How Small and Large Businesses Develop Employees: 5 Key Differences

There are 33,185,550 small businesses in the United States and there are roughly 21,139 large corporations. The average American prefers to work for a large corporation. Part of the reason is that they pay more and have better benefits. However, other factors make large businesses more attractive.

According to Pollack Peacebuilding, there are several differences between the way small businesses and large businesses develop employees. 

Although small businesses may be limited in their resources, they should be able to benefit by using some of the same practices that large companies do.

Human Resources are Handled Differently

A small business will often look at the role of its HR department differently than a large business would. Small businesses think of the human resource department as nothing more than the people who do payroll and process new hire paperwork.

Larger company’s HR departments often focus on employee recruitment. A large company will put job listings on sites such as Indeed or LinkedIn and take out ads in local newspapers. They will also have relationships with local universities. A very large company may also recruit employees internally by posting jobs on its website.

Big companies have skills tests developed specifically for the roles they are trying to fill. They have access to detailed personality tests designed to ensure an applicant’s character is suited to a job.

A small business may put some ads on employment platforms. They are unlikely to have relationships with colleges and may have a basic skills test that they acquire online.

A small business may call references and give an in-office saliva test for drugs. 

However, a large company will be able to run a thorough background check and can send a job candidate to a drug testing facility.

Many large companies use contractors and freelancers to get work done. This makes an HR director’s job much easier. There are many platforms on which freelancers can be found, so small companies can hire freelancers just as easily as large companies. Although it may take some time, a small company can create its skills test the way a large company does.

Employee Satisfaction

Large companies can offer far more benefits than small companies can. Employees of large companies often enjoy comprehensive health insurance, 401ks, vacation time, and sick days. Small companies often cannot offer these perks. Employees may have to pay a large portion of their health insurance and time off may not be paid. 

Although the benefits of working for a large company are great, there are certain advantages a small company offers to its employees.

Employees have more direct access to management in a small company. A secretary may chat with the president of the company daily. The CEOs are more likely to think of their coworkers as family. 

There are some things that large companies do that smaller companies can easily emulate. Large companies will often send anonymous surveys to their employees to gauge how they feel about management, payment, and general operations. 

Large corporations will often have quarterly reviews in which managers can tell employees how they are doing. These types of communication are free and can help employees and management to understand one another.

Employees in a small company will have a much better chance of having their ideas heard than employees in a large company. 

When an employee makes a suggestion in a large company, it must travel up the chain of command. The employee’s supervisor must take the suggestion to the department manager and the department manager will take the idea to their boss. If the suggestion even makes it that far and is taken seriously, it will be researched and discussed before implementation.

Small companies are more likely to try things that employees suggest. Because there are fewer departments, employees, and customers, the company is taking less of a risk by trying employee suggestions. 

Conflict Resolution

Any company must work as a team, and conflicts between workers can interrupt production and affect profits. Conflicts can result in litigation and even violence.

Large companies often have conflict resolution training and de-escalation training. A large corporation may employ a person to head this type of training. They might also have a security team trained in de-escalation. 

Many small business owners may think they do not have the time or money to offer conflict training to their employees. However, some companies can offer this important training for a fair price in a short amount of time. The trainers can come to the business or hold classes over Zoom. 

Managing a small business is hard enough, so the CEO may not have time to manage disagreements between coworkers or to talk to coworkers who cannot get along with one another. 

Conflict resolution training can teach team supervisors how to handle conflicts between coworkers. It can also teach coworkers strategies for communicating with each other. Trainees learn how to compromise and collaborate with others. This training teaches coworkers to get to the heart of the problem rather than continue arguing with each other.

De-escalation training teaches managers and security professionals how to deal with an employee whose behavior may escalate into violence. It is very important to know how to talk to a person who is in a violent state. 

Trainees receive instructions on the proper tone of voice to use in a crisis and how to carry themselves and control their emotions in a volatile situation. They learn how to empathize with a highly emotional person.

Opportunities For Advancement

Large companies can offer employees more opportunities for advancement than most small companies can. If an employee is dissatisfied with their job, they will have the opportunity to make a lateral move within the company. A worker may be happier and perform better in a different department than the one they started in.

Larger companies are more likely to require degrees for management positions. A person may never get a promotion if they do not have the proper formal education.

Many large companies will have tuition reimbursement or assistance programs. Tuition assistance programs will pay for a certain percentage of a college education and tuition reimbursement programs pay employees back for the cost of education. 

Most employers will require employees to study something related to their job or related to what the company does. 

An employee may have to agree to work for the company for a certain number of years to get tuition assistance or reimbursement. If a person leaves their job sooner than anticipated, they may have to pay back the tuition fees.

Small companies only have a few management positions available and are unlikely to offer tuition assistance. They are more likely to reward employees with raises instead of promotions. 

Most companies offer some type of on-the-job training, but large companies have entire training departments. The training is put together by people who specialize in employee education. Training in a small company is implemented by managers or owners who do not have formal training themselves.

Both small and large companies will offer certificates for training, but they are taken more seriously if issued by a large corporation. 

A small company may be unable to give an employee a promotion with a large pay upgrade. However, it can create a position with an impressive title for an employee who they want to reward and retain.

It is Easier For Small Companies to Get Rid of Bad Employees

When an employee is fired from a company, they may entertain the idea of suing if they believe the firing was for unlawful reasons such as age, race, or gender identity. Large corporations have more resources than small corporations, so an ex-employee who wants to sue has a better chance of finding an attorney to represent them. 

If a small company is sued by an ex-employee, it is unlikely to generate much attention unless the lawsuit is for an unusual reason. 

When an employee sues a large company, the story will likely make the news, and no company wants that kind of bad publicity. 

Large companies will have legal departments that will write their policies, and the protocol for warning an employee about poor job performance is well-defined. For example, a large company will give employees a verbal, written, and final warning before letting them go. Each of these warnings will stay on the employee’s record for a certain time.

Small companies should take a lesson from large companies and have a clearly defined system for warning employees before firing them. It will avoid confusion and make it harder for employees to take legal action.

Running a small company is hard work. Finding and retaining employees can be challenging. But if you follow the lead of America’s top companies, your business can be a success.

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