No Work Experience? A Big Company Might Be Your Best Bet

No Work Experience? A Big Company Might Be Your Best Bet

Surprisingly, larger, more “prestigious” companies are actually more willing to hire people without experience than smaller companies.

Surprisingly, larger, more “prestigious” companies are actually more willing to hire people without experience than smaller companies.

If you have no experience in a given industry, it’s logical to assume that a smaller, less prestigious company would be more willing to give you a job than a larger, more prestigious company, right?

Well, that assumption would be completely wrong. According to a new study by the National Bureau of Economic Research, larger, more prestigious companies are actually twice more likely to hire candidates without experience in the field than smaller, less prestigious companies.

Why? According to the study’s researchers, UNC Professor Camelia Kuhnen and Stanford Professor Paul Oyer, larger companies are more able to take bigger risks than smaller companies, both because the potential negative budgetary impact effects them less and they get many more applicants, so recruiting is easier.

“When small firms hire somebody, they need to make sure they have a very good chance of succeeding because it’ll cost them a lot to hire someone, fire them, and have to go out and look for a replacement,” Kuhnen told Bloomberg. “Larger, more prestigious firms are more comfortable extending offers to those who don’t have much experience because they don’t face too high a cost to replace workers.”

The Study

The study looked at 1,482 MBA students from the classes of 2007 to 2009 at a top American business school. It concluded that candidates with experience who applied to companies that were low on a Fortune magazine ranking of top MBA employers – generally smaller companies seen as less prestigious – were 3.57 times more likely to get hired than candidates without experience.

Conversely, candidates with experience who applied to companies that were high on a Fortune magazine ranking of top MBA employers – which were almost universally larger companies that were seen as more prestigious – were only 1.74 times more likely to get hired than candidates without experience.

In simple terms: larger, more prestigious companies put less emphasis on experience than smaller, less prestigious companies. So, if you have no experience in a field, statistics show you are more likely to get hired at a known company, compared to a less-known company.

In even simpler terms: if you have no experience, apply big or go home.

Is This A Smart Strategy?

So what strategy makes more sense? Well, there are pluses and minuses to both.

There are two advantages to smaller companies getting people who have experience. First off, their hires are likely more ready to “hit the ground running” and require less training.

Secondly, those companies are also getting someone who has a focused career path. And that means a higher chance of getting someone with authenticity, which is increasingly becoming more important.

Conversely, larger, more prestigious companies are basically adopting the hire-for-attitude, train-for-skill philosophy. Warren Buffett, for example, is a believer in this approach, as he’s looking more for smart, hardworking people with integrity as opposed to a particular skillset, and it obviously has worked out for him.

It makes sense scientifically too. Studies show that being really smart most highly correlates to success at a job, far outpacing job experience.

The negatives are there is more of a ramp-up time for these employees to being productive, which might not be a big deal for a large company. More worrisome is that if the person is new to the field, there’s no guarantee they are going to really enjoy doing it every day.

And that can equate to high turnover and/or poor performance.

So which strategy is better? Tough to say. In many ways, it makes sense for the two company-types to adopt their respective strategies, for the very reasons mentioned above.

Either way, the point to job seekers is this: if you have no experience, think big.

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