If you're in it for the money, working at a larger, more established company may be your best bet.
A new Kauffman Foundation study, the Washington Post reports, shows that since 2011, small businesses have paid their workers just 66 percent of the salary dolled out to those at larger firms. In 2001--pre-recession and before the housing bust--the margin was at its narrowest, with workers at small businesses making 78 percent of those at their larger counterparts.
Perhaps even more interestingly, the trend holds true for young vs. old business as well. From 2001 to 2011, "the percentage earned by employees of start-ups compared to those of established companies dipped from 85 percent to 70 percent."
Reasons attributed to this gap are myriad, starting with the obvious: larger, more established companies simply have a more capital to allocate to employee salaries. Additionally, high turnover rates at younger companies is a factor, as is the prevalence for start-ups to crop up in industries that typically pay less. There's also the fact that, for many, there's more to work than money.
“The wage comparison excludes a lot of the reasons people join start-ups,” Dane Stangler, Kauffman’s Director of Research and Policy, told the Post. “For example, in tech companies, you have employees taking equity and betting on a payoff down the road and perhaps forgoing a lot of salary. Others want to work for themselves or like a small business environment, so there can be non-financial reasons behind the decision to work for these companies.”
I think there's a lot to be said for company culture, and often smaller, younger companies afford a more casual environment, lenient dress code, and more freedom to develop a business model that fits the person, rather than the other way around.
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