Job Security: Large or Small Companies?

In the seemingly endless days of this challenging economic climate, job security and stability are rising factors when making career choices for many job seekers. The question is where to find it and how to best secure it?

A prevailing myth is larger companies offer better career opportunities, pay, benefits and stability. This assumption bears closer scrutiny. In the tech sector for instance, tier one players like IBM and HP have been and continue to manage the head winds of sector maturity with rolling rounds of outsourcing and layoffs. Pay is stagnant, growth opportunities present mostly as a result of attrition and benefits are eroding. Many large financial institutions and big pharma are experiencing similar challenges.

In addition, larger companies are more often subject to heavy regulatory constraints. This slows the pace of innovation and burdens employees with responsibility for documenting the majority of business process activity.

job security in small companies Further, the sheer scope and complexity of projects at large companies and institutions often requires breaking initiatives into small components, removing big picture visibility and impact and generally leading to high degree of employee-skills specialization.

Lastly, when the cuts come, they are often made by people ‘far removed’. The results can be alarmingly political/arbitrary.

In many cases, specialization and sequestration 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 sometimes find themselves out of work, possessing skills and experience that don’t necessarily take them to desirable places.

An odd brand of ‘stability’ for sure.

On the other hand, let’s take a look at the apparently 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 their larger kin.

However, this unattractive reality is greatly mitigated by several important factors. For example, small companies are generally formed leveraging recently innovated, more efficient business models and technologies. Employees at smaller companies frequently gain valuable experience working with advanced models and tools. They also gain important experience seeing and experiencing how their contribution fits into the company’s overall value proposition. They contribute ideas and 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 happens, their skills and work experience are highly relevant to the sector of the market where job creation is greatest…other small companies. (Statistically, big companies are not drivers for job growth…small companies are…!)

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.

In the end, it is your decision to decide where that tool box may be best acquired. There are no absolutes in this thing called career management. However, it will serve you well to keep the door open to opportunities at companies, large and small.