It's official--people who work for small companies like their jobs better than those who work for large ones. That's the finding in a Dale Carnegie study released last year. Thirty-six percent of small-company employees reported being "fully engaged" with their jobs, compared with 29 percent of those who worked at larger companies. And while 26 percent of large company employees reported feeling "fully disengaged" from their jobs, only 18 percent of those who worked for small companies described themselves this way.
Engagement matters. Research shows that fully engaged companies generate two-and-a-half times as much revenue as disengaged ones. And then there's the obvious connection between engagement and retention--disengaged employees are roughly three times as likely to jump ship for a job at a competitor than engaged ones are. In a tightening labor market, having engaged employees gives you a significant advantage. (Here are 5 warning signs that employees are disengaging, and how to turn things around.)
Why are employees at smaller companies more likely to feel engaged with their jobs? Because small companies offer more of what they care about most:
1. The ability to make a difference.
At larger companies, the study's authors explain, engagement is largely a matter of an employee's relationship with his or her direct supervisor, and how the employee feels about the company's leadership. "But at a smaller company, this study found that the 'me factor' is important to the employee--having a direct impact on results and being personally important to the company."
2. Connection to the company.
Generally speaking, the smaller the company, the likelier employees are to know and interact directly with company leaders. That's a big advantage when it comes to employee engagement. Smaller companies are also likelier to have a single product, or purpose, making their missions and values easier to articulate. It's one reason large corporations have such a hard time getting their mission statements right, as you can see here.
3. Varied and interesting work.
At a small or start-up company, everybody does everything. From the employees' point of view, that's a good thing. "Unlike in larger companies, where they want to see their career advanced and their income increased, the employees of smaller businesses place a greater emphasis on doing work that is varied interesting," the study notes. Keep that in mind the next time you're fretting about giving someone an assignment that falls outside his or her job description.
4. Feeling trusted.
Being trusted is something all employees appreciate, but those at small companies particularly value this quality. (Here's a look at how trust can become a powerful asset in your organization.)
In the Dale Carnegie survey, 70 percent chose "Being trusted to do my job and more," as one of the emotional attributes that made them feel engaged at work. Fortunately for them and their employers, it's easier to give people autonomy in a smaller company, where fewer management levels and lower head counts make it easier for top executives to know what's going on everywhere, and where managers can take more time over hiring, ensuring they have employees who deserve that level of trust.
5. Greater transparency.
The study divides employee desires into emotional and functional attributes. On the functional side, the report notes, "viewing senior management as honest," is an important according to survey participants.
When it comes to senior management seeming honest, smaller companies can really stand out. The mere fact that most or all employees are able to speak to company leaders directly and share viewpoints or ask questions gives them an advantage over those where the CEO is a tiny figure on a faraway stage, reproduced in giant proportions on a projector screen. (Here are 9 ways to build a great relationship with your employees.)
6. Better communication--in both directions.
Employees at smaller companies value having greater access to top executives and being able to hear from them directly. Just as important is the feeling that they themselves are being heard. Employees want to be "more than just a name," the study notes. That's a much easier feeling to have in a small company than a large one.
What employers are still getting wrong.
Even though small companies do a great job at employee engagement, there's one thing their bosses consistently get wrong, the survey found: they put too much emphasis on compensation. Managers at small companies believe that communication and compensation are what matters most to their employees, the survey found. They're right on the first count, but wrong on the second, as research has proved time and again. (For example, here are four things Korn Ferry found that employees want more than a raise.)
This is good news for small businesses, since compensation is one area where most can't compete against larger corporations. But that doesn't mean you can relax. Unfortunately, the study also found that small employers believe their employees to be more engaged with their jobs than they actually are.
Given the powerful difference having engaged employees can make to your bottom line, the study says, "Many employers should be focusing on engagement more than they are."