Small Companies Can Launch Big Careers
Here’s what small companies can offer new graduates
A substantial share of new graduates start their careers in small-sized companies—those with fewer than 250 employees. This is expected, as these companies make up the majority of payroll employment in the U.S.
The likelihood of starting a career at a small or large company varies significantly by industry, with some having new graduates concentrate in smaller firms and others in larger ones.
Five years into their careers, graduates experience similar career outcomes regardless of the size of their first employer. They have comparable promotion timelines, managerial prospects, and salary progression. However, those who begin at small companies are more likely to become founders of their own companies later in their careers.
With the graduation season around the corner, many soon-to-be graduates are weighing their career options. One of the biggest dilemmas they face is whether to start their careers at a large company with structure and prestige, or a small company with flexibility and hands-on experience. Large firms provide stability, clear career paths, and well-defined training programs, while smaller firms often offer broader responsibilities, quicker skill-building, and a faster-paced learning environment. However, small companies may also come with fewer resources, less stability, and less name recognition on the resume. Interestingly, in a previous newsletter, we found that employee sentiment is generally higher in small companies than in large ones, with the biggest difference in perceptions of work-life balance. So, how does company size actually shape career outcomes?
To explore this question, we analyze Revelio Labs’ workforce profiles data that includes detailed information on the education history of each worker. We focus on individuals who earned their bachelor's degrees from US institutions between 2015 and 2022, and follow their career trajectories after graduation. While large firms dominate conversations about career planning, a substantial portion of graduates start their careers in small, less structured environments. A significant share of graduates—about 42%—begin their careers at small companies (250 employees or less), compared to one-third who start their careers in large firms (5000+ employees). This is expected, given that small businesses make up the largest share of payroll employment in the US small companies may offer more immediate hands-on experience, broader responsibilities, and a faster pace of learning compared to the structured training programs of larger corporations.
The tendency to start at a small or large company varies significantly by industry. Industries like engineering and construction, and marketing and advertising see a higher share of graduates beginning their careers at smaller firms. This makes sense given the structure of these industries: Engineering and Construction often consist of numerous specialized firms working on projects of varying scale, while marketing and advertising agencies range from boutique firms to global powerhouses, with many entry-level opportunities at smaller agencies. In contrast, industries like Finance tend to funnel more graduates into large firms. These industries are dominated by well-established corporations with significant capital requirements, regulatory oversight, and complex operational structures. Large financial firms, for instance, offer structured training programs and clear career trajectories, making them net exporters of rising talent.
Fresh graduates tend to stay longer at large companies compared to small and medium-sized firms. On average, those who start their careers at small companies remain for about 30 months, while those at large companies stay for approximately 36 months. This difference is likely driven by the structured career progression, training programs, and stability that large firms offer.
Although fresh graduates tend to stay longer at large companies, this does not translate into faster career progression or greater upward mobility. The average time to first promotion is similar for those who start at large and small companies, and starting salaries do not differ significantly between the two. This is likely because both types of companies are competing to attract and retain top talent, and as a result, they offer comparable starting salaries. Similarly, salary growth over time follows a similar trajectory—five years after graduation, earnings are comparable regardless of the size where a graduate started their career. While company size shapes early-career experiences, long-term career growth is influenced more by factors like industry norms, individual performance, and available opportunities for advancement.
When we look at the entrepreneurship pathway, an interesting trend emerges. Graduates who start their careers at small companies are almost 1.5 times more likely to eventually become founders or co-founders than those who start in large organizations. The hands-on experience and broader responsibilities that come with working in smaller organizations seem to foster an entrepreneurial mindset, providing individuals with the skills and confidence needed to start their own ventures later in their careers. This is in contrast to those who begin their careers at larger companies, where roles tend to be more specialized, and opportunities for taking on broad, cross-functional responsibilities may be more limited. As a result, the path to entrepreneurship is often more accessible for those who begin in small companies.
While large companies offer stability and structured growth, starting your career at a small company can also be a highly valuable stepping stone. The hands-on experience and broader responsibilities in smaller firms can lay a strong foundation for long-term career growth. Moreover, small companies may offer a more dynamic environment that fosters entrepreneurial thinking and opportunities for leadership. For new graduates, and especially those seeking to become entrepreneurs one day, choosing a smaller company could provide the flexibility and growth opportunities that not only enhance early career development but also set the stage for future success.
