Large or Small Company? – The Pros and Cons of Employer Size

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Down with the man, some rebellious youths continue to spout. Since the inception of the large company, the monopoly, or the capitalistic conglomerate, some people will always rise up against the idea. There should never be just one, we are built upon the idea of market competition, or business-minded companies lose the core concept of what makes small businesses so great.

Though we would love to grasp and continue the mutinous energy of our youth, the facts are the facts. Once you get into the working world and begin progressing toward a professional career, the idea of being employed by a large business becomes less nuanced and more understandable. It makes sense. In a world where finances and professional success are the key components regarding a ‘stable and comfortable life, working for a large company begins to make more sense, despite the sensibilities you once held.

You can talk about the importance of small businesses all day (and we rightfully agree), but when checks and bills start to rule the entire RAM of your mind, those stable checks of big employers become more acceptable. Sellout or not, we all strive to be as successful as possible.

But, when deciding on different jobs and the shaky steps at the beginning of your career, choosing which faction to subside to can be difficult. Do you go for the small job, giving you more room to spread your wings? Do you work with a large job, providing for more stability and financial grounding?

While it would take a book of text to break down every possible pro and con of employer size, we will point out the biggest and most dramatic differences, helping you decide where your professional road shall take you.

What Are the Metrics? What Is Large and Small?

As with the beginning of any experiment or hypothesis, we must break down the metrics of our terms. The definitions. What we are even talking about.

Overall, the terminology of large and small are completely subjective. For example, some people may believe Amazon to be a large employer, with anyone under it being medium or small. So, to clarify our definitions, we will provide metrics for each.

Luckily, the government has already done this for us!

The U.S. Small Business Administration (SBA) operates in accordance with Public Law 85-536, called the “Small Business Act,” (SBA) to help protect the interests of small businesses, strengthen the economy, and preserve free enterprise. The SBA states that a small business is an entity that is not dominant in its industry and has independent owners.

Unfortunately, the exact terms of deciding if a business is large or small depends on the industry, but a general rule of thumb is around 500 employees. If a company employs more than 500 workers, it’s considered large.

According to the SBA, some manufacturing businesses can be considered small with more than 1500 workers, but that’s in industries where mass employees are more common (i.e. mining and heavy construction). There are also some industries that depend on income, but we are sticking to workforce metrics here.

Ultimately, let’s consider a large company as one with more than 500 employees. These workers don’t have to be within one department or office space, but they are employed by the same business.

Is It Truly Worth Discussing?

Every time I begin an article, I ask myself the same question. Is this topic really worth diving into? Am I spending my time wisely while formulating this wonderful and thought-provoking article (ahem)?

The decision for professionals is actually at a significant high, especially within the tech sector. With huge employers laying off a significant amount of workers, smaller ones are scraping up the kicked-out professionals.

In 2022, over 964 tech companies laid off over 149,876 workers globally. Though the numbers may seem skewed, surrounding an industry with millions of workers and thousands of companies, the significance is as crucial as you could possibly imagine. So critical, in fact, that WRAL Tech Wire created an entire list for ‘Layoff Watch’ last year.

Amazon dropped 18,000 workers. Microsoft cut 10,000.

But, small businesses are hiring at an alarming rate. In fact, there is considered to be a labor shortage in a plethora of industries.

Robert Frick, corporate economist at Navy Federal Credit Union, told CNN, “While layoffs from high-profile firms make the headlines, plenty of firms are desperate for more workers, especially tech workers. Those workers are in high demand from the auto industry to the Department of Veterans Affairs to not-for-profits.”

To put it simply (we broke it down in detail in the article here), big businesses are cutting workers because they hired too many in preparation for COVID and post-COVID. That influx of hiring didn’t necessarily mean that there were more jobs created. It was an overcorrection of sorts. Therefore, now smaller businesses need workers because the bigger ones took them all. The bigger ones are now cutting because they took them all.

Get it?

Consequently, the decision for workers is now significant. Small businesses may now be offering competitive salaries to bigger ones in order to combat the labor shortage. Deciding between them requires knowledge of the pros and cons.

The Pros of Each

When deciding how to handle the wide array of factors, I decided it’s easier to break the pros and cons into a simple formula. Below will be the pros of both small and large employers. Differences, if you will, like the opposing sides of a Venn diagram. Therefore, the pros of one will indirectly be considered cons of the other through the nature of specificity.

For example, if a small company is great for this, it’s inherent that the large company is bad for that.

Therefore, there will not be a list of cons, but there is addition through subtraction. Or whatever. So, to fully get the outlook of the decision between smaller and bigger employers, you must read every point.

Yup. I’ve got your attention for the long haul. Cha-ching.

Furthermore, we must note that we are pinpointing the begging or middle of a career path. Being a senior in your role may lead to a different variety of pros and cons, though probably not drastically different. For example, our first pro will involve growing in your role, something that doesn’t necessarily need to be done if you are already at a senior point.

I digress. Let’s get to it.

Small Company – Standing Out Is Easy

Personal anecdote: when I began my career, I was living in one of the most populated cities in the country. After being turned down by countless (and I mean countless) jobs, I turned to a professor for advice.

They told me something that continues to ring true, even for those outside of my specific industry. He told me, “your chances of being the best writer are much higher elsewhere.”

The big fish, small pond approach when beginning your career makes an ample amount of sense. It’s much easier to get a job or experience when there isn’t as much competition around you. This goes for overall work, too.

If you are attempting to build your way up a ladder or grow in your career, you may be better off in a smaller company. If you are not surrounded by 500 workers attempting to garner the same supervisor’s attention as you, you are more likely to gain it. It’s simple math. Therefore, if you are starting out or want to climb the ranks quicker, smaller companies are better for you.

Large Company – Financial Security

Like the last pro, this one seems like a no-brainer, but it must be noted. Larger companies offer more financial security for their workers. You almost never have to worry about a juggernaut of a business going down or reducing paychecks. You never have to worry about a substantial business forgetting your weekly check or not being able to give you a full-time schedule.

If you are truly worried that a small company may go under or have significant cuts, you are better off at a larger and long-running business. Small, private businesses go under at an exponentially higher rate. That’s the nature of small businesses versus corporations, after all.

At the end of the day, we must note the irony in this statement. We just got done noting that colossal companies were making the majority of labor cuts over the last year, especially in the tech sector. That continues to be true, but it’s a rare occurrence. Overall, bigger jobs are often more financially secure (when we aren’t facing a layoff contagion).

Though layoffs are happening in larger companies, they are still more likely to provide unemployment or severance pay, which still counts toward higher financial security.

Small Company – Direct Outcomes

If you are the type of worker that needs to see a project through from start to finish, you may be better off at a smaller company. With colossal companies, you may be part of a machine. A cog that connects to a plethora of other moving parts, so to speak. You may finish a task, hand it off, and never see the outcome of it.

Let’s say you work in video game development. You may create an animation and hand it off to a different department. You may never see the fruit of your labor until the entire project is finished. As said, you were just one tiny (yet important) part of an overall function.

With smaller companies, you have more opportunities to work directly with outcomes. You may be asked to fill more responsibilities, being more important to production. You may be in direct contact with the other department, communicating and seeing the project through its various stages.

If you want to feel deeply connected to the product you are working on, you may want to opt for a company where you are not 1 of 1,000. You may want to work for a company where you are closely connected to all departments, working as one big team instead of a collection of tiny units.

Large Company – Benefits Galore

We live in tough times, especially related to health and mental health. Therefore, having an employer that offers you the benefits you need to survive in an expensive economy may be the breaking point for some applicants.

The increase in employee self-worth caused by the Great Resignation comes with an increase in demand. Employees aren’t willing to work at just any job, they want a career with forward-thinking attributes. They want incentives.

In June of 2021, Indeed reported that searches for hiring incentives per million job searches on Indeed jumped 131% compared to January 1, 2021. People are looking for incentives. People want extra time off for mental health, sign-on bonuses, health benefits, and so on. They are not willing to settle for less. And, that’s totally okay.

Overall, there’s a higher chance that a big company has the benefits you are looking for. Firstly, they have more money to spend on their employees, allowing them to offer incentives like sign-on bonuses and extra time off. Secondly, depending on the state, they are required to offer health insurance because they have more than X employees.

Simply put, if you need benefits, larger companies are better.

This doesn’t mean that smaller companies may not have the benefits you need, but the chances are higher with a more successful business.

Did you know that Goldman Sachs covers the cost of gender reassignment surgery for its trans employees?
It’s a little off-topic, but that’s pretty cool.

Small Company – Room to Experiment

Smaller workplaces allow for more creation and experimentation. Without the significant constraints of colossal work teams or high-demand production, you have the flexibility to work in other departments or create other productions.

For example, let’s say you want to try your hand in a correlated-but-different department. Let’s say you are a graphic designer but want to see or help work on copywriting. In a more personal company, this cross-training may be an option. The smaller company may have the flexibility to let you train elsewhere without the crushing demand of, say, Amazon.

Furthermore, you won’t have to jump hoops to other departments. You will be in closer contact with them. In huge companies, asking to experiment with a different department may take speaking to supervisors or higher-ups you’ve never even met. It can get messy.

There’s less room to flex and explore in higher-demand businesses.

Large Company – Predictability (Job and Schedule)

Much like financial security, larger employers have a higher chance of job predictability. We don’t necessarily mean being employed in general, cause firings and layoffs can come from surprising places. We mean schedules and job activities.

If you want to check in and check out of your job, knowing everything you are going to do that day without surprises, you will be better off at the well-oiled machine that is a corporation.

At smaller businesses, you may be asked to fill in for other departments, work late to meet tight deadlines, or do activities that weren’t on your schedule. There are fewer workers and production methods, creating a less predictable workplace.

Some people love the unpredictability of more personal workplaces. Some don’t. It’s all preference.

Small Company – Easier Culture and Smaller Team

A smaller company equals a smaller workforce.

There you go. Onto the next pro.

Jokes aside, smaller companies make for more personal experiences. If you want to feel like a tight part of a team and company culture, you might choose to stay away from a company with thousands of workers. In a smaller business, you are more likely to feel heard and seen, having a higher impact on the movements and decisions within the company.

To most, having close-knit relationships with fellow employees is a crucial part of loving a job.

Excerpt from Work Friendships – Are They Important for Employee Performance?

global study by the International Social Survey Program (ISSP), proved the improvement in production, stating, “Interpersonal [work] relationships have a sizeable and significant positive effect on the job satisfaction of the average employee. [Relationships] rank first out of…12 domains of workplace quality in terms of power to explain variation in job satisfaction.”

According to a study by the Atlantic, having a friend that you see on most days has the same positive effect on happiness as earning a significant pay raise. They considered working with a friend on most days to be the psychological equivalent of earning $100,000 more each year. And, according to LinkedIn, 46% of professionals believe that work friends are important to their overall happiness.

The numbers don’t lie, check the scoreboard. On paper, friendships should increase productivity and workplace happiness significantly.

Creating these close relationships with both peers and supervisors is less likely with large workforces.

Large Company – Better Resume

This pro may come off as a little strange. In fact, it is a little strange. It’s often seen as taboo to choose a job with the intent of finding the next job in line, but it makes sense for those attempting to carve out a successful career.

Ultimately, working at a more notable company looks better on your resume.

There are extreme specifics to this being a pro, but they must be noted. Let’s say, for example, that you are just starting out in your career. You are struggling to find a job in your field but receive an offer for a junior role at a well-known corporation. Working for that company or specific role is probably not your endgame, but it would look great on your resume. It will help bolster your resume more than the smaller company with the same role.

We don’t ever recommend starting a job with the intent of leaving it, for job hopping is one of the biggest resume no-nos. But, let’s be realistic, sometimes you take a job knowing it’s just a stepping stone or temporary role. As long as you aren’t taking a new job every month or year, everything should be fine. If you decide to work at a company for, say, 2 years with the intention of gaining experience for another, bigger role, that’s okay!

Overview: Large or Small?

It depends!

Not the definite answer you were looking for? I’m sorry.

Overall, picking your next employer requires a multitude of factors and decisions, too many to write or qualify here. You may be pulled to a company due to an increase in pay, benefits, or responsibilities, regardless of team size. It truly depends on you and your current career path.

Ultimately, if you are looking for stability and insurance, you are probably going to be pulled toward and big corporation. If you are looking for a place to make your own and grow your craft, you may be better off in a more personal situation. Though, even those pros depend on the exact companies.

Regardless, follow your gut and your overall needs. Make a list for yourself, stating the pros and cons of the specific companies or jobs. Think it through, but stick to your guns. Once you make a decision, stick to it, unless something significant changes.

We did write an article about what to do when receiving a better job offer, though.