The number of Gen Z directors of UK companies has jumped by 42% in just a year, from 171,000 to 243,000, shows new research by Hazlewoods, Chartered Accountants and Business Advisers.
In recent years, many members of Gen Z (those born after 1997) have started their own businesses, often as a side-hustle alongside their main jobs. Some of these young entrepreneurs have eventually quit their jobs in favour of running their own startups full-time.
Generation Z, even more than millennials, aspire to be their own bosses rather than climb the corporate ladder.
Following the proliferation of entrepreneurial role models from Silicon Valley, today’s young professionals and recent graduates see owning their own businesses as not only attainable, but also a realistic outcome.
The financial success of fiercely independent entrepreneurs such as Jeff Bezos of Amazon and Elon Musk has made it clearer than ever that the highest monetary rewards are generated by business owners.
Gen Z are also attracted by the idea that being an entrepreneur allows you creative control, a chance to make a purpose-driven impact, and the opportunity to build a legacy.
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Many popstars and celebrities are expected to use their platforms to launch successful businesses or to take control of their artistic output in a more entrepreneurial way. A prime example of popstar turned business mogul would be singer Rhianna’s launch of Fenty Beauty in 2017, which was recently valued at $2.8 billion by Forbes. Social media influencer and reality star Kylie Jenner started Kylie Cosmetics in 2015, which was valued at $1.2 billion at the time of its sale in 2019.
Commenting on this, Hazlewoods partner, Ryan Hancock, said: “Entrepreneurship is really aspirational in this day and age. It’s getting to the point for many members of Gen Z where starting a business is preferred to working for someone else.”
“Traditional 9-5.30 jobs could become less and less common as recent graduates and young workers chase entrepreneurship.”
Generation Z’s entrepreneurial success stems largely from its ability to leverage digital tools and platforms for business growth. Software as a service and extremely low-cost computing has also lowered entry barriers to start up a business.
Hancock added: “For many people in previous generations, the ‘dream’ was finding a career and progressing to the top of the ladder of a bank or a law firm. For a lot of members of Gen Z, that simply doesn’t appeal. More people in Gen Z are happy to opt out of that path entirely.”
“A lot of young people see running their own business as an opportunity to build a career that fits around their lifestyle, rather than having to fit a lifestyle around their career.”
Generation X directors start to head into early retirement
Hazlewoods adds that the number of Generation X company directors (those born from 1965 to 1981) has decreased by 10,000 to 2.37 million this year, after peaking at 2.38 million in 2022. This suggests that Gen X directors are now starting to take early retirement.
Ryan Hancock says that some Gen X directors’ choice not to return to the workforce has opened up leadership roles to younger professionals.
These signs of rising early retirement come despite the fact that Generation X directors are now aged 43-58 – thought to be among the ‘peak years’ for earnings. However, says Ryan Hancock, these are also the years during which individuals may experience the most workplace stress, which can affect their health. This may be playing a role in pushing some Gen X directors into early retirement.
Hancock concluded: “Greater workplace flexibility that’s come along in recent years has given us all a taste of what it would be like to spend more time at home with our families. Some Generation X directors – particularly those in their mid-50s – are perhaps already considering retirement and have decided not to go back to work.”