Small, locally owned businesses are big on employee loyalty

A new study has revealed that employees who work at small, locally owned businesses have the highest level of loyalty to their employers.

Baylor University researchers found that for rural workers, working for a company that was both small and locally owned was the greatest predictor for organizational commitment as it may be a matter of, "I have to be committed, because I don't have many other job opportunities."

Lead author Katie Halbesleben said that it's an interesting time because of the shift toward big business and globalization and while large firms tend to provide higher earnings and more fringe benefits, 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.

The study showed that 57.2 percent of workers in a small firm scored in the highest commitment category, compared to 40.5 percent working for a large firm and ownership of the company also played a major role, with 56 percent of workers in locally owned firms having high commitment scores, compared to 38.7 percent in non-locally owned firms.

The research further found that commitment was strongest when individuals worked for a company that was both small and locally owned, with 61.4 percent of those employed at such a business scoring the highest commitment category as opposed to 46.7 percent for large, local businesses.

Halbesleben added that working for a small and local company is also an important factor that contributes to a worker's commitment.

The study is published in the journal Local Economy.