Report: How Enduring is Job Creation by Startups?
An interesting report from the Kauffman Foundation sheds light on employment practices and duration at startups. The results are somewhat surprising. By looking at hiring practices over 23 years, the report concludes that there is an interesting relationship between job growth and well, the opposite, at startups: Firms that grow and hire many people balance out the other firms who fail and fire workers. Here are some other interesting tidbits:
1) Startups retain an average of 80% of initial employment up to five years from inception. That may be the most shocking and somewhat counterintuitive result since people tend to think of startup employment as more temporary than permanent.
2) Launching during a recessions does not affect a startup’s employment levels after five years.
3) Prolonged exposure to recession does, however, affect employment–startups exposed to recession for long periods of time (3 years) had approximately 10% lower employment after five years than startups not exposed to recession.
Read more about the methodology and results of the report here.