What Are the Pros and Cons of Working at a Startup Company?
Updated 30 June 2023
Working for a startup may be an interesting choice as there are many perks of this career option. From flexible schedules to the opportunity to learn about how to help establish and grow a company, employment at a startup offers several benefits. It's also important to know the potential disadvantages of this career choice so you can decide if working at a startup suits your preferences and goals. In this article, we explain what a startup is and explore the pros and cons of working for a startup company.
What are the pros and cons of working at a startup company?
If you're considering finding a new job, it's important to know the pros and cons of working at a startup company. A startup is a new company an entrepreneur or team of entrepreneurs starts. The goal of a startup company is to offer a unique service or product to the market that helps solve a particular problem that consumers face in an innovative way.
Startups have many advantages, but they may also introduce some challenges. They're typically shoestring operations, which are operations that have only a small amount of money for funding. For this reason, initial funding often comes from the founders themselves, which can leave the business financially vulnerable in its early days. Many employees enjoy the benefits of helping to build a new company, while others prefer to avoid the risks and find a job at a different company. Learning about the pros and cons can help you make a career choice that's right for you.
Pros of working at a startup
Professionals often enjoy working at a startup for many reasons, particularly if they're changing careers or are new to the workforce. Some benefits of working at a startup may include:
More opportunities to learn
Startup managers often give employees the opportunity to take on unfamiliar tasks than established companies do. While longstanding businesses usually have a set operational method in place, it takes time for startup managers to find optimal approaches for conducting business. They often have smaller teams because of budget constraints, so they may spread duties evenly across employees regardless of their speciality. They may also encourage the team to collaborate on duties, so many job functions may overlap. This may give employees the opportunity to learn about concepts outside their field.
Startups often allow employees to work flexible hours because they've yet to establish normal business operations. Although they may require employees to work nontraditional hours to complete certain projects or assignments, they may also provide time off during the regular workweek between projects. This may be especially true for startups that offer hybrid or remote working options. Although the company may require attendance at certain meetings or prefer employees to be available during specific times, they often allow their teams the freedom to work around their own schedules.
Working for a startup offers employees a distinct experience for many reasons. When you find a job with an established company, you may know what to expect or learn how to acclimate to the company's culture quickly. Startups are still building a company culture, and much of it relies on employee initiatives and the feedback they provide about what works for their teams. Just as startups often take an innovative approach to creating new products or services, they may also provide innovative work environments for employees, such as open workspaces or sleeping areas with nap pods.
Startups often provide their employees with unique benefits packages to encourage candidates to apply and motivate professionals to continue building the company. Although they may offer standard benefits options like supplemental health care and retirement contributions, they often give employees other perks that contribute to a team mentality and help make their team members feel valued for their roles in the company's growth. These benefits may include:
free products or services
free gym memberships
free meals and snacks
remote or hybrid options
Increased job satisfaction
Employees who work at startups may experience more job satisfaction because they're typically more involved in the growth and evolution of the company. Knowing that you can actively contribute to the success of a company may provide you with a sense of fulfilment and can significantly affect your overall satisfaction with their work. Also, because startups often have significantly fewer employees than other companies, the founders and leaders of the startup may put more effort into ensuring employees are happy at work.
Another perk of working at a startup is the often minimal supervision that employees enjoy. Because there are often fewer employees working at the startup, supervisors at startups may focus less on supervising individual employees and instead focus on working together as a team. This means that employees can often make their own decisions within their professional roles, enjoy the opportunity to provide valuable feedback and contribute to the progress of the startup as members of a small team.
Opportunities for innovation
Managers at startups often give employees ample opportunity to use their knowledge and skills in a way that contributes to the development and success of the startup. Whereas more established and corporate organisations tend to have a chain of command through which ideas flow, employees at a startup can take their ideas directly to the top. This is especially beneficial for more creative individuals who regularly think of exciting innovations they want to share with their team.
Cons of working at a startup
Although there are many benefits of working at a startup, some professionals might find certain aspects of this career choice challenging. Here are some of the potential disadvantages of working at a startup:
Uncertain job security
Although many startups eventually become successful businesses, there's a lot of competition for the types of products and services they typically offer. Startups often have a technology focus, and as new technology continues to emerge, so does consumer demand for more advanced products and services. While some startups can meet this demand, others don't have the resources to continue to grow. If the startup where you work ceases operations, you may be suddenly unemployed. You can minimise the negative impact of losing your job by keeping your resume updated so you can apply for new jobs right away if necessary.
A heavy workload
Working for a startup usually comes with more responsibility than in a more established company. For some, this is a benefit. For others, this can cause work-related stress because of the heavy workload and responsibility placed on them. Burnout and stress are more common in startups that give their employees significant responsibility that goes beyond their skill set. You can minimise the stress associated with a heavy workload at a startup by collaborating with your team to see if there are any duties you can share.
Managers at startups often require employees to work long hours with limited time off. This is especially true in the early days of the startup, as these new companies have an obligation to capitalise on trends quickly to experience the fast, early growth that functions as the foundation of the company. While the work schedule is often flexible, management may require employees to work longer hours than a standard, full-time workweek, which may include working in the evenings, or over weekends and holidays. Although many startup employees experience long hours initially, their workload often decreases as the company becomes more established.
One benefit of working at a startup is that they often pay employees an output-based salary instead of an hourly wage, which many professionals prefer. This salary scheme offers them the same salary each pay period, so they can enjoy a predictable wage. While it's helpful to know what to expect, startups typically offer professionals a lower salary than they might make at other companies. With limited resources, management teams often have a limited budget for employment, although salaries often increase as the business grows. Plus, employees often enjoy many perks and benefits as a supplement to their regular pay.
Lack of structure
Longstanding companies often have a structured hierarchy that clarifies each employee's role in the company and who they contact if a problem arises. Many newer companies and startups have begun taking an alternative approach in which they distribute authority more evenly among employees. If you're new to this type of structure, you may find it challenging to know who's in charge of each aspect of the company. Fortunately, many employees find this management approach beneficial in the long term, as it helps them feel appreciated for their contributions.
Related: 10 Types of Leadership Styles
Change is often constant in startups. Although entrepreneurs may begin their companies with a structured plan and ideas about how they want to operate the business, startup managers often try multiple operational approaches before finding one that suits the company. This means the responsibilities and roles of startup employees may change frequently. This can be a disadvantage for professionals who prefer a more stable and predictable work life, although startup operations typically become more structured after reaching stability.
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