Pros and Cons of Working for a Small Company

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Job searching is a numbers game. The more resumes you distribute, and the more you network, the better chance you have of landing interviews, and a job. To successfully find employment, you need to target a wide range of employers. That means considering companies of all sizes, from global enterprises to small firms.

Many candidates seeking employment ignore smaller employers and focus their efforts on larger firms. Find out why this can be a mistake, the benefits of seeking employment with small companies, the pros and cons of working for smaller organizations, and how to find small companies with job openings.

The Benefits of Small Companies

Small firms may be in a better position to hire you, and there are more of them. According to the U.S. Small Business Administration, small businesses represent more than 99.7% percent of all employers. They also employ nearly half of all private-sector employees, pay 40.3% of the total U.S. private payroll, and have generated about 65% of net new jobs over the past 20 years.

Small companies tend to be nimble. They may have business plans progressive enough that they can succeed regardless of how the economy is doing. Also, small firms usually don't have high overhead like big companies who are burdened with fancy addresses and designer lobbies.

Pros and Cons of Working for a Small Company

Pros
  • More visibility

  • Wide-ranging experience

  • Increased flexibility

  • Work friends

  • A stepping-stone to larger things

Cons
  • Fewer perks and benefits

  • Limited growth

  • Unknown culture and reputation

Pros Explained

Being employed by a small-sized company offers many benefits to your career:

More Visibility

Work roles at small companies are often less specialized than at large firms. That means employees get to wear several hats, interact with staff more often, and are afforded a 360-degree view of company-wide operations. Plus, in a smaller organization, it's easy to interact with C-suite executives and the decision-makers. Because employees have more visibility, it is often easier to advance in a smaller organization.

Experience in a Variety of Areas

Because you're wearing many hats, you're likely to gain knowledge and insight beyond your role. Small company employees often gain multiple skills and areas of expertise to enhance their resume.

Increased Flexibility

Small firms may also have more flexibility when it comes to considering alternative work arrangements such as flextime and job sharing. The dress code may also be more relaxed.

Your Co-Workers May Be Your Friends

At smaller companies, it's common to form deep bonds with your colleagues. Collaboration opportunities abound since employees are so likely to do work that goes beyond their job description. 

It Offers an Entry-Point to the Industry

Working for a small company can be a good stepping-stone to a larger employer in the same field.

Cons Explained

But it's not all rosy. Here are some potential downsides to employment at small companies:

There May Not Be Many Career-Building Perks

Small firms may have fewer formal training programs, and their benefits packages can be more limited. Some HR processes (like maternity leave policy, for instance) may not be set up, which can be challenging.

Sometimes, Your Growth Will Be Limited

The option to transfer to other departments may be limited or non-existent. You may also encounter less opportunity for growth and promotion at a small firm. There will likely be fewer people who can serve as mentors. Plus, at a smaller company, if you do not get along with your co-workers, avoiding them may be difficult. 

Smaller Companies Can Be Unknown Entities

A large company often comes with a known workplace culture and reputation. That can be helpful when you apply to your next role—recruiters and hiring managers will be familiar with your current company. With smaller employers on your resume, you may find yourself spending time in your interview explaining the company, rather than talking about your accomplishments.

In general, if you prefer structure ahead of flexibility, a larger company may be a better fit. 

How to Find Small Companies

To find smaller firms in your field, look at these resources:

  • Inc. 5,000: If you want to target small firms, the Inc. 5,000 list is a great starting point. The entire list is accessible for free online and updated annually. You should also do some research on your own because you never know when the tide will turn and a company will downsize, relocate overseas, or go out of business.
  • Vault.com: The site has a searchable database of companies as well and is worth looking at. Job seekers can look up a company by name or search by industry, city, state, country, the number of employees, and revenue.
  • Local resources: Other resources for identifying small emerging companies include local chambers of commerce and the business section of your local newspaper. Information on new companies and updates on local businesses are typically published regularly. There are also a variety of job sites that focus on local listings you can use.