Recruiting the right people is hard under any circumstances, but it's especially hard for smaller firms when potential employees would rather work for a large business than for a little one. 

In cities across America, the labor pool tilts toward the big guys, but there are some markets that defy this trend, according to a recent report by ZipRecruiter. The jobs platform analyzed its application data to discover the places where job seekers show a marked preference for smaller companies, giving these companies the best chance at the most sought-after talent.

ZipRecruiter defined small businesses as those with 20 or fewer employees, and large ones as those with 500 or more. The company examined 5.5 million posts for this study, and made sure to control for job title, industry, and month of posting.

There's a big caveat here, however, because ZipRecruiter did not control for salary. It's possible that job seekers who prefer small businesses over large businesses or vice versa are reacting to regional pay disparities in one direction or the other.

With that stipulation, small businesses have their biggest hiring advantage in these six cities:

  1. Wichita (63 percent advantage)
  2. Pueblo, Colorado (34 percent advantage)
  3. Santa Fe, New Mexico (31 percent advantage)
  4. Midland, Texas (30 percent advantage)
  5. Dallas (21 percent advantage)
  6. El Paso (20 percent advantage)

And these six are the worst for hiring as a small business:

  1. New York (115 percent penalty)
  2. San Francisco (84 percent penalty)
  3. Pittsburgh (73 percent penalty)
  4. Washington, D.C. (64 percent penalty)
  5. Los Angeles (58 percent penalty)
  6. Chicago (43 percent penalty)

According to ZipRecruiter, "while job seekers are overall less likely to apply to similar positions at smaller companies than bigger ones, there are some pockets in the U.S. -- primarily in the Southwest and Rocky Mountain regions -- where small businesses actually receive considerably more applications than their larger competitors, and thus have a 'hiring advantage.' "

The study notes that while America's three biggest metros are among the worst for small businesses, there is no general correlation between the size of a city and its advantage or disadvantage for small businesses.

Intriguingly, unemployment levels also don't appear to be a factor in why workers might apply to small businesses more. "The correlation with unemployment is tiny (.02) and statistically insignificant," ZipRecruiter writes.

"Similarly, in the cities where applicants are more friendly toward small companies, it's not because there's a lower rate of small-business failure, or lower income, or less affordable housing. It's not desperation. It's because people in these cities like to work at small businesses."

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Published on: Mar 6, 2018