Many people start a business while retaining their day job. This phenomenon, also known as hybrid entrepreneurship, is found in 50-85 percent of nascent entrepreneurs in countries such as Japan, the Netherland, and Sweden. Not only it is prevalent, but hybrid entrepreneurship is also sometimes suggested as a steppingstone to full-time entrepreneurship. By taking this path, individuals can test the entrepreneurial water before making the switch from paid jobs to full-time self-employment. However, it remains unknown whether hybrid entrepreneurs enjoy the well-being benefits that many self- employed report such as higher job satisfaction, or whether they experience more stress due to the double role.
In a new study, ACE researchers; Dr Retno Ardianti, Prof Martin Obschonka, and Prof Per Davidsson, investigate the unknown psychological implications of working in this unique work arrangement. By using data from a longitudinal survey in the United Kingdom from 2011-2017, they compare hybrid entrepreneurs’ levels of strain, job satisfaction, and life satisfaction with three groups of people. These are full-time paid employed, full-time self-employed, and with people who work in two paid jobs. Further, by employing the matching approach to simulate random allocation of people in the comparison groups to reduce the potential self-selection effects, they examine wellbeing changes of people who switch to other jobs versus people who remain in their job status. In total, they examine six types of job switches: involving hybrid entrepreneurs, full-time entrepreneurs, people working in two paid jobs, and full-time paid employees.
Their findings indicate that on the surface, those who work as hybrid entrepreneurs have the highest strain levels compared to people in other groups. However, by using matching approach and accounting for individuals’ differences I terms of demographic characteristics, personality traits, prior work experience, and income, the results indicate that their strain levels are not significantly different. Their result thus suggests that dual jobholders (either as hybrid entrepreneurs or workers in two paid jobs) experience neither depletion nor enrichment from their work, particularly when the observed individual differences are taken into account. For hybrid entrepreneurs, the enriching outcomes of work are observed only if they switch to full-time self-employment as indicated by the increase in their job and life satisfaction.
The findings from their study suggest that the psychological well-being of hybrid entrepreneurs can be explained from both person factors (self-selection effects of people with certain characteristics to their jobs) and job factors (unique aspects of their work characteristics). In addition, their findings suggest that existing research that only compared paid versus self-employed individuals (thus may lump hybrid and full-time self-employed together into the self-employed category), might have underestimated the positive well-being effect of opportunity driven entrepreneurship. Their finding indicates a greater increase in the job satisfaction of people who switch to full-time entrepreneurship from hybrid entrepreneurship than from full-time paid employment.
Overall, the new study has helped to reach a greater understanding of the hybrid entrepreneurship phenomenon and the psychological costs and benefits associated with hybrid entrepreneurship, and related job transitions.