How Entrepreneurs Avoid Burnout and Thrive
Research Paper Title:
“Job burnout and work engagement in entrepreneurs: How the psychological utility of entrepreneurship drives healthy engagement”
Authors:
Background:
Burnout and stress are at an all-time high. This is the first major burnout study focused on entrepreneurs. Despite the strong work engagement many entrepreneurs consistently show, and their "always on" cognitive state that spills over to off-work time, it was unclear so far whether entrepreneurs are more or less burned out than employed individuals, and how they might manage to produce positive psychological outcomes, despite the apparent workaholism.
Highlights:
We present a novel framework of the psychological utility of entrepreneurship.
We combine Job Demands-Resources theory with a work recovery approach.
Entrepreneurs' personal agency generates and protects outstanding psychological utility.
We validate the framework analyzing panel survey data comprising four waves.
We also study various subgroups of entrepreneurs, particularly solo entrepreneurs.
Methodology:
Number of studies: 1
Sample description: Entrepreneurs and employees
Sample size: 348 entrepreneurs and 1002 employees
Hypothesis:
Hypothesis 1: There are opposing mediation effects between being an entrepreneur vs. being employed on the one side, and burnout on the other (H1a, b vs. H1c).7 H1a Entrepreneurs show higher levels of job resources “ and job resources have a negative effect on burnout. H1b Entrepreneurs show higher levels of personal resources “ and personal resources have a negative effect on burnout. H1c Entrepreneurs show lower levels of work recovery “ and work recovery has a negative effect on burnout.
Hypothesis 2: Entrepreneurs experience higher work engagement levels than employed individuals because they benefit from (a) higher levels of engagement ”enhancing job resources, and (b) higher levels of engagement ”enhancing personal resources. Taking Hypothesis 1, Hypothesis 2 together we thus assume that entrepreneurs, compared to employed individuals, experience the more positive JD-R pattern in terms of demands and resources (as also illustrated in Table 1). This boosts their high, healthy engagement, while avoiding negative outcomes (burnout) ”two hallmarks of psychological utility as defined from a positive psychology perspective.
Hypothesis 3: Solo entrepreneurs experience lower job burnout levels than employer entrepreneurs because they face lower levels of burnout ”enhancing job demands while maintaining high engagement levels.
Results:
Entrepreneurs show higher levels of work engagement and they show less job recovery behavior (such as less daily psychological detachment from work after after official working hours). Hence this would be comparable to workaholism.
The study makes clear that, other as often expected, entrepreneurs are not more burned out than employees. While they might be at risk because of less psychological recovery from work, while maintaining a high level of work engagement to run their businesses, they actually show significantly lower burnout levels than employed individuals.
There seems to be a paradox of positive workaholism. To solve this paradox, the study went one step further and focused on key mechanisms associated with burnout and work engagement and the nature of the daily work tasks. The study reveals novel insights into the psychological utility of entrepreneurial work, that sets it apart from employed work. Other than often assumed, entrepreneurial work, on average, does not produce more daily work stressors (e.g., workload, time pressure, admin tasks) but less of these stressors, compared to employed work. In addition, entrepreneurship provides high levels of personal job autonomy for the entrepreneur. Hence, entrepreneurial work is associated with a low job stressor/high job resources pattern, which in turn incentives entrepreneurs with positive psychological returns on their substantial work engagement investment (realized psychological utility of entrepreneurial work). Hence, on average, entrepreneurs are kept not only more energized and in a positive state of mind due to their work, compared to employees, they are also more satisfied with their work. In other words, typical entrepreneurial work, compared to typical employed work, might help people accumulate positive psychological outcomes (such as positive, energized state of mind and job satisfaction), while avoiding the potential downside of consistent, strong work engagement (such a burnout).
The study also comes with implications for employed work. Such jobs should consider more entrepreneurial setups to reduce the elevated burnout risks that harm society (for example in at risks jobs that demand strong work engagement).
Conclusion:
The study illustrates how entrepreneurs avoid burnout and accumulate positive psychological outcomes. The collective maximization of such psychological utility not only promises personal benefit in the entrepreneurial sector but also, more broadly, to the development of healthy, motivated, and well-rewarded entrepreneurs running their businesses, collectively generating broader social and economic benefits. This does not only have implications for entrepreneurship research and practice, but also for employed individuals: How to switch from the stress mode to the positive motivation mode. One can conclude that by making such jobs more entrepreneurial, strong work engagement is less likely to lead to burnout, and more likely to lead to positive psychological outcomes.