Looking for a new job? Go where the hiring is. OK, so where is that?
It’s not GM in Lansing, Michigan which recently laid off 1,100 plant workers. Nor is it Boeing who convinced 1,880 union workers to leave voluntarily. Pepsi is cutting jobs in Philly as “sales lose fizz after soda tax.” Fidelity Investments is offering buyouts for older employees. Caterpillar announced another round of layoffs in the wake of a worsening outlook for 2017 – on top of the 10,000 positions eliminated per their late 2015 announcement. The list goes on and on.
What do these all have in common? They are large firms. Yet our last official national unemployment rate for January, 2017 was only 4.8%. This is often cited by economists and the Fed as near “full employment.” But large publicly traded companies have to meet profitability goals and maximize shareholder wealth. Hence you still see plenty of grim headlines.
So Where to Look for Work?
Think small. Small businesses are a large portion of our economy. They employ about 50 million workers, accounting for 40.5% of private-sector payrolls, according to data from ADP. Since January 2005, small-business payrolls have increased by 5.9 million. Medium-size firms have added five million jobs and large firms added 1.2 million jobs.
The National Federation of Independent Business Owners’ (NFIB) monthly survey found that 30% of small business owners said they have job openings that they aren’t able to fill right now. That’s the highest reading since February, 2001.
NFIB’s national membership spans the spectrum of business operations, ranging from sole proprietor enterprises to firms with hundreds of employees. While there is no standard definition of a “small business,” the typical NFIB member employs 10 people and reports gross sales of about $500,000 a year. About 60% of their membership employs more than 100 people. The NFIB membership is a reflection of American small business.
Although I am not advocating limiting your search to the very smallest firms, I do advocate a tilt to smaller companies. A “smaller firm” compared to a Fortune 1000 company might still be $25M, $50M, $100M or even $500M per year in revenue.
Pros and Cons of Working for Smaller Businesses
I believe small companies tend to have several advantages. The big caveat is that every firm is unique. There are plenty of bad small firms and plenty of good large firms to work for. I’ve worked for and consulted with a wide range of companies, from start-ups to those with revenues of more than $100B/year. Here are my observations on working for smaller employers:
• Company culture, including support, collaboration, fun
• Concern for the individual and their families
• Visibility and appreciation from top management
• Work variety
• Flexibility with respect to time off, work hours and compensation
• Advancement opportunities
• Opportunity for incentive compensation tied to company performance, e.g. equity ownership, stock options, and profit sharing
• Opportunity to learn and be exposed to many different functional areas
• Less robust and less formal learning and development programs
• Lower benefits, e.g. health/life/disability insurance, retirement plan, paid holiday and vacation time
• Less administrative and support infrastructure
• Might require higher workload and longer hours
As with any company, it depends. Do your homework and find out before accepting any position.
Finding a Job in Smaller Companies
So how do you get hired by these companies? The best way is through networking and relationships. Small businesses prefer to hire people they know or someone who is recommended by someone they trust. The traditional arms-length process, using recruiters, on-line job boards and company website posts aren’t their ideal way to find the right talent. The very smallest companies want someone who they can trust based on a personal connection; someone who will be enthusiastic and committed to the company.
The days of joining a large company, having them carry you until retirement and pay you a pension are long over. Small companies are the growth engine of our country. They are a primary source of innovation. If you want to become an entrepreneur and run your own small business, what better way to learn, by first gaining experience in a small company?
Think small and grow!