While small business owners likely have hopes of expanding their company and obtaining additional clients during the process, a new report says employees of small companies often see salary gains considerably quicker than medium-sized businesses. However, large companies still provide the best wages, but there are many other benefits to being a small business owner and being employed by one.
According to data from PayScale, large companies have always recorded larger pay bumps, but this was the opposite of findings in 2012. The report noted that during the second and third quarters of last year, large companies saw the least significant increases in salary for employees when compared to other sized companies.
Many American consumers seeking employment may first look to big-name companies for their notoriety and larger scale of hiring. However, smaller business are often more likely to have a better retention rate, more satisfied employees and growth within the company including salary gains in a shorter period of time.
Data from the final quarter of 2012 revealed that small companies posted a 2.2 percent increase in wages from the previous quarter, while medium-sized organizations saw 1 percent gains in the same period. When looking at large companies, wages only rose 0.9 percent. On an annual basis, small companies saw 5 percent growth, medium-sized companies experienced a 2.7 percent gain and large companies posted wages that were 3.3 percent higher than in the fourth quarter of 2011.
“Often in the hands of entrepreneurs or families, small businesses with up to 99 employees are typically more flexible when economic shifts occur but can lack the deep pockets to survive a major decline in the economy,” as noted in the report.
Increased wages were also more prevalent in varying industries, with technology jobs paying the highest across the board. PayScale noted that the construction industry has also picked up, thanks to a healthy return from the housing market and improving factors. Increased sales of delinquent and existing homes throughout 2012 have prompted more prospective buyers to invest in new construction or to design their perfect house. According to the report, wage growth for construction jobs reached its highest level in over three years, rising 4.2 percent.
Jobs that saw the greatest year-over-year improved wages included employment in media and publishing, as both posted a 2.2 percent increase quarterly and rose 4.6 percent for the entire year.