With unemployment near a record low and tech workers in particularly high demand, this group has lots of options when it comes to choosing a job. One major consideration is company size: Should they work for a smaller startup or a tech titan?
When we think of the tech world, we often think of it as binary: composed of tiny incubators hoping their idea is the next big thing, on the one hand, and behemoth corporations with a city-sized campus on the other. But this excludes all the companies in between.
As hiring gets harder, especially in tech, we wanted to know whether employees prefer working for small, medium or large companies. So we surveyed 1,000 tech workers to learn what influences their inclinations.
Small companies are most common, but large companies employ the most people
When it comes to the sheer number of companies, the U.S. is a small-business nation: almost 98% of firms have fewer than 100 employees. Medium-sized firms (100 to 999 employees) make up about 2% of all U.S. companies, while large firms (1,000 or more employees) only comprise 0.2%.*
But when we look at employment numbers, the distribution is different — large firms employ almost half the population (46%), followed by small firms (35%) and medium-sized firms (20%).
Here’s a look at the percentage of firms and employees by company size:
Tech workers prefer medium-sized companies to behemoths and small firms
Though medium-sized companies employ the fewest workers nationwide, this is the most popular company size among tech workers, preferred by 44%. This is followed by large companies (28%) and small companies (22%).
Personal priorities impact company selection
To figure out why people have the preferences they do, we explored the job attributes and benefits tech workers associate with different sized companies.
When asked what factors are most important to them in a role, tech workers say job stability; flexibility and work-life balance; and salary. But when we break this down by company size preference, we see different priorities emerge:
- Those who want to work for a small company say it’s due to the flexibility and work-life balance they believe the company can offer.
- Those with a preference for medium-sized companies say it’s because of job stability.
- Those who prefer working for a large company say it’s due to the superior benefits and perks.
Now, let’s dig deeper into the details and look at companies that are doing things well.
Workers prefer large companies for benefits and perks
For tech workers who want to work at a large company, this preference is often based on a belief that these firms offer greater job benefits than small or medium-sized enterprises do.
The one exception? Having a big impact on the company. Those who prefer a small (35%) or medium-sized company (35%) believe their work will have a significant impact at these firms. In comparison, only 30% of those who want to work for a big company believe this.
The most important factors for those who want to work at large companies are salary and benefits. Whether you work for a large or small firm, if you want to attract tech candidates, offer competitive pay and perks; publicize them; and make sure both are mentioned early in the interview process.
Zappos is an example of a large company going above and beyond to attract talent through perks. Not only do they go big on benefits, such as offering free health insurance for individuals, but they also lavish their employees with extras like concierge dry cleaning and car washes.
Medium-sized companies score points on generosity and diversity
Workers who prefer medium-sized companies are most likely to say that giving back to the community as well as diversity — not only in leadership, but also in their departments and on their teams — are important factors to them.
If your company isn’t already pursuing these kinds of initiatives, now is a great time to start. If you’ve already got efforts in place, make sure job seekers know about them through your company website and other channels.
For instance, email marketing company Sendgrid is a leader in giving back to the community, pledging to donate 1% of their equity over the next 10 years. They also have a number of employee-led volunteering opportunities, including teaching coding at the Boys and Girls Club and a community week, where employees volunteered over 1,000 hours in 2018.
Small companies allow employees to make a personal impact
Though medium-sized and large companies are more popular among tech workers, that doesn’t mean small companies are unpopular: Nearly one-quarter (22%) of our respondents prefer them.
As we see above, more respondents who prefer small and medium-sized companies feel their work could have a big impact there than do those who prefer large companies. Other surveys have shown similar results: For example, workers at small companies enjoy seeing the impact of their work and feel they are “noticed more often by people who matter.” Most people who have transitioned from large to small companies also feel more appreciated.
Buffer — a 90-person, entirely remote team that helps companies grow their brand on social media — shows appreciation for employees in creative ways. Because the small startup has no central office, they decided to recognize one another’s successes by giving shout-outs at all-hands meetings and devoting an entire Slack channel to gratitude.
Worker preferences for company size vary by gender
When we look at preferences across gender, we see that medium-sized companies are still the most popular for both men (46%) and women (42%). However, women (33%) are more likely to want to work for a large company than men (28%), while men (23%) are more likely to want to work for a small company than women (20%).
Next, we dug into the details to figure out why each group chose the company size they did, looking at what they think it can offer.
For women, flexibility and work-life balance are the main reasons they’d like to work at a small or medium-sized company. And they value job stability regardless of company size. Better benefits and perks steer women toward a midsize or large company, and a higher salary is a unique draw for large companies.
For men, job stability is the number-one reason they prefer a small or midsize company. Like women, they’re also drawn to these companies because of the flexibility and work-life balance they expect from them. Higher salaries are a pull for men who prefer medium-sized and large companies, as are better benefits and perks.
There are some differences in what tech workers associate with various company sizes. For those who prefer a small or midsize company, this preference is driven by the expectation that their work will have a measurable impact. And those who prefer larger companies do so in part because they expect to get higher salaries there.
However, a number of factors are important to all job seekers, regardless of company size preference. Flexibility and work-life balance, for example, are valued almost equally by all tech workers in our survey.
No matter how large your company is, focusing on the three most-valued job attributes — stability; flexibility and work-life balance; and salary — can help attract tech workers in a competitive environment. And make sure these perks are publicized; don’t make job seekers dig to uncover the things they like. Going further, all companies would be wise to implement and publicize opportunities for career growth as well as training and development programs — popular drivers for those who prefer midsize and large companies.
The more you pay attention to specific job-seeker preferences, the better equipped you’ll be to attract top tech candidates.
*These sizes vary slightly from the definitions we use throughout the report, due to how U.S. Business Dynamics Statistics are gathered. The definitions used in our survey are: small company: 1-100 employees; medium-sized company: 101-999 employees; large company: 1,000 or more employees.