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Lead Your Team Strategy

Small Businesses Are Big on Employee Loyalty

Small Businesses Are Big on Employee Loyalty
Credit: StillFX/Shutterstock

Small business owners should feel confident that few employees are more loyal than the ones they already have, new research finds.

Employees who work at small, locally owned businesses have the highest level of commitment to their employers, according to a Baylor University study. With that commitment comes less absenteeism, lower turnover and less seeking of jobs outside the company.

Katie Halbesleben, the study's lead author and a doctoral student in sociology at Baylor, said that when it comes to an employee's job, it's usually not just one thing that affects his or her commitment.

"You may say 'I like my boss' or 'I am satisfied with what I do,'" Halbesleben said in a statement. "Our study re-affirms that working for a small and local company is also an important factor that contributes to a worker's commitment."

The findings are based on analysis of data from the Baylor Religion Survey, a nationally representative sample of 1,714 adults that includes information on workers' attitudes, beliefs and practices. Researchers analyzed data from 763 participants who had full- or part-time jobs, as well as a subset of 146 workers living in a rural area. [The Things Bosses Do That Inspire Employee Committment ]

The study's authors found that nearly 60 percent of workers in small businesses scored in the highest commitment category, compared with just 40 percent of those working for a large organization. The research discovered that ownership of the business also played a major role, with 56 percent of workers in locally owned firms having high commitment scores, compared with 39 percent in non-locally owned firms.

Overall, commitment was strongest when individuals worked for a company that was both small and locally owned.

"It's an interesting time because of the shift toward big business and globalization, but there are still practical values of small and local businesses, including benefits to the community and to the individual, such as less income inequality, less population turnover, lower crime and more committed workers," Halbesleben said.

The research also revealed that for rural workers, size and ownership of their company figure even more into their commitment than job satisfaction does. Working for a company that was both small and locally owned was the greatest predictor for organizational commitment for rural workers.

Halbesleben cautioned, however, that you can't rule out other factors that may play a part for rural workers.

"It may be a matter of, 'I have to be committed, because I don't have many other job opportunities,'" Halbesleben said.

The study, which was recently published in the journal Local Economy, was co-authored by Charles Tolbert, chairman of the sociology department in Baylor's College of Arts & Sciences. Funding for the research was provided by the USDA National Institute for Food and Agriculture and the USDA National Research Initiative.

Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.