When it comes to employee compensation and job tenure, size does matter, according to a study released today by the Office of Advocacy of the SBA. The study found that all other things being equal, employees of larger companies have longer job tenures than those working in smaller ones. Moreover, the study found that service and manufacturing occupations pay more in larger businesses.
The study determined that each additional year of tenure on a job reduces the probability of turnover by 81 percent. It also established that the offering of benefits reduces the probability of an employee leaving in a given year by slightly more than 26 percent.
Recent surveys by the NFIB have reported that finding qualified workers continues to be a challenge for most small businesses, although easing a bit due to the sluggish economy.
What this study tells us is that even though small firms may be able to offer creative and attractive non-financial benefits, such as more flexible work conditions, more interesting work, etc., in the end what matters most is the money.
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