What big companies can learn from small ones (and vice versa)

Although it is typically large organizations that receive the lion’s share of attention from news outlets or politicians, it is often forgotten that it is small businesses that form the backbone of the US economy.

Approximately 99.9% of all businesses in America (around 33.3 million in total) are small businesses. Data from the Small Business Administration shows that this cohort employs nearly half (46%) of all employees. This is a remarkable statistic when you consider that 80% of SMEs have no staff at all (they are sole proprietorships) – meaning it is the remaining 20% ​​who are responsible for this huge level of employment.

And while small businesses can often sell themselves with a more flexible and paternalistic approach, it is also a fact that small businesses face the same recruiting challenges as larger companies.

What large companies can learn from smaller ones

To examine this in more detail, the recently released 2024 People and Programs Report from Hiscox – a leading insurer for more than 600,000 small businesses in the U.S. – surveyed 1,000 U.S. small business owners to examine the strategies they use to maintain work-life balance. Apply balance and promote recruitment.

However, we believe the results of this survey actually offer important insights for HR and talent acquisition leaders large companies – to help improve their practices and vice versa.

Everyone can learn a lot from each other. Here’s what we found:

Work-life balance: The advantage of small business flexibility

One thing is clear: According to the Hiscox report, small businesses excel at cultivating a flexible work-life balance, with employees typically working eight hours a day and owners around the age of 63 Go into retirement.

This relaxed approach can seem much more appealing than larger corporate environments.

According to Gallup, more than 40% of U.S. workers work more than nine hours a day (45 hours a week) and 12% work more than 12 hours a day (60 hours a week).

In fact, we find that for every four employees who leave small companies for larger corporations, five return to smaller companies for a more personalized work experience.

The flexibility and balance that small businesses offer are the main drivers of this trend.

Big gives structure

In contrast, while large companies often have more rigid structures, they can still find balance by exploring strategies found in small companies, such as: Such as offering flexible work hours, remote work options, and other benefits that promote a healthy balance between personal and professional life.

This approach can help them retain employees and increase satisfaction without sacrificing their operational needs.

HR managers should note that employees who move from large to small companies want more than just a paycheck – they’re looking for trust, connection and work-life balance.

Conversely, employees in small companies often pursue opportunities at larger organizations to advance professionally, complete structured training programs, and gain access to a broader range of resources and benefits.

By adopting the personalized approaches of small businesses, larger organizations can better respond to the changing needs of their workforce, while small businesses can implement structured training and development programs from their larger counterparts to create growth opportunities.

Together, these strategies can create a more satisfying work environment for everyone.

The recruiting process: learning from each other

In today’s competitive job market, both small and large businesses face a common hurdle: hiring.

The Hiscox report shows that 30% of small businesses struggle to find enough qualified candidates, and this sentiment is reflected in larger companies too.

To be more successful, companies must refine their recruiting strategies.

Large companies often use sophisticated digital recruiting tools and thorough vetting processes, which provide valuable insights for small businesses.

By incorporating these digital tools – like AI and online platforms – small businesses can streamline their hiring processes and expand the reach of their candidates, while maintaining the important human touch that often makes the difference in business.

Surprisingly, the most common recruiting method for small businesses is still offline (66%), such as word of mouth or family, according to the Hiscox report (see below):

Small companies are characterized by the fact that they hire staff quickly and usually fill positions in just three weeks and with just two interviews.

In this case, small businesses’ reliance on personal relationships – 49% use word of mouth and 35% recruit through family – promotes strong cultural fits and faster onboarding.

Larger companies could benefit from the efficiency and personal touch of smaller hiring methods to improve their flexibility in attracting talent.

By learning from each other, small and large companies can improve their recruiting processes and thrive in today’s changing work environment.

AI in the Workforce: A Growing Opportunity

Hiscox 2024 People and Programs Report

Additionally, the Hiscox report shows that while only 26% of small businesses currently use AI, 76% see AI knowledge as valuable.

Interestingly, from the companies that have done this NO 85% of respondents who plan to use AI may unknowingly integrate it into the everyday tools they use.

AI is often portrayed as a malevolent creature designed to replace human jobs, but today’s reality for small businesses is very different.

According to the Hiscox report, small businesses are currently choosing to integrate AI to support digital operations, such as email software (72%) or online sales channels (56%). These features can help rather than hinder small business employees, such as quickly organizing an inbox or helping to list products in the correct shopping categories online.

As AI becomes more widespread in companies large and small, knowledge about its use becomes more and more valuable.

Small businesses are known for their ability to adapt quickly, and this also applies to the changes that AI can bring.

Instead of being afraid of AI, small businesses seem to be embracing it; 62% of small business owners say their employees already have the know-how to use AI tools.

Conclusions

The Hiscox 2024 People and Programs Report paints a picture of how small businesses’ attitudes and cultures help them stay relevant, adapt quickly to external pressures and protect the wellbeing of their employees.

All of these characteristics allow them to compete effectively with large corporations while forming a symbiotic relationship.

When employees move between small companies and large corporations, they bring valuable insights with them.

HR, talent acquisition, recruiting managers and small business owners have a unique opportunity to drive this cross-pollination of ideas – adopting best practices from both sides.

In doing so, they can create more balanced, efficient and effective workplaces and position their companies for success in a dynamic talent landscape.