Small and mid-sized companies can be talent magnets and see revenue take off with a culture that builds pride and gives employees a chance to make a difference.
Even though they account for 55 percent of all U.S. jobs, small and mid-sized businesses often trail behind their larger counterparts when it comes to career appeal. What successful small and medium-sized businesses (SMBs) lack in brand recognition, though, they more than make up for in company pride and opportunities to make a personal impact. Here's how:
Credibility at the top
When a business has fewer than 1,000 employees, there's a good chance that everyone has met the CEO. At a small company, she might only work a few feet away. This makes employees especially attuned to the actions and integrity of their leaders.
In fact, Great Place to Work's survey of more than 52,000 SMB employees revealed that co-workers' responses regarding their leaders' ethics and competence were closely related to having a positive impression of their companies overall – even more so than pay or benefits. When we recently announced the country's Best Small and Medium Workplaces with Fortune, the leading companies also stood out for the ways they ingrained sound business practices into their cultures.
Take Intuitive Research and Technology Corp.: The president of this aerospace engineering firm meets with groups of new hires to have a face-to-face discussion about ethics over lunch, including specific examples of decisions the business has made in the past. The good will and pride this type of interaction generates among employees has a business impact. SMB employees we surveyed who expressed pride in their workplaces were 18 times more likely to say they wanted to stay with their employers for a long time, boosting institutional knowledge and giving the leading companies an edge in a tightening market for talent.
Making business personal
The Best Workplaces not only make their people proud, they also keep them engaged in the mission. Many smaller businesses achieve this by focusing on their natural connection to their communities. Granite Properties, for example, grants each employee a full 40 hours of time off to volunteer annually, with committees and online resources to help coordinate that work.
It's also essential to give employees a sense that they're connected to the organization's future. Each quarter, colleagues at software company Atlassian have 24 hours to work on any project related to their technology, office or culture. The best ideas earn awards at a contest, and many go on to become fully developed products.
That ability to make a mark on the organization is one of the most attractive aspects of SMBs among job seekers, and the leading companies use it to their advantage. Employees gave the Best Small and Medium Workplaces consistently better marks on topics linked to innovation compared to organizations that didn't make the list. These factors include management's receptiveness to new ideas, cooperation and leaders' willingness to recognize an honest mistake, which gives employees leeway to try new things.
Great cultures reap big rewards
Cultivating a high level of creativity, credibility and internal trust pays off in dollar terms. Our research found that the Best Small and Medium Workplaces experienced revenue growth roughly three times higher than their peers last year showing just how much value a strong culture can contribute to a smaller company.
Resource-strapped small and mid-sized companies may believe that they don’t have what they need in order to invest in a strong culture. However, as these winning companies demonstrate, some of the most meaningful efforts are not only free of cost—but well worth the investment.