Employment in small companies vs large companies: What’s the difference?

The professional services employment market is lively and competitive, giving candidates plenty of choices when they seek a new job.

A consideration for many recruits during a job search is whether they’re better off working for a large company versus a small company.

While the answer will be different for each individual, companies should play to their strengths to ensure new hires fit the culture of a workplace, which can lead to better morale, staff retention and productivity.

Here are the pros and cons in six key areas where small companies and large companies differ in their employment offerings and opportunities for candidates:

Remuneration and employee benefits

In a competitive employment market, salaries for professional services staff at every level tend to be more generous in large companies.

If quality candidates are in short supply large companies might tip the balance in their favour and outperform small businesses with more resources and excellent benefits packages. Private health insurance, company vehicles, salary sacrificing and discounted services can all be put on the table to sweeten an offer to a sought-after candidate.

A smaller company may sometimes seem to offer less up front with fewer benefits and limited resources but can be more open to flexible remuneration such as bonus or commission structures, profit sharing, pay dividends or an ownership stake in the company.

Flexibility and work-life balance

Offering a work-life balance which maximises both productivity and the needs of staff is an issue faced by businesses of all sizes, it's not just a question of big company vs small company.

Traditionally small companies have been able to offer more agile solutions, but many large organisations have introduced measures to bring about greater flexibility and benefits for parental leave, return-to-work and part time arrangements. Thanks to the booming employment market, employers at all levels have had to step up and ensure they’re able to attract job seekers through better overall working packages.

Large companies typically might have clearly defined policies, certain advantages and contract clauses such as allowing an employee to work a certain number of hours per week from home, or altered start and finish times to accommodate childcare arrangements. They may also tend towards requiring a fairly consistent number of hours from employees each week, with extra hours paid as overtime. The down side can be less flexibility outside the agreed parameters of a contract or an HR policy, so altered requests for flexible hours are harder to accommodate.

A small company might require more flexibility from their staff at times, but a closer working relationship with fewer employees means they’re potentially able to give more in return when it’s needed. A smaller team naturally has to band together to meet deadlines when the workload is high, so staff may find themselves working many hours some months but able to take time off or reduce hours when things are quieter.

Ultimately, work-life balance is something that will vary significantly between companies, with an organisation’s size not always an indicator of their approach to the issue or work environment.

Career growth

Discovering what a potential employee’s long-term career plans are can be a great indicator of whether they’ll be a good company fit.

Candidates who aspire to partnership or senior management in large organisations will be more inclined to value working for a company with a respected and well-known name. In large national or multinational firms, it can be easier to see a career path for progression and promotion up the ranks. Plus, big companies may offer structured mentoring programs to develop less experienced staff and expose them to networking opportunities with the senior members in their industry.

Being a small cog in a big machine isn’t for everyone, though, even if it’s a well-known one. A small company may not have brand names to offer and fewer opportunities, but they are frequently headed up by people who’ve come from larger companies or government backgrounds. This means they’ll have a wider range of experience to pass on.

Smaller companies can foster professional development opportunities and an employee’s broad business skills which could be transferable to business ownership or consultancy later in their career. They may also be appealing to job seekers who want to be on the front line, watching the outcomes of their work on a project.

Responsibilities and job descriptions

Job descriptions in small and mid-sized companies sometimes blur the lines and staff can end up performing multiple roles for the business. This is something which naturally occurs less in larger teams where roles are more narrowly defined and filled according to specific experience, qualifications and training programs.

For some staff, working to a broad description in a smaller company is a positive. It can offer more learning opportunities, new skills, opportunities to share new ideas, as well as heightened overall responsibility because they’ll have a greater stake in the success of their employer’s business.

A narrower description working within a large organisation can have benefits for employees who want to grow and specialise in specific job functions, an area or roles. Having a more defined job description and established systems can fast track career progress, as staff have the potential to be given more responsibility within their field as they master different tasks working with company leaders.

For recent graduates who aren’t yet certain of their career path, a large business can provide a range of different role opportunities and personal relationships which allow an employee to try out other jobs while maintaining continuous employment with one organisation.

Location and relocation of work

There is a fairly clear-cut difference between small companies and large ones when it comes to employee location and work environment.

In a small company, the location of work is often more limited. These organisations typically operate within a specific region or locality, and their scope of operations might be confined to a particular market. As a result, employees in small businesses may have fewer options for relocation or may need to be flexible in terms of commuting or remote work arrangements.

Multinational companies can present excellent opportunities for staff to change cities or even countries to experience different roles and responsibilities. Generally, a large company operates with more structured career paths, with the potential for promotions, transfers, and development opportunities. There is a negative, though: in a large corporation, relocations are sometimes expected if an employee wants to climb the career ladder, or if it benefits the company.

When considering the location and potential relocation of work, it's essential to assess personal preferences, lifestyle factors, and long-term career goals. Whether a candidate prioritises stability and proximity or seeks the flexibility and opportunities that come with a large company, finding the right fit depends on understanding the opportunities associated with location and relocation.

If a candidate is not keen on leaving their city they may be a better fit with a boutique or small business which operates locally and has no plans for expansion to other states.

Job security

Job security can vary significantly between small businesses and big companies, and it's important to understand the dynamics of each to make an informed career decision.

In a small company, it can sometimes be less stable due to various factors. These companies often face financial constraints, limited resources, less revenue and a higher level of vulnerability to market fluctuations. As a result, they may be more susceptible to economic downturns, which could lead to downsizing or even closure.

On the other hand, a large company often provide a greater sense of job security and more opportunities. Their established presence, robust financial resources, annual revenue, and diverse portfolio of products or services offer a level of stability and resilience.

A large corporation also typically has more resources to weather economic challenges, reducing the likelihood of sudden job losses. However, it's worth noting that even large companies are not immune to layoffs or restructuring, particularly during major organisational changes or industry disruptions.

Ultimately, it can depend on various factors, including the overall health of the company, industry trends, and individual performance. Evaluating the risks and opportunities associated with both smaller businesses and large corporations is essential in determining the level of stability that aligns with your long-term career goals.

Big company vs. small company summary

Assessing the overall fit between an employer and a job seeker, whether the recruitment is for larger companies or a small business, requires consideration and openness between both parties.

Working in small businesses often offers a closer-knit and collaborative environment where employees can have a greater impact and visibility. There may be more opportunities for versatility and growth as individuals take on multiple roles and responsibilities. However, small businesses may face financial and stability challenges, with limited resources and potentially less security compared to large corporations.

On the other hand, big companies provide more structured career paths, greater resources, and potentially more security, but may come with a more hierarchical and less agile work environment.

Candidates and employers must understand the benefits working for a small business vs. a large company can offer, and use these to attract not just the most qualified people, but ones who are likely to fit in, thrive and make a direct impact.