Grads May Find More Jobs at Entrepreneurial Firms

A trend of overall job growth could mean openings for young workers.

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Hoping for a job with a booming company that rewards your skills, keeps your workload varied, and encourages personal growth? You just might be in luck, if you know where to look. 

Job growth at large, U.S.-based entrepreneurial firms has increased every year since 2005, according to a new report on publicly traded companies conducted by Babson College Associate Professor Joel Shulman and his mutual fund, EntrepreneurShares. 

Those entrepreneurial companies, defined by Shulman as having 15 characteristics such as potential for organic growth, transparent governance, and manageable debt, also boast much higher job growth increases when compared to similarly sized, non-entrepreneurial organizations. For students at both the college and graduate levels, the trends may also signal job growth for newcomers to the workforce. 

From 2009 to 2010, average job growth at 266 large entrepreneurial companies increased 10.2 percent, almost double the 5.7 percent increase at all other publicly traded U.S. companies of comparable size. (Shulman only considered companies with a valuation of more than $200 million, such as Parexel, a biotechnology corporation; iRobot, manufacturer of the Roomba vacuum robot; and computer giant Apple.) Even through the recession, job growth at the entrepreneurial companies increased slightly—0.25 percent—and Shulman expects the companies will continue to grow through 2011. 

[Read about the good news in the March job report.] 

"By definition, entrepreneurial firms grow faster," says Jeff Sandefer, cofounder of the Acton School of Business based in Austin. "They tend to have people who are more on-mission, [and] incentives are tied to what needs to get done. Companies in that growth phase of building something that matters are always going to outgrow a bureaucratic, slow company." 

Though the published research did not examine growth at specific job levels, Shulman says the trend also likely demonstrates a growing need for young workers in entrepreneurial companies. 

"Organic growth is going to come at all levels," he says. "The message to people is: If you want a good career, find an entrepreneurial company. Look for senior managers who have skin in the game; look for companies that compensate in a balanced manner [and] keep their teams together. These are companies that are going to grow, and you'll probably grow with them." 

[See how the job outlook is brightening for college grads.] 

Such personal growth is pervasive in the culture at Riverbed Technology, one entrepreneurial firm included in Shulman's research. The 9-year-old IT performance company in Silicon Valley celebrates creativity and disparages timecards, according to cofounder Jerry Kennelly, who now serves as chairman and chief executive officer. The company has hired more recent college graduates in the past four years than in the previous four—particularly young, passionate risk-takers in both its engineering and marketing and sales departments, Kennelly says. 

"We're not looking for people who want to come into pre-defined, straight-jacketed positions; sit in a cube with their head down quietly; work 8 to 5; take no risks; and have no independent, original thoughts," Kennelly says. "That's the last person we want in this company." 

The company, which grew from two founders in 2002 to 1,244 employees as of December 2010, has seen job growth across all levels of expertise. To attract young workers, senior-level employees go to on-campus job fairs to keep their candidates from being "seduced by the old, big name companies with a nicely dressed H.R. person [and] a glossy brochure who talks about three weeks' vacation," Kennelly says. 

"College students have trouble sorting through the criteria of why you should take a job," he continues. "A college student will take a miserable, dead-end job with a name company that pays him $500 a year more than [he] would get at a really exciting job with a smaller company where [he] would have twice as much earning power over time and a much better career opportunity because [he] just [doesn't] know...what's really important."