Working for a large corporation in a well-defined role with a clear career path, or spending your best years in a startup that gives you the space to flex your creative muscles – which one sounds more enticing?
The startup versus corporation debate has been around for decades. Both have their own merits and demerits.
Some recent studies, however, indicate a rising trend among millennials in the tech industry to work for the more established organizations.
Irrespective of the reasons behind this, we decided to conduct our own research to understand exactly how employees are moving in and out of different companies, and how the size of a company, in terms of its workforce, affects its hiring preferences.
If you’re an IT professional aiming for a bigger career move, there are some really interesting lessons you can learn from this study.
What is This Study About?
We analyzed more than 500 leading companies around the world, including giant corporations like 3M, Google, Apple, Intel, Cisco, and hundreds of others.
We studied the percentage of employees in tech related roles that transitioned to and from a company, as well as the size of the company they came from or left too.
For example, we analyzed the percentage of Google employees who switched to other companies. We then categorized those companies as large, medium and small based on their workforce size.
Similarly, we analyzed the number of employees that came from other companies to Google, and categorized their previous companies based on the workforce size.
Here are 7 lessons you can learn from this data.
1. Large Companies prefer Hiring from Similarly Sized Companies
Our study included companies like IBM, Intel, Microsoft and dozens of other organizations that employ thousands of people.
From the data we gathered it’s clear that these giant corporations have a clear bias towards other large companies when it comes to hiring new talent.
We found that, on average, more than 40% of the new employees hired in large organizations came from similarly sized companies.
The trends appear to grow stronger as you move towards companies with a bigger workforce.
O possible explanation for this trend is that professionals working in other large companies are used to the hierarchical structures, the longer approval processes and the overall working style of such organizations.
As a result, they find it easier to adjust.
2. From Large To Large is Generally the Switching Trend
Most employees working for large organizations switch to their direct/indirect competitors with a similar workforce size.
Again, this is apparently down to a couple of reasons.
- Employees find it easier to adjust to similarly sized companies
- Competing organizations can easily match the employment package, the benefits and future career opportunities offered by the previous employers.
There’s a similar job switching trend in medium sized organizations as well. We can assume that the reasons are similar.
3. Employees from Large Organizations Rarely Switch to Startups
We’re well and truly in the middle of the startup age where new companies with unique ideas are emerging every day around the globe.
Some of the most successful startups have been started by people with years of corporate work experience under their belt. Many of them had already reached the top of the corporate ladder when they decided to try their luck with a startup.
However, the employee flow from large companies to startups is still pretty low.
Our data shows that people working at large corporations rarely leave their settled positions to work on or for a startup.
The overwhelming majority prefers to stay either with their current employers or switch to an equally large competitor. This is understandable because working for a startup is drastically different from the settled environment of a large company
Startup life is full of uncertainty, months of pay-less work and a lot of elbow grease. Not everyone is cut out for such adventure especially after reaching a comfortable position in their career.
4. Employees from Small Startups Rarely Move to a Large Company
Another interesting trend that our study uncovered is that there’s almost no movement of employees from small startups directly to large corporations.
We’ve already mentioned that large organizations prefer hiring from their competitors. The share of medium to small sized startups in their new hiring is pretty small.
The same is reflected in the movement of employees from small startups directly to large companies.
There are apparently a few reasons for this.
- Startups offer a lot of flexibility in roles and the freedom to experiment
- Many startups offer equity to their employees which is rare in large organizations
- Employees who’re used to working for startups find the work environment of large organizations slow and boring.
From the hiring company’s perspective, the reasons are similar to those mentioned in the first point.
5. Moving from a Medium to a Large Company is Easier
The employee transition stats in our study uncovered an interesting trend. It is much easier for employees to move from a medium sized company to a large organization as compared to a direct jump from a startup.
Almost every company included in this study, had a fair share of new hiring from medium sized companies. In fact, people working in medium sized companies seem to move frequently in both the directions – to large organizations and small startups.
Although the exact reasons for such trends are out of the scope of our study, but we can assume a few scenarios based on our understanding of the job market.
- People working in mid-sized companies hold the middle ground. They don’t have the benefits and the security of working for a large corporation, but they’re also not living on the edge like startup employees.
- They can move easily to small startups or large companies since the change is not as drastic as for someone from a large company
Although the scope of this study was limited, there’s a lot that can derived from it. If you’re a Software Engineer, a Project Manager or any other IT professional looking to move to higher grounds, the trends uncovered in this study would help you make informed decisions. So if you’re currently working in a small startup and looking to move to a large organization, you’d need to first switch to a mid-sized company to improve your chances.