HR · 31 August 2018

Why don’t Gen Z and millennials want to work for small businesses?

Research shows that smaller businesses aren’t attracting younger workers

New research from Santander UK has found that young people leaving education and looking for work may be missing out on potential employment opportunities by failing to consider working for SMEs.

Only a third of generation Z and millennials leaving school, college or university said they want to work for an SME. An even smaller proportion, just one in six (18%), wanted to work for a startup or micro business.

Meanwhile, the most popular career options for generation Z and millennials are to work for a large firm (51%), the public sector (51%) or a global multinational (49%).

Aspirations for those leaving full time education

Aspiration for after education Percentage who aspire to this after leaving full time education
Work for a large firm 51%
Work in the public sector 51%
Work for a global multinational company 49%
Don’t know 48%
Continue my education 45%
Set up my own business 40%
Be self employed 36%
Work for a small to medium sized business (SME) 35%
Work for a charity 29%
Work for the family business 23%
Work in the gig economy 22%
Work for a startup/micro business 18%
Other 25%

By ignoring smaller businesses, young people may miss out on a vast number of opportunities, as over 99% of businesses are SMEs.

Commenting on this, Sue Douthwaite, managing director of Santander Business said: “SMEs are the backbone of the UK economy, making up the overwhelming majority of private sector businesses.

“While there are fantastic opportunities working for large companies or the public sector, anyone about to leave education should not discount the huge range of exciting career opportunities offered by the nation’s SMEs.

“SMEs offer huge opportunities for growth and many are at the forefront of British innovation and exports.”

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The primary factor why generation Z and millennials say they wouldn’t wish to work for an SME is due to a perceived lack of job security (56%).

Salary is also highly considered as many believe that SMEs off a lower salary than larger companies (46%) and fewer opportunities for progression than large companies (33%).

In regards to graduate recruitment it is still highly sought after by SMEs, with nearly a third (30%) of businesses having hired a graduate in the last 12 months and a similar number (32%) planning to do so in the next year.

Matt Hutnell, ‎Director of Santander Universities UK, commented: “SMEs may not be as visible in education institutions as larger businesses or the public sector as they may not have the same level of resources or just historically haven’t worked as closely with schools and universities.

“An internship is a fantastic way to get to know a business so anyone who isn’t sure what they would like to do, or who is and would just like some experience, should consider speaking to the careers department at their school, college and university and finding out what opportunities there are.”

Reasons millennials and gen Z do not want to work for SMEs

Lack of job security 56%
Poor salary 46%
Lack of career path / progression 33%
Lack of funding 30%
Lack of training opportunities 28%
Not aware of the opportunities for working for a small company 19%
Lack of a clear business plan 18%
It would not look as good on my CV as a bigger organisation or well-known brand 17%
Lack of ability to work abroad 17%
Friends or family have had bad experiences 7%

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ABOUT THE EXPERT

Carly Hacon is a reporter for Business Advice. She has a BA in journalism from Kingston University, and has previously worked as a features editor for a local newspaper.

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