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Gen Y Report: Gen Y Prefers Small Employers

PayScale’s "Gen Y on the Job" report reveals Millennials’ best job and employer options, favorite cities, top job skills, common degrees and more. 

Gen Y is attracted to small startups over large enterprises, according to the recently released “Gen Y on the Job” report. We found that 47 percent of Gen Y workers are working at small companies with less than 100 employees. Thirty percent are working at companies that have between 100 and 1,500 employees and only 23 percent work at large companies with more than 1,500 employees.

I think there are a number of factors that contribute to these percentages. First, many large companies have hiring freezes, where no recruiting occurs for several months because HR is accessing their talent pool and trying to cut costs. Second, it takes several months to get into a large company, when it could only take a week to get hired at a startup. With larger companies, candidates often have to go through several rounds of interviews, usually starting on the phone and then in-person. Finally, a larger company can pigeonhole you in a specific job role. Although big companies usually pay more, research shows that Gen Y prefers meaningful work over money. Here are the top three reasons why I believe Gen Y would rather work at a startup over a big brand:

1) Work life matches personal life. Small companies like Foursquare and Rent the Runway have free beer on tap, happy hours and casual dress codes. Gen Y doesn’t differentiate between their personal and professional lives like older generations do. Startup culture is a fun environment where they can let loose, which is especially important because you typically work longer hours at a startup.

2) Strong workplace flexibility programs. Since you have to work longer hours at a startup, the tradeoff is that you can work remotely. As long as the job gets done, and you’re working around the clock, you can work from home. Many startups, especially in the tech industry, have groups of teams that use social networking as a way to collaborate on projects. Douglas Karr, one of my old blogging friends, is the founder of DK New Media. He and his team of Gen Ys build relationships on Facebook and use social networks to work when not in the office.

3) Empowered to make a big impact. Small companies allow Gen Y workers to get their hands dirty in various areas of the business. It’s easier to move around and they can make a big impact much faster. The chain of command is smaller so it’s easier to get approval on projects. In big companies, it could take weeks to get signoff from an executive. Gen Y also has more access to executives and the CEO. At big companies, it’s hard to get that face time.

Keep the discussion on Gen Y going on Twitter using hashtag #GenY.

Dan Schawbel is the founder of
Millennial Branding, a Gen-Y research and consulting firms. He is a Gen-Y career and workplace expert, as well as the bestselling author of Me 2.0: 4 Steps to Building Your Future.

More from PayScale

A Look at Gen Y in the Workplace [infographic]

Gen Y Demands a Results Only Work Environment (R.O.W.E)

Gen Y Report: They Have Bachelor's Degrees But Aren't Using Them

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