Career Stability: Working for Large or Small Companies

By | 2018-08-29T16:32:54+00:00 May 17th, 2018|Career Articles|

For many candidates company stability and, by extension, career stability is rising as an important factor when making career choices. If this issue is important to you, the question you may be asking is how to best identify and secure something as elusive as stability?

A prevailing myth is larger companies offer superior career opportunities, compensation, benefits and stability. This myth bears closer scrutiny. In the tech sector for instance, tier one players like IBM, HP, Dell, and Unisys continue to manage the head winds of sector maturity with ongoing divestitures, acquisitions, staff outsourcing and layoffs. Pay is relatively stagnant for all but the top 5-10% of performers, growth opportunities often present as a result of attrition and benefits are under pressure. Many large financial institutions and big pharma are experiencing similar challenges.

Further, large multi-nationals are often subject to mature market stagnation and regulatory constraints which can greatly slow the pace of innovation. Without innovation, business performance improvement frequently comes from cost containment, which can take on many forms, including layoffs and job eliminations.  Proposed organic initiatives worth doing (initiative large enough to have an impact on a large company balance sheet in the near term) are few and far between. Rather than investing internally, companies often see a higher rate of return through M&A activity. This keeps the financial folks busy, but is not much fun for the rest of the team responsible for rationalization, elimination of redundancies and integration of processes and cultures. Further, the sheer scope and complexity of organic projects that do meet the high vetting standards of large companies often require atomization of project elements, removing big picture visibility and impact for individual contributors. This often leads to high degree of employee-skills specialization.  

Lastly, when the cuts arrive, they are often made by people ‘far removed’ from all the good things an individual has been contributing. The results can be alarmingly arbitrary decisions about who stays and who goes.

In many cases, specialization of skills obtained while employed at large companies render affected workers to be most suitable for positions with other large companies, typically in similar sectors. However, large companies often behave in herd fashion…with hiring and work force reductions highly correlated (over time). Affected folks from HP find it challenging to get hired at IBM when Big Blue is also on a freeze or laying off.

Whether caused by the creation of disruptive new technologies, new and innovative business models or macro-economic conditions, it makes little difference. People working at large companies sometimes find themselves out of work, possessing skills and experience that don’t necessarily place them in a position to effectively compete for similar pay in a new position.

The writer, a 25+ year career Technical Recruiter (including significant time as both an IT Recruiter and an Engineering Recruiter) suggests this might be considered an odd brand of ‘stability’.

On the other hand, let’s take a look at the purportedly less stable world of smaller companies and start-ups. For sure, statistically these companies do come in and out of existence at a much higher cadence than larger, more established firms.

However, this unattractive reality is mitigated by important factors. For example, small companies are generally formed leveraging recently innovated, more efficient business models and technologies. Their employees gain valuable experience working in and with these advanced models and tools. They also gain important experience (and satisfaction) seeing their contribution fit into the big picture of the company’s overall value proposition. They contribute ideas and frequently have them heard and sometimes acted on…because the person with the power and authority is often right down the hall. When the company grows, their responsibility and wages often grow with it. It is also enjoyable to be associated with ‘green shoot’ business activity…when something is young and discovering its’ place in the world.

If the untoward job elimination happens, their skills and work experience are often more relevant to the sector of the job market where job creation is greatest…other small companies. (Statistically, big companies are not drivers for job growth…small companies are…!)

Career Stability: Working for Large or Small Companies

The single most important factor for job security is possessing market relevant skills and experience, which can be best acquired at smaller organizations.  Career stability is about you and the tool box you bring and its’ relevance in the job market. Career stability is not about the company for which you work. If your skills are out of date, no matter where you work, you are at risk.  

In the end, it is your decision to decide where your tool box may be best acquired. There are no absolutes in this thing called stability in career management. However, it will serve you well to keep the door open to good opportunities regardless of the company size.

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