Pros & Cons: Working for Large Companies vs Small Businesses | FlexJobs (2024)

Much like choosing a college or city, choosing whether to work for a large or small company can impact the quality of your life. Choose a large company, and you may have endless opportunities for advancement. But, you may have to try hard to be noticed. Work for a small company, and there may be a greater sense of community and “family,” but you may stay “stuck” in the same position year after year.

There’s no one right answer for which is better. However, there are pros and cons to working for large and small companies to consider. Knowing these pros and cons can help you better target your job search and help make sure you don’t end up at a company where you don’t thrive.

Defining Large or Small Companies

Surprisingly, there is no official definition of “large” or “small” business. The federal government looks at a company’s average annual receipts or the average number of employees. The general cutoff for “large business” is having at least $7 million in annual revenue and 500 employees.

However, there are some exceptions that are mostly industry-dependent. For example, even if a manufacturing company has 1,500 employees, it’s still a small business. And, certain construction companies are small businesses, even with $20 million in revenue.

The Small Business Administration sets the evaluation criteria for small businesses. Like evaluating large business, there are criteria to determine if a company is small and the criteria varies by industry. Fortunately, there are guides to help an owner figure out if they are a small or large business.

That said, for some job seekers, defining “large” and “small” comes down to a matter of personal preference. For some job seekers, 45 employees would be a “large” company to them, and for others, 250 employees would be “small.”

Advantages of Working for a Large Company

No matter how you define “large company,” the fact is that large companies tend to have certain advantages you won’t find at smaller companies.

— Lots of Perks

One of the obvious benefits of working for a large company is that there are a lot of perks. For example, most large companies can offer a range of insurance options. This includes not only different options for medical insurance, but also supplemental insurance (like life insurance or even pet insurance). And, because the company is large, they are usually able to negotiate a better deal, which means there’s a good chance you’ll pay less out of pocket.

But, there are usually other perks at a large company, too. There may be tuition reimbursem*nt, on-site daycare, and even an on-site gym, restaurant, or dry cleaner. And, large companies are generally more likely to offer remote work options and flexible work schedules.

— Resources

Large companies can offer their employees “more,” because they have more resources. For example, large companies generally offer higher salaries and bonuses. They can also kick in more for the employer share of insurance and may be more likely to contribute to other perks.

And, thanks to these resources, employees have more access to more resources. This means that if you’re having technology problems, there’s usually an in-house support team to help you out. Or, they might just give you a new computer.

Large companies may also contribute more to your training. This doesn’t just mean internal training. It also means outside professional development. Large companies are happy to send you to conferences and training sessions so you can learn new skills.

— Opportunities

Working at a large company gives you many professional opportunities. For starters, you will have access to a larger network, which can pay dividends down the line.

And, your career path may be clearer. Most large companies have a specific set of rules for evaluations, raises, and promotions. You’ll know what you need to do to get to the next level. Because there is often higher turnover at large companies (yes, this can be a pro), there are likely more opportunities more often to advance your career.

In the event that you aren’t advancing quickly, want to try out a new job, or even just want a change of scenery, large companies tend to have more than one location—sometimes even locations around the world. Moving to a new office or a new position is often easy to do, giving you access to new locations, new people, and new opportunities.

— Structure and Order

Large companies tend to have more order and structure. If you’re the kind of person that thrives in a structured environment, a large company may be your thing. There are usually set training programs in place, so you learn all the things you need to do to get your job done. Training and policy manuals help guide you. And, there are almost always clear-cut procedures in place to help you make decisions.

— Stability

While any company can find themselves on the wrong side of the economy, large companies tend to be stable. The odds are pretty good that your position won’t suddenly disappear one morning. And, even if it does, there’s also a good chance that you’ll get a severance package if you are laid off.

As part of that stability, you can remain fairly certain that you will always get paid. While it is illegal to not pay your employees just because of cash flow issues, it does happen. However, large companies usually have access to cash reserves. So, you can remain nearly 100% certain that you will still get your paycheck no matter what.

Disadvantages of Working for a Large Company

Of course, just like any job, there are cons to working for a large company.

— Less Creative Thinking

For a time, “thinking outside the box” was a big trend in business. It encouraged original and free thinking to help employees and leaders come up with new solutions to problems, instead of doing things “as we’ve always done them.”

The truth, though, is that many large companies don’t like to think outside the box. Large companies are usually less open to change because they are risk-averse. While this caution helps maintain company stability (a pro), it does mean that large companies are slow to change. It can take forever to get things done thanks to the corporate structure, defined policies, and outlined procedures.

— Hard to Get Ahead

While one of the pros of working for a large company is the opportunity for advancement, that doesn’t mean it will come easily. Hard work may not be enough to help you get ahead. Success in a large company has a specific definition, and when you bring up your accomplishments in a performance review, if they’re not on “the list,” they may not count.

Working for a large company also means you work with a lot of people. This means that there is competition everywhere. When a manager is deciding which salesperson to promote, they will start with all of the people who hit the “goal” for earning that promotion. However, within that group, the manager will only promote those who did the most toward that goal and, if that’s not you, you probably won’t get the promotion.

— You’re Just a Number

Of course, a large company is big. You knew that going in. But, what you may not have realized is that when you work for a large company, it can be hard to feel seen as a person. Or, hard to feel like you and your efforts make a difference at the company. When you’re one employee of hundreds or even thousands (or hundreds of thousands), you may feel like a cog in a meaningless wheel.

Advantages of Working at a Small Company

So, either the cons of working for a large company are enough to scare you off, or you just know you’re a small-company kind of person. Like large companies, working for small companies has its positives.

— Nimble

Small companies are usually more nimble than their large-company counterparts. Because they’re often more specialized, when the market shifts, a small company is better able to shift along with it.

And, when economic circ*mstances change, or the business model is failing, small companies can “pivot” into something similar or something new if they have to.

— They Think Creatively

Small companies tend to encourage creative “outside the box” thinking and are more likely to embrace change and even radical ideas. While this may be due to a lack of resources, being able to apply creative solutions allows you to shine as an employee, and lets you test out theories and find answers quickly.

— Lots of Opportunities

At a small company, you’ll likely wear a lot of different hats. Working as the social media/content strategist/part-time customer service rep exposes you to a lot of aspects of the business and teaches you a range of skills you may not have had a chance to learn otherwise. Should you leave the company, you’ll have a unique skill set that other candidates may not.

There’s also a good chance you’ll work closely with company leaders, which can help you become a better employee because you’ll understand how business works on a level that others can’t.

— Community

One of the advantages of working at a small company is the opportunity to know all of your coworkers. In many small companies, there is a feeling of community and the chance to develop deep relationships. While these may not become personal relationships, they do give you more insight into your coworkers.

For example, if a coworker is tired and cranky, at a small company, you may know that it’s because they are experiencing a personal crisis (even if you don’t know the details) or because they just had a baby and aren’t sleeping. You might learn that someone leaves the office every day at 3:00 because of a physical therapy appointment or to volunteer at the animal shelter. Understanding these nuances gives you a deeper insight into the company and your coworkers, helping you become a better employee.

Disadvantages of Working for a Small Company

But, of course, with the pros, there are cons to working for a small company.

— Advancement Isn’t Easy

At a small company, you should have a job description. But, the odds are pretty good that you don’t have much else. Small companies don’t usually have a list of accomplishments you have to achieve before you get a promotion or even a raise. This means you may not have a clear road map of how you can advance your career or even what the next step at the company is for you.

And, because the company is small, there is likely less forward momentum in your career. You have to wait for someone to leave (which happens less often in a small company), or hope that someone creates a new position (which also doesn’t happen often). And, while you may get a title change each year, if your job duties aren’t changing, you aren’t really growing professionally.

If you aren’t happy with your position or how quickly you’re advancing, you don’t have a lot of options beyond leaving the company. Moving up or even sideways may mean leaving the company for those opportunities.

— Fewer Resources

Even stable and long-lived small companies have fewer resources. They tend to generate less revenue, which means less cash to go around. That may mean that your technology is older or not the latest version—and that can include operating systems and software.

And, fewer resources also means you’ll get less professional support. While there may be some internal training, there is likely very little outside training. There might be a small training budget, but it may not allow you to attend outside training very often.

— Fewer Benefits

Having fewer resources can also mean fewer benefits. For starters, not all small companies have to provide health insurance. That means the company may tell you to purchase health insurance through the government. And, while some companies may offer you a small stipend to help defray those costs, not all companies will.

If your small company does offer insurance, the odds are pretty good that you’ll have to pay more out of pocket. Small companies aren’t able to bargain as much with insurance companies, so the “deals” typically aren’t the best. And, you may not have a choice of plans and instead have only one insurance plan option.

Most small companies also don’t offer additional insurance options, like life or disability insurance. Some don’t offer retirement plans (with a salary match) or any of the other perks you can find at large companies (like tuition reimbursem*nt). You’re also less likely to find small companies that offer remote work or flexible schedules.

— Less Security

Small companies can be unstable. Even a company that’s been around for 50 years can suddenly find consumer tastes have changed or that their biggest account left.

— Less Policy and Procedure

Small businesses tend to have less formal policies and procedures in place. While this is a pro for some people, there are those employees who feel lost without it. And, even for employees who consider a lack of formal policy and procedure a pro, not having certain policies in writing can make work difficult. How do you know when you need to go to HR with an issue? And, if they don’t have a formal policy, how does HR make decisions?

Finding a Job at a Small or Large Company

Choosing to work for a large or small company is a personal choice. But knowing the pros and cons can help you decide which type of company is right for you and your career.

Whichever option you choose, FlexJobs partners with companies of all sizes, ranging from Fortune 100 to small businesses, to post remote and flexible jobs. Regardless of your needs, we’ve got you covered.