Working at a Big Company vs. Working at a Small Company

I have spent the vast majority of my career at big companies. Working for big companies has its perks, but many downsides as well. On the flip sides, small employers have many perks, but some drawbacks. Here are some differences of big companies vs. smaller ones as an employee.

Working-at-a-Big-Company-vs-Working-at-a-Small-Company

Big Company Perks

Better Pay – If your top priority at work is a big paycheck, you will do best to look at a big company. One study found that average pay at businesses with 20 employees or less was $36,912 per year, while large firms pay an average of $52,554. If you are in a management position, the variance is even bigger.

Great Benefits – Health insurance plans get better and cheaper with scale. While Obamacare brought marketplace style insurance to employees of small businesses, you still save money and get better care with big company insurance most of the time.

Career Mobility – If you like the job security of staying at one company for a long time, you can move around inside of a big company without leaving. Each large company today has people in a wide variety of roles, and you may be able to leap between groups without leaving your employer.

Survive Under the Radar – If you don’t have C suite ambitions, or management level ambitions, you can survive at many larger companies without making waves. At a big company, you have to work hard to standout. If you just keep to yourself and get the work done, you can get by and avoid some of the stresses of high visibility projects. In a way, this leads to better job security.

Big Company Drawbacks

Bureaucracy – I have to admit that at most companies I’ve worked for, getting anything substantial done is very difficult. Something as simple as upgrading to the new version of Microsoft Office can be a seven-year approval cycle – I know people still using Access 1997 at my office.

Restrictive Rules – That awesome new productivity tool that could save you hours doing your job? Forget about it. Corporate rules usually forbid using unapproved software, dressing informally, and on and on and on.

Hard to Get Noticed – Do you want to be the boss? While you can live under the radar in corporate America, moving up can be a challenge. I led a project that generated $100 million in free cash flow per year in an old job, and the CFO had no idea who I was when we met. That is typical.

Small Company Perks

Small Business Management - PersonalProfitability.comFlexibility – At a small business, you don’t have seven layers of management above you to approve things. Having just one or two people above you makes it easier to get things approved or to change the status quo.

Visibility – When you work, it makes a difference. People notice. Everyone probably notices. Your boss, THE boss, your co-workers. But on the flip side, if you do a bad job, they don’t stop noticing.

Adaptability – Did you discover a great new way to do something? You can do it. From idea to implementation is a quick turnaround. No need to wait for a 3,000 person IT department and the VP of whatever and the director of this, that, and the other to approve.

Small Company Drawbacks

Working at a Big Company versus a Small Company - PersonalProfitability.comHigher Risk – If you work at a Fortune 500 company, you can rest assured that the company will still exist for a long time unless it is acquired by another big firm, in which case you will likely have plenty of notice that the company is going away. Small businesses can close one day and not re-open ever again.

Fewer Formal Procedures – If you like structure, such as a set in stone human resources policies or formalized bi-annual reviews, you might prefer looking elsewhere. In small companies, much of the corporate backup functions you may be used to are all done by one or two people, and they do not have hundreds of pages of documentation on every decision and policy.

Compensation – I already mentioned that you likely get paid more at a bigger company, and get bigger benefits. But there is more to compensation than that. At big companies, you will likely get other “compensation package” perks like gym memberships, stock purchase plans, discount plans, and maybe even stock options. At startups you could get options (that may or may not be worth anything), but at other small companies you just get a paycheck.

Find the Right Fit for You

The culture of big and small companies can be very different, and your preferences for working may lead you to prefer one over the other. That’s totally fine! I have always done well in big companies, as I can quickly prove my value by adding efficiency to bloated finance and accounting processes.

But that does not mean I am not tempted by small business perks from time to time. The key is finding out what you prefer and going for it.

How do you prefer to work? Do you have any big company success stories, or horror stories? How about small company stories? Please share in the comments.

First published March 13, 2009. Updated September 14, 2015.

4 thoughts on “Working at a Big Company vs. Working at a Small Company”

  1. Tony @ Investing Track

    I think it depends on what stage in life you’re in. If you’re a young, single guy, then joining a small company is probably the best thing to do. You learn a lot more from working at a small company because you’ll need to wear many hats and make many important decisions.

    But if you’re married and settled down, joining a big company that’s less stressfull is probably a good idea.

    1. That is an insightful comment Tony. I thought something similar when I recently read the article about employment at Amazon. I started with big companies, and have rarely been in a job outside of the Fortune 500. I wonder if my career might have been different had I gone to a small company out of college.

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