Seeking a new career opportunity is no small decision. We’re talking about your livelihood, after all. So, as you explore your options, there are many important decisions you’ll need to make.
Do you want to work remotely or in an office? What industry do you want to work in? And, do you want to work for a public or private company?
Anderson Trucking Service (ATS) is a privately-owned company — as we have been since we were founded in 1955 by Harold Anderson. Still in the Anderson family, we fall into the “family-owned” category of private businesses.
This article will explain what classifies a company as private and the pros and cons of working for one. This will help you determine whether you want to work for a private company or if you should explore opportunities with public companies.
What is a Private Company?
A private company is typically an organization owned by its founders or a group of investors — or even a combination of both. The public can’t invest in the company because none of its shares are available through a stock exchange.
What are the Benefits of Working for a Private Company?
On its surface, it might not seem like it makes a difference whether you work for a private or a public company, but there are several advantages of choosing to work for a private employer:
- Private companies don’t have to answer to shareholders
- Private companies don’t have to publicly report their earnings
- Private companies can adjust quicker
Private Companies Don’t Have to Answer to Shareholders
A major part of being a public company is making shares of your business available for the public to purchase. This allows you to (hopefully) grow as people invest their capital in your company.
The people who invest in public companies also have a say in how these businesses spend their money, often through a board that meets regularly to discuss business decisions.
Since private companies don’t offer shares of their business to the general public, they don’t need to do any of that. This means private owners can make their own business decisions.
If they want to offer employees a $1,000 bonus at the end of the year, they can. If they want to add on to their corporate office building, they can.
This allows the people in charge to make business decisions that directly relate to better employee and/or customer experiences, rather than what shareholders are telling them to do in order to increase profits.
Private Companies Don’t Have to Publicly Report Their Earnings
Because there aren’t any shareholders and they aren’t subject to U.S. Securities and Exchange Commission (SEC) regulations, there’s no need to publicly share how they’re doing financially.
Public companies need to report how they’re doing financially so people can make sound decisions with their money — should they invest in your company or not?
Once again, private companies don’t have to do that. While public companies need consistent revenue and continued growth to satisfy their shareholders and continue to get further investment, private companies can get away with an “off quarter.”
Now, sustained quarters of poor revenue aren’t going to end well for anyone involved in that particular business, but a poor quarter every now and then isn’t the end of the world. That means private businesses can make innovative decisions that carry some risk.
If those decisions work, it can mean a boom in revenue that allows for further investment in the future. If they don’t work, the company can simply learn from it and move on. They don’t have to worry about the public backlash — and likely stock sell-off — that comes with a poor quarter for public companies.
Not needing to report earnings isn’t always a good thing though. If your company doesn’t share revenue numbers, even internally, it could be a sign they’re not in a good place financially. They could also say things are going great when in reality they’re losing money quarter after quarter.
Private Companies Can Adjust Quicker
The economy and job market are always going through ebbs and flows — some bigger than others (see 2008 and 2022). When there are hiring booms, private companies can add headcount as quickly as the leadership team sees fit since there are fewer barriers to growth. Public companies need to get approval from shareholders to invest in more headcount.
On the other hand, as hiring tends to slow, private companies can turn back the dial on hiring — or continue to hire if they deem it important for the company’s future — rather than getting rid of employees.
We’re seeing massive layoffs with public companies — particularly in the tech industry — right now because shareholders don’t want to see revenue drop too far. Getting rid of employees is the easiest — and fastest — way to prevent poor earnings calls.
Private companies can also create new positions easier if it’s warranted. Maybe you’re continuing to show your value as an employee, but your boss and their boss are content where they’re at. How can you grow if their positions aren’t available? Maybe your team is seeing growth and that allows an “in-between” position to be created just for you. Or maybe they get promotions and it trickles down to benefit you.
What Are the Disadvantages of Working for a Private Company?
Before you decide to start submitting an application to your nearby private companies, it’s important to understand the downsides that can come with working there too:
- Private companies can have limited financial resources
- Private companies may have limited growth opportunities
- Private companies don’t have as many investment options
Private Companies Can Have Limited Financial Resources
To be clear, this is certainly not a blanket statement. There are many private employers — including the largest private employer in the U.S., Cargill, who took home $165 billion in revenue in 2021 — that have plenty of financial resources.
That said, typically, private companies tend to be smaller than public ones. In those cases, they simply don’t have the same financial resources. That carpet installed in 1993 might be due for an upgrade, but it’s not in the budget.
You might also be working harder than your friend who does the same job at your region’s well-known public company because they have four more colleagues than you do. Your company might not be able to add the person it takes to lift the weight off your shoulders.
Private Companies May Have Limited Growth Opportunities
If you work for a smaller company, that means they don’t have as many employees, obviously. So, when you’re ready to progress in your career, the opportunity to do so might not be there.
You might have to find the next step in your career with a different employer — even if you like the one you work for. Either that or you stick it out in your “dead-end” job.
Private Companies Don’t Have as Many Investment Options
If you work for a public company, chances are you were offered an option to buy stock at a discounted rate. At a private company, there is no stock to buy into — at least not publicly-available stock.
Technically, employee-owned companies utilize an employee stock ownership plan (ESOP), which allows individuals to buy shares of the company they work for, however, that’s a bit different than being able to buy public shares at a discounted rate.
At most privately-owned companies, you’ll have the option to utilize a 401k retirement plan and that might be it. You might have to rely on outside investment opportunities to diversify your retirement plans, which won’t offer any discounts.
Working for a Private Company: Pros and Cons
Working for a private company is a great option for people who enjoy the benefits of working for a company that doesn’t have to answer to shareholders, doesn’t have to publicly report their earnings and can adjust quickly.
Others might not enjoy the fact that their privately-held company may have limited financial resources, limited growth opportunities and doesn’t offer as many investment options.
But pros aren’t always pros for everyone and cons aren’t always cons. It’s up to you to decide what’s important to you and make a well-educated career decision.
Is a Private Company Right for You?
Do you like the sound of working for a privately-owned company? As we mentioned at the beginning of the article, that’s what we are. Here at ATS, you’ll find dozens of great career opportunities across a variety of departments — and work for an industry that impacts the lives of everyone.
Learn more about life at ATS by visiting our corporate careers page or see what positions are currently available. If you have questions you want to discuss with one of our talent acquisition specialists, we’d love to chat!
Find Out if Working for a Public Company is What You’d Prefer
If you’d like to learn more about what working for a public company is like, we’ve got you covered! We have another article — just like this one — about the pros and cons of working for a public company.