked off around the spring of 2021 and shows no signs of slowing down. According to the Bureau of Labor Statistics, 4.3 million people quit their jobs in January 2022.
COVID-19’s Effect on New Small Business Filings
It’s no secret that COVID-19 has had a devastating impact on the economy and led to reduced spending, business closures, and supply chain issues. But somewhat counterintuitively, the number of people starting new businesses has remained strong, even increasing in some industries.
With the widespread availability of vaccines from the pandemic, businesses began bringing their employees back to the office. Now that employees have seen the other side of remote work, many are opting out of 9-5s and forging new paths.
This flexibility of recruiting talent from any location has been a game-changer for entrepreneurs. This accessibility to employees breaks down a pre-existing barrier for new businesses and opens a whole new world of opportunities.
While the Great Resignation caused labor shortages in many industries, it also led to a boom of small businesses and created a fresh slate for entrepreneurs to innovate and begin new ventures.
Swyft Filings is uniquely positioned to monitor these trends and their effects. We examined data from new business applications filed across the U.S. to understand how specific industries are faring in our Annual Swyft Industry Report. Here are five of the top sectors seeing growth from the Great Resignation and its influential trends.
Retail ranked #1 in Volume Rank, which means the overall volume of business filings in 2021. We can see this link between people leaving their current employment to start selling their quarantine art projects or finally opening that boutique they always dreamed of. Beyond those more creative pursuits, people are joining the retail sector to provide necessary products such as medical supplies, meal preps, and any niche that needs filling.
Digital transformation allowed for more people than ever to take the leap and start selling their products through sites like Etsy, Shopify, and personal websites linked through social media sites. These mediums broke down previous business barriers, such as opening a storefront, hiring employees, and owner age.
Digital transformation and COVID-19 hurdles influenced an increase in the warehousing industry’s business filings. The warehousing sector ranked #1 in Growth Rank, meaning it had the most significant percentage increase in fillings since 2020.
Because of the pandemic, e-commerce went from nice convenience to mandatory shopping staple almost overnight. COVID-19 brought activities outside the house to a halt, including shopping for necessities like groceries, cleaning supplies, and toiletries. With more people staying home, they also turned to online shopping for more fun items to distract from the pandemic around them.
With this increased need for online products, businesses needed warehouses to keep up with the demand. Entrepreneurs saw this need for more warehousing and decided to jump in.
But this increased interest in the warehousing sector began even before the pandemic. Sellers started seeing the benefit of more and more warehouses near dense populations to increase convenience, and warehousing business owners were happy to meet that demand.
The rise of digitization of retail also impacted the transportation industry. This sector ranked #2 in Growth Rank with steady increases in 2020 and 2021 to meet demand. It also ranked #2 for Volume of New Businesses, so it saw a steady increase and served as a front runner in the total number of filings this year.
Businesses need their goods moved all over the country on time and rely heavily on transportation companies. Entrepreneurs have taken this need and started up new means of transporting goods efficiently.
The e-commerce boom has affected transportation for many of the same reasons as it did for warehousing. For retailers like fast fashion sites and convenience marketplaces like Amazon, timeliness of delivery is at the forefront of their business model. They must work together with transportation companies, and specifically freight companies, to uphold these efficient delivery methods.
Rental and Leasing
The rental and leasing sector also saw increases. This industry ranked #3 in Growth Rank with a 26.85% increase in filings from 2020. With widely available vaccines and boosters, many people are ready to get back to traveling, relaunching the rental and leasing industry back to a thriving state.
With the long break during the pandemic, entrepreneurs had the opportunity to prepare for the travel resurgence and innovate to propel the industry forward. The rental and leasing industry’s growth seems to not be slowing, giving entrepreneurs a chance to bring their ideas to the table and begin their own businesses.
The technology innovations that came with the pandemic greatly influenced today’s insurance industry. The sector ranked #4 in Growth Rank with a 24.37% increase in new filings from 2020. COVID-19 forced insurance companies to adapt with automation and virtual customer service.
These innovations led businesses to become more efficient and accessible to customers. The technology shifts in the industry laid a strong foundation for forward-thinking entrepreneurs to throw their hats into the ring by filing for insurance businesses.
The Great Resignation’s Lasting Effects
The Great Resignation trend continues to make waves in multiple industries. Because of COVID-19 inspired workplace changes, including remote work, digital transformations, and technological advancements, many industries saw a boom in new business creation. These filings will likely continue to boost these sectors through unique opportunities to push it forward in the future.
Find more discussions of other industries affected by recent business trends in our annual Swyft Filings’ Industry Report.