Working for an SME: Challenges and Rewards

It's the classic question on every jobseeker's mind, "big or small?" In other words, should you work for a small local company, or join a big international one with a brand name that would look good on your resume? Let us go through the things that you'd need to consider.

By Karunanethy Kalaivani

The size and presence of a company has an immense bearing on its culture as well as on the opportunities available for employees. It is a crucial factor to consider when deciding which job offer to take. Deciding whether to work for a Small to Medium Enterprise (SME) or a larger Multi-National Company (MNC) depends a lot on your personal career goals and preferences.

Although it’s the conventional wisdom to join a MNC if at all possible, there are also particular benefits to working for a SME. To help you decide, we have weighed the pros and cons based on six categories.

1. Career progression

Theoretically, more opportunities for career progression exist in larger companies than in SMEs, simply because there are more positions available in large companies. Large companies with a committed human resource department would also see to it that your growth is clearly charted, so there is greater predictability with regards to your career development.

Nevertheless, you might get promoted more frequently in an SME, especially if the company is doing well and expanding rapidly. It is often the case that you’d have more opportunities to prove your worth in a small company, and this in turn would lead to faster career advancement. In contrast, you’re likely to end up as no more than a mere cog in a vast machine when working for a large company. You’d have to be a very bright star in order to get noticed, much less get promoted.

Even though it might look good to have worked for a Fortune 500 company, recruiters are trained to see past the gloss and look for substantial experience instead. Regardless of where you go, the quality of your work experience counts a lot more than the job title or the company name.

2. Personal growth and development

Well defined – even rigid – job roles in larger companies give less flexibility and opportunities to display personal initiative. Entrenched protocol and work processes also mean there is less room to work according to your own style.

In an SME however, the job definitions tend to be looser, and there is usually more openness between different departments. In other words, you are more likely to have opportunities to try different things. If you’re a recent graduate or a young professional who is still unsure about your career goals, this could be your chance to try various options before settling on one career direction.

Loose arrangements are not without drawbacks however – it could mean that you’d end up doing loads of routine, boring work that no one else wants to do. Formal processes arise in large companies mainly because of the need to co ordinate the work of hundreds, if not thousands, of employees. They are designed to ensure a high degree of accountability, i.e. that everyone does what they’re supposed to do. Not more, not less. Strict defi nitions of job roles are not usually prevalent in smaller companies.

3. Employment stability

There is a deep rooted perception that working for an established MNC gives you more stable employment than an SME. The smaller company may, after all, fold over overnight.

But that’s not really the case any more. High profile retrenchments of thousands of workers have become a norm in recent years. Japanese and American MNCs frequently downsize in order to trim their operating costs. Some have even left Singapore for cheaper labour overseas. Globalisation and technology has led to greater fluidity in the job market all over the world, especially in the developed economies. Jobs are no longer as secure as they used to be.

This is reflected in the rise of contract employment at many MNCs. Landing a permanent job in an MNC is much more challenging than before. So, ironically enough, you might actually fi nd greater job security in a small company than in large one, particularly if you possess specialised skills that are hard to replace.

4. Remuneration and benefits

With larger revenue streams, MNCs can afford to give higher pay and provide more extensive benefits than smaller companies, where human resources might represent a signifi cant cost. Bigger companies also have the power to negotiate better perks like gym memberships, recreational facilities, or even provide them on their own premises.

However, with talent always in demand, SMEs have learnt to pay competitive remuneration to recruit the right people, so the difference in wages might not be as great as you’d think. This is increasingly the case because of the wage restructuring measures recommended by the National Wage Council (NWC). A larger part of remuneration is now tied to an employee’s performance.

5. Nature of profession or industry

Some industries tend to be dominated by smaller companies. These include the media, advertising and IT industries. Doctors and lawyers are two professions that usually start small practices as well.

These industries and professions all have one thing in common – the practitioners in these fields possess highly specialised knowledge that makes it possible for them to build an entire business around their expertise. More often than not, these companies are small start-ups, and they can be very rewarding places to work in, especially if you’re keen to work at the cutting-edge of your field or industry.

6. Brand value

No doubt about it – working for a globally recognised company is a prestigious affair. Posh premises in downtown locations and big brand names do have their attractions. They certainly do make it easier for human resource departments to attract applicants. As far as MNCs are concerned, it’s an employer’s market – they have the luxury of picking the best out of hundreds of applications.

What that means is that many smaller companies are left with vacant positions simply because not enough people apply for them. And this remains the case even when these companies offer competitive pay. In a tight labour market, you could be doing yourself a great favour by applying for jobs in small companies, where you would be facing a lot less competition.

In the end, the choice depends strongly on your own objectives. Bear in mind that all of the above categories are broad generalisations, so there is always a need to consider each company on a case-by-case basis.

Here is the view of a recent postgraduate from the National University of Singapore (NUS). He accepted the position of Pricing Analyst at a Fortune 500 company after three months of job hunting. His previous jobs were in smaller companies.

“In today’s cut throat market, having the right experience is only half the game. Having the right experience from the right company often gives the candidate the edge over the rest in the competitive playing field. While in the job market after my postgraduate studies, I found recruiters were much more interested in work experience for MNCs and other large companies, to the extent that preference was given to similar work experience obtained in an MNC rather than an SME.”

On the other hand, Yamini Prakash works in a pharmaceutical market research company that has fewer than a hundred employees. A Life Sciences graduate from NUS, she believes that her current job has given her more opportunities to develop her career than if she had joined a larger company. She says, “The smaller size means there is more cross-departmental interaction. I get to participate in different projects, which give me exposure to various aspects of the industry. A lot of the learning comes from hands-on on-the-job training. As a recent graduate, I doubt I would be given such heavy roles so soon if I had joined a large MNC.”

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