Dividend Stocks

Investing In Stocks For The Sake Of Cash Flow


First time visiting? Consider subscribing or the following:

The Difference Between Working at a Public vs. Private Company

Posted on | February 4, 2013 | Comments Off



Generally speaking, there are two types of companies: public companies and private companies. Public companies are those companies in which anyone can purchase shares, allowing anyone who wants to own a small piece of that company. Private companies are those in which only select people can purchase a slice of company ownership.

So, What’s the Difference?
The main difference for working at a public company versus working for a private company is one of financial data transparency. Because private companies don’t have to answer to as many people regarding their financial solvency, they have a great control over how much financial data is shared with both the public at large as well as their employees.

Public companies, on the other hand, must publicly release their financial data to their shareholders as well as the public and certain governmental bodies. This means that it is much easier to find out exactly how the company you are working for is doing in the financial marketplace. Public companies often offer 401k plans that make it easier to diversify your retirement portfolio including investing in gold or low risk mutual funds.
Public companies also tend to have more money at their disposal, since much of the time publicly traded companies are the larger companies. Private companies are most often smaller, sometimes considered “mom and pop” organizations. Because of this, publicly traded companies can seem much more “faceless” and less personal than smaller, privately traded companies.

Which One is Right For You?
The answer to this question is entirely up to your personal tastes and desires, but both would prefer you to have some sort of leadership experience, such as a masters degree in organizational leadership. Often, it may be easier to just come in, do your work and go home with a minimum of fuss at a corporation where you are just another “faceless cog in the machine” for a publicly traded company, save for annual reviews and day to day interaction with lower and middle management. Also, because publicly traded companies often have deeper pockets, salaries are often higher in publicly traded companies.

Unfortunately, publicly traded companies have a large number of people to which they must answer. The very thing that makes them so large, the stocks they offer, can also lead to a morass of bureaucratic red tape anytime any moderately important decision has to be made, as the board must weigh whether the decisions is good for their stockholders, which may or may not include their employees.
Privately traded companies, on the other hand, are often able to make decisions much quicker and with a minimum of fuss as they often have fewer to answer two with their decisions. In addition, private companies can make decisions that better benefit their employees. Add to that the personal interaction you have with management, likely on a daily basis, is something that many people enjoy as it makes them feel like less of a faceless worker drone and more like a vital part of the company and often leads to their achievements being recognized more often.

On the other hand, private companies often don’t have as much money to play with as public companies. This can lead to lower wages or to less advanced office equipment. Also, because of the fact that it is more personal, it can be difficult to slack off and “slip under the radar” as you are most likely being watched closer than in a larger, publicly traded company.

For some careers you can see a similar trajectory at both a public or private company. For instance a management training program, company accountant or member of the IT department would like have similar responsibilities at either a public or private company

While each type of company has different advantages and disadvantages, whether it is “worth” working at one type of company or another depends entirely on what a person wants out of his or her work environment. Remember that, while a paycheck is nice, it is much more important to be comfortable and happy with the job and work environment in which you find yourself.