Why are employees who work in small businesses happier?

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HR consultant Cissy Pau looks at why small companies have big benefits for workplace satisfaction

It is generally believed that happy employees are more productive and more engaged. Companies that strive to keep their employees happy and satisfied will have a greater ability to attract and retain talent and, hopefully, will achieve greater organizational success.

There is plenty of research on what makes employees happy at work. Being respected, making a difference, feeling empowered and having a good manager—these are often at the top of the list of factors that lead to happier employees.

Recruitment firm Robert Half, in collaboration with the consulting firm Happiness Works, recently conducted a study of more than 12,000 workers in Canada and the U.S. to gauge how happy they feel at work and what contributed to those feelings. Their research found that the top three drivers of happiness at work are:

1. Pride in their organization;
2. Feeling appreciated for the work they do; and
3. Being treated with fairness and respect.

They also found that the happiest employees are found in:

• Marketing and creative roles;
• Their first year on the job;
• Senior executive roles;
• The 55+ age bracket; and/or
• Companies with fewer than 10 people.

While there are no major surprises here, the one that stands out as possibly unexpected is that the happiest employees work in small businesses. One might think that employees working in larger companies would be happier as budgets are bigger, pay and benefits are often more attractive, and there are usually more opportunities for growth and advancement.

When I dig a little deeper and think about my experience working with small businesses, it becomes easier to see why small may be better when it comes to workplace happiness:  

Noticeable Contributions
In small companies, everyone’s contribution makes an immediate and noticeable difference. There are fewer policies to hide behind, and less bureaucracy and layers to navigate. Most workers in small businesses are hired to perform a particular function and are likely the only one in the company performing that function. Employees succeed or fail based on their own contributions and merits. Employees will know when/if they are making a difference.

Close working relationships
As the theme song of the 1980’s TV sitcom Cheers so aptly put it: “Sometimes you want to go where everybody knows your name, and they’re always glad you came.” Small businesses have the luxury of employees’ being able to build close working relationships. Working with small businesses, we often hear that staff are treated like family, and people really know and care about one another. You’re not just a number or a warm body in a cubicle; instead, everyone knows not just your name but also who you are as a person.

Strong connection to purpose
When businesses are small, it’s often easy to understand the company’s vision and what it wants to achieve. By having a strong understanding a company’s purpose and being able to hear and see that you are working to fulfill that purpose makes for a much more rewarding job. Unlike working in a large organization where there are many layers between the CEO and the staff, and where messages often get lost in translation, in a small business, you are rarely more than a step or two away from the visionary. This makes it easier to rally employees and get everyone on-board, and as an employee, it’s gratifying to know that the whole team is trying to pull in the same direction.

If employees are dissatisfied at work or there is a gap between actual and desired happiness levels, the cause of the dissatisfaction may rest in one of the areas above. The simplest solution would be to ask employees what the company can do to improve satisfaction at work. That being said, all companies, large or small, can do a better job of recognizing employee contributions, improving working relationships and communicating a clear purpose along with the employees’ part in achieving that purpose. These are surefire ways to increase employee happiness at work.

Cissy Pau is the principal consultant at Clear HR Consulting Inc., a Vancouver-based firm that offers HR consulting and downloadable HR solutions for small businesses.