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David or Goliath: Should you work for a big or small business?

An 'open' sign on the front door of a business

At a glance

  • Traditionally, big companies offer robust benefits packages, better insurance options, clearly defined roles, and opportunities to travel and experience career progression.
  • Smaller companies often offer more flexible working arrangements and greater access to all aspects of an organization’s operations.
  • Big companies often offer higher compensation than small businesses, as well as opportunities for bonuses or stock options.
  • Prepare for a dynamic business career with online business degrees, including two MBA programs, at University of Phoenix!

Whether you’re just starting out in your career or you’re planning your next move, the career marketplace invariably presents job seekers with a difficult choice: Go with a large, established company, or take your chances in a smaller business or startup.

Having worked for both types of employers during my career, I’ve found each can be highly rewarding. Both offer opportunities for career growth under the right conditions. Choosing the right option is a matter of understanding the differences between them and how they fit your personality and your career goals.


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The differences between large and small companies are sometimes (but not always) clear cut. While large companies tend to offer more robust employee benefits, such as workers’ comp insurance, health insurance and better retirement plans, for instance, some smaller companies and startups make the conscious choice to invest heavily in employee benefits programs that are highly competitive.

So, while the trade-offs I talk about in this article are common, understand that they are not universal, and there are many great examples of businesses large and small that break the mold. Rather than think of the pros and cons of small and large companies as stark differences, we’ll examine the trade-offs typically faced when choosing an employer.

Opportunity for impact vs. resources and support

In large corporations, you’ll generally find abundant resources to support you. Your interview process may put you in front of half a dozen or more prospective colleagues or managers. Your first day will include a heavily planned and process-driven onboarding experience. It’s not uncommon in very large companies to go through weeks of training and orientation before you really get down to doing the job you were hired for.

Once you’re in your role, you’re likely to find the handbook for your job is highly detailed with processes predefined for you and your weekly, monthly and quarterly success metrics clearly articulated. Many professionals feel secure and confident in this environment, as it provides a sense of security in the knowledge that, if you do the work in the right way and hit the success criteria, you’re doing a good job and may even see advancement opportunities come your way.

A trade-off for resourcing, support and clarity in a big company is opportunity for impact. As one of many doing a highly scripted job, it can be hard to stand out and can lead to a feeling that you’re one cog in a big machine.

By contrast, smaller companies typically rely on workers at every level to be more independent, develop their own processes and solve problems on the fly. Creativity is essential in small businesses and startups, and those who like to find their own way or exercise creative license in their work tend to enjoy the freedom and flexibility that comes with having a more nebulous role.

At the same time, I’ve seen how those who rise to the challenges of the business stand out easily in a small company.

In my own career, I’ve seen many smart, motivated young workers rocket straight from entry-level roles in startups to directing growing teams on the basis of their initiative, creativity and boldness. In more mature small businesses that are less growth oriented, however, it can be easy to get stuck at a career ceiling unless someone in a more senior position leaves the business.

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Insurance and benefits packages vs. flexibility

Big businesses buy employee benefits in bulk, from health insurance and retirement plans to child care and even vacation club options and gym memberships. As a result, larger companies are generally able to offer much more robust benefits packages and insurance options to their employees and at a lower cost than a small business. It’s not uncommon for employers at a smaller company to have to pay out of pocket for health insurance or a lesser employee benefits plan. While some smaller businesses are joining professional employer organizations to increase their buying power, this rule of scale still holds.

While smaller employers struggle to compete on the overall employee benefits package offerings, they frequently compensate by offering perks like more flexibility in working conditions, allowing employees to work remotelydetermine their own hours and take vacations more flexibly. These differences have become less clear in recent years, particularly through the pandemic era. But in the first quarter of 2023, a number of larger companies were ordering workers to return to the office or face termination.

Meanwhile, smaller companies can sometimes offer flexibility that is difficult to exercise in practice, such as “unlimited vacation days” you can never actually take because there’s nobody to pick up the slack if you’re out for a week. Why leave, after all, if everything will fall on your shoulders when you get back?

Exposure to the business vs. exposure to the world

Compensation can be a big differentiator between these types of businesses. Big companies are often able to pay employees higher and more competitive salaries, as well as offer opportunities for bonuses and stock options. But large and small employers offer exposure to business practices and exposure to the world in very different ways.

In a small business, unless you’re in sales, you’re less likely to find yourself traveling the world, but far more likely to find yourself interfacing with every aspect of the business at every level of seniority. When you’re one of fewer than 100 people in a company, you might see the CEO daily and enjoy frequent opportunities to work with other senior leaders in multiple departments.

Because small businesses have fewer interdepartmental barriers to communication, you can learn a great deal about how your role intertwines with those of others in different parts of the company. This low-barrier environment provides regular opportunities for learning and professional development to people who enjoy thinking outside the boundaries of their own role and want to be part of the bigger picture.

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Larger employers tend to be so bureaucracy-bound that workers often stay within the confines of their own department. In some big corporations I’ve worked with, a single office building can house just one department, and the typical worker interacts with few outside their team (and seldom sees the CEO but from a seat in an auditorium during major company events or during a webinar broadcast).

While this scale can make it daunting to get a view of the larger business, it sometimes comes with the perk of being able to travel extensively. One large software company I’ve worked with regularly flies employees internationally to collaborate on major initiatives with their colleagues overseas, which is a benefit smaller companies generally can’t afford. Other companies have been known to reward high performers with team-building trips in some pretty desirable locations. (Aloha, Hawaii!)

Chart your path

As you explore your options in the job marketplace, it’s important to assess your wants and needs relative to the opportunities in front of you. You’re sure to find outliers, such as small startups that have invested heavily in big-ticket benefits plans or large companies that strive to keep teams agile and autonomous. Keeping these factors in mind, you can ask probing questions through the interview process and better assess which company is right for you.

ABOUT THE AUTHOR

Robert Strohmeyer is a serial entrepreneur and executive with more than 30 years of experience starting and running companies. He has served in leadership roles at three successful software startups over the past decade, and his writing on business and technology has appeared in such publications as Wired, PCWorld, Forbes, Executive Travel, Smart Business, Businessweek and many others. He lives in the San Francisco Bay Area.

 

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