Why Employees in Small Businesses Are More Engaged

When it comes to employee engagement in small businesses, they’re doing something right.

TalentMap’s 2017 Employee Engagement Benchmarks study reports organizations with fewer than 250 employees have a collective engagement score of 86 percent. In short, that’s a sizable 13 percentage points higher than the overall score (73 percent) for organizations of all sizes. Mid-sized organizations with 250 to 999 employees and large organizations with more than 1,000 employees have engagement scores of 71 and 70 percent respectively.

So what’s the story here? Why do small businesses have stronger engagement rates?

In two words: culture and leadership.

Culture Begins At The Very Beginning And At The Very Top

Small business owners/entrepreneurs are passionate about what they do and work hard at it. They’re totally invested in their organization and want to see their ideas succeed. That passion and hard work passes on to those around them. The enthusiasm is palpable, contagious. It attracts like-minded people into the fold. It cascades throughout the organization, sewing the first seeds of an engaging culture.

It’s common for a deep set entrepreneurial spirit to permeate everything in a small organization, bringing with it nimbleness and agility. Entrepreneurial inventiveness and risk-taking empower and inspire, and both are major hallmarks of engagement. Should mistakes happen, they’re viewed as learning opportunities rather than occasions for reprimand. The opportunity to learn is one of the single most important factors behind employee engagement while caustic micro-management is one of the greatest detractors.

As small organizations evolve and the leader continues to be visible and accessible, this sets another employee engagement precedent over mid and large-size companies. These small organization bosses who are on the ground, sleeves rolled up, interacting, soliciting opinions and listening to ideas project open-door access and a sense of inclusion, engaging employees in the process.

And despite smaller organizations having fewer upward growth opportunities, there are plenty of lateral skill development opportunities and a greater breadth of exposure to strategic, financial and operational insights. In small workplaces, people wear different hats, shoulder different responsibilities, take on new and ever-changing challenges. Individuals and teams work together. Mentoring and coaching come naturally. Interpersonal relations flourish.

The tipping point for employee engagement isn’t really about the number of people in your workforce. It’s about creating the kind of empowering culture typified by small organizations and led by strong entrepreneurial-minded leaders. Those significantly higher employee engagement rates found in small organizations come from creating one great big extended family, dysfunctional at times, but connected by a genuine sense of pride in effort and ownership of outcomes.