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Working for a large company vs small company: pros and cons

November 14, 2022 - 12 min read

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Defining a small company versus a big company

What are the pros and cons of big business?

Strengths and weaknesses of a small business

Making a choice

Choosing a workplace is a big decision. You’ll spend a third of your life in the workforce, meaning you’ll want to choose a work environment that checks as many boxes on your workplace wishlist as possible. 

From work-life balance to health insurance, every company offers employees a unique set of perks. You’ll have to weigh them carefully to see which you value most.

A company’s size heavily impacts what’s available to you. Working for a Fortune 500 is a vastly different experience from working at a small startup. In Fortune Magazine’s top 100 workplaces, you’ll find large organizations that can give you unlimited sick days and offer student loan repayment assistance.

But if you work for a smaller company, you may forego these perks in favor of an innovative work environment, small teams, and quick promotions.

Only you can decide which company size best fits your career goals, personal values, and life situation. But to help you weigh your options, let’s compare the benefits of working for a large company versus a small company.

Defining a small company versus a big company

Companies come in all shapes and sizes. Some are multi-national conglomerates with thousands of employees worldwide, while others have as few as three workers. 

These variations make companies difficult to categorize. According to the U.S. Department of State and the U.S. Small Business Administration, what constitutes a “small business” depends on the industry:

  • Agriculture: No more than $750,000 in average annual revenue

  • Trade contractors: No more than $12 million in average annual revenue

  • Construction: No more than $28.5 million in average annual revenue

  • Retail and service: No more than $6 million in average annual revenue

  • Wholesale trade: No more than 100 employees

  • Manufacturing and mining: No more than 500 employees

If an organization exceeds these limits, they’re no longer considered a “small business” in the eyes of the U.S. federal government — they move into the realm of medium to large institutions. 

Medium businesses differ from small ones because they can generate up to $1 billion of revenue and employ somewhere between 150–1,500 people. 

A large business is any organization that holds enough market share to influence its industry. Large companies like Apple and Google cater to many consumers in the U.S. and shift market trends. They also have a large number of employees worldwide, from assembly-line workers to C-suite members, and generate massive revenue. 

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What are the pros and cons of big business?

Larger companies could be a great next step on your career path. Here are some of the pros and cons of working at such an organization.

Pros of working at a large company

1. You’ll receive better perks

Large companies can usually employ thousands of employees around the world. This helps them negotiate better deals with insurance companies, resulting in lower prices for more generous benefits packages, including health insurance, dental, and eye care. They can also match your 401k contributions so you can live comfortably long after retirement.

Plus, their big office buildings may also have on-site childcare, gyms, cafeterias, or even dry cleaners. If you prefer working from home, larger companies can offer a stipend to fund your remote workspace when you’re not on-site.

2. They have resources to spare

These companies have large revenue streams, which allows them to spend a bit extra on providing tools to employees. Whether you need a new stapler, laptop, or company car, they can help set you up for success.

Large organizations usually win out when comparing small companies versus large companies’ salaries, too. They have bigger budgets to accommodate employee payout. And not only can they hand out end-of-year bonuses, but they may give you company stocks that pay dividends.

3. Professional development opportunities are abundant

Even if you start in an entry-level position, large corporations often have training programs to help you move up the ladder. If you feel like jumping departments, you can learn new skills to become anything from a project manager to a human resources worker.

4. You’ll enjoy better job security

No organization is immune to layoffs. But a big company that provides a vital service is less likely to downsize during major economic events like a recession. If you're raising a family, you might value this kind of stability.

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Cons of working for a large business

1. They’re risk-averse

Lack of creativity is one of the most significant weaknesses of a large business. They often have autocratic structures with rigid policies and procedures. This helps them maintain stability (which is a good thing), but it can keep them away from the bleeding edge of their industries. 

2. You’re a small cog in a large machine

On the one hand, big firms have far-reaching impacts in their respective sectors. You may enjoy feeling part of something so much larger than yourself, even if your contribution is a small one. But the strict hierarchies and narrow job descriptions could be stifling. You may instead prefer having a more direct impact in a smaller company.

3. Career progress is incremental

One of the pros of working at a large company is career development, but progress can be slow. It could take up to a year to earn a higher salary and up to five years of full-time work before they promote you to a new job.

Strengths and weaknesses of a small business

If you’re considering a small firm for your next job, consider these pros and cons.

Colleagues-brainstorming-in-a-start-up-office-benefits-of-working-for-a-large-company-vs-small-company

Pros of working at a small business

1. You’ll have more opportunities to grow

Whether you’re a recent grad or a seasoned professional, small firms have ample opportunities for you to expand your skill set. It’s hard work, but joining a small team means you can take on more responsibility and become deeply involved in the company’s day-to-day operations — something you can’t do at big organizations like Amazon or Facebook.

2. They’re adaptable

If large corporations are tanker ships, small companies are speed boats. These mini-operations can turn on a dime, making them adaptable in rapidly-changing markets. This makes them ideal for job seekers who want to stay on the industry’s bleeding edge.

3. You’ll have a bigger impact

Smaller organizations often have flat corporate structures, meaning you’ll be part of important conversations about the company’s future. You can use your expertise to influence major business administration decisions.

4. You can flex your creativity

Because these companies move quickly, there’s less time to micromanage and adhere to strict rules and procedures. This gives you free rein over your job, so you can execute your responsibilities as you see fit.

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Cons of working at a small business

1. Unpredictable working hours

Very little compares to the rush of keeping a company afloat and pushing for larger growth margins. But, as you struggle to beat the odds and make your small business succeed, you may struggle to keep a healthy work-life balance. Over time, the stressors can add up and negatively impact your mental health.

2. Fewer employee benefits

While small companies do offer benefits, their packages won’t be as generous as those at larger organizations. You may have to pay out of pocket for certain health procedures and find a gym membership on your own. The ceiling for your earning potential might be closer, too, if the company operates on a tight budget. 

3. Constantly changing workflows

As the company grows, so will your job. This is an exciting opportunity to stretch your skills and contribute to something new. But it also means the nature of your work is constantly changing. Even if you start as a lowly coder, you may quickly find yourself managing a team of people with similar skills.

This kind of environment favors those who are adaptable and can think on their feet. Otherwise, the shifting nature of your job can be a source of stress.

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Making a choice

These drawbacks and benefits of working for a large company versus a small company don’t apply to every organization. Some small institutions may have great company benefits, and big companies could have terrible work hours. As you go through the interview process, do your research to learn as much as you can about a role before accepting. 

As you consider the pros and cons of a job or company, it’s worth identifying your dealbreakers. If you value both work-life balance and creativity, consider what you’re willing to sacrifice to ensure you have these in your ideal job.

And you may have to make this calculation in consultation with other important people in your life. If you're joining a startup while raising a young family, your partner may have to accept your erratic work hours and absent evenings.

These aren’t easy decisions. But with patience and self-reflection, you’ll choose what’s best for you and your career.

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Published November 14, 2022

Elizabeth Perry

Content Marketing Manager, ACC

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