74% of American Employees Would Prefer to Work for a Smaller Business Over a Larger Business. So Why Don’t They?
May 01 2024 - 10:00AM
Business Wire
Despite perceptions of better cultures, higher
job satisfaction at smaller businesses, new UKG survey identifies
misconceptions that small businesses must overcome
About three-quarters (74%) of employed Americans report that, if
all things were equal (e.g., compensation, benefits, hours, etc.),
they would rather work for a smaller business1 than a larger
business, according to a new study from the UKG Workforce
Institute released during National Small Business Week. That
said, 67% percent of employed Americans believe it is harder for
smaller businesses to hire talent, which may be explained by the
fact that nearly 4 out of 5 U.S. workers (78%) say larger
businesses can offer higher wages.
“While the public may perceive that larger businesses can offer
more to their employees, our study shows that smaller businesses
have their own distinct advantages, especially with workplace
culture,” said Dr. Jarik Conrad, vice president of human insights
at UKG and executive director of the UKG Workforce Institute.
“Because of their size, smaller businesses are in a position to
provide employees with a family-like feel, and they can use that
advantage to their benefit by focusing on creating a great place to
work for all.”
As small businesses scale and begin growing their HR teams,
getting the basics right is crucial to attracting and retaining
talent, meeting and exceeding customer expectations, and increasing
revenue. However, the UKG Workforce Institute study found there are
perceptions that businesses with leaner teams must overcome,
including:
- Only one-quarter (25%) of employed Americans think payroll
accuracy is better at smaller businesses;
- Only 18% of employed Americans say that smaller businesses are
better at payroll; and
- Just 20% of employed Americans report that smaller businesses
are better at onboarding.
Areas Where Smaller Businesses are Succeeding
The UKG Workforce Institute study found that employed Americans
believe that smaller businesses have several benefits over larger
businesses, leading to 64% of employed Americans feeling that
people would rather work for a smaller business. Specifically, the
study revealed that:
- Thirty-eight percent of employed Americans think overall job
satisfaction is better at smaller businesses, compared with
just 17% who say it is better at larger ones;
- Nearly half of employed Americans (46%) believe that
transparent and consistent communication from leaders is
better at smaller businesses; and
- Thirty-six percent of employed Americans believe there is
greater schedule flexibility at smaller businesses.
Additionally, 36% of employed Americans noted that the quality
of managers is better at smaller businesses than larger ones — a
crucial component in attracting and retaining talent, confirmed by
recent UKG research that found 73% of employees say their
manager’s support, encouragement, and/or leadership directly
motivates them to go above and beyond in the workplace.
“The leading small businesses have realized that all-in-one HR
and payroll solutions can level the playing field,” said Chris
Kiklas, vice president of UKG Ready product management at UKG.
“This ensures that they can create a foundation that provides great
employee experiences while allowing them to grow and scale, so they
can remain competitive with larger businesses. By capitalizing on
the opportunities to address perception gaps, lean teams can set
themselves up for success.”
As leaders at small businesses look to attract and retain
talent, the UKG Workforce Institute study found that over half of
employed Americans (56%) believe that people tend to start their
job searches by applying to smaller businesses first, demonstrating
that these workplaces have the first shot to be competitive in
hiring and retaining the right talent. With automated and intuitive
HR solutions, lean teams can grow and scale at their pace while
continuing to do what they do best: providing the goods and
services local communities want.
About UKG
At UKG, our purpose is people. We are on a mission to inspire
every organization to become a great place to work through HCM
technology built for all. More than 80,000 organizations across all
sizes, industries, and geographies trust UKG HR, payroll, and
workforce management cloud solutions to drive great workplace
experiences and make better, more confident people and business
decisions. With the world’s largest collection of people data, work
data, and culture data combined with rich experience using
artificial intelligence in the service of people, we connect
culture insights with business outcomes to show what’s possible
when organizations invest in their people. To learn more, visit
ukg.com.
Methodology: This survey was conducted online within the
United States by The Harris Poll on behalf of the UKG Workforce
Institute from April 9-11, 2024, among 1,150 employed adults ages
18 and older. The sampling precision of Harris online polls is
measured by using a Bayesian credible interval. For this study, the
sample data is accurate to within +/- 3.5 percentage points using a
95% confidence level.
Footnote 1: “Smaller businesses” refers to businesses with fewer
than 500 employees, and “larger businesses” refers to businesses
with more than 500 employees.
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