The Disadvantages of a Mid-Sized Business

by Denise Sullivan

The U.S. Small Business Administration defines mid-sized companies as those with 500 or more employees. These companies face problems that may not be present in a small startup or a large company. They fall into the uncomfortable middle ground of being too big to be flexible and adapt quickly to market conditions, but not big enough to have an advantage in financial or physical resources over larger firms.

Employee Training

A mid-sized company needs workers able to take on complicated projects, but it does not have the same resources as a large corporation to prepare them for those challenges. A larger company can design its own training program, while the mid-sized company must improvise each time it hires a new employee, leading to a lack of standardized training. Employees may also have vague job descriptions because there are fewer workers in each department. Even if you wanted to bring in a trainer for an in-house session, most mid-sized companies cannot justify the cost if only one or two employees perform each type of job.

Advancement Opportunities

There is less room for employees to move up in a mid-sized company. Because there are fewer possible jobs to move into, employees can get stuck in middle management for years waiting for supervisors to retire or leave the company. This can make it harder to retain top talent, as key employees with stalled careers look for advancement opportunities elsewhere. Large companies also may offer transfer opportunities not available in mid-sized companies with fewer locations.

Working Conditions

Mid-sized companies often offer less flexibility than a small company, where the boss and workers are close. This can lead to poor communication between departments if the company is too large to have meetings with the entire staff. Resources may be scarce, leaving no funds for a company-wide system of communication or individual items such as cell phones, laptops or tablets for employees. In many mid-sized companies, the HR department is a single employee who must handle all of the company's claims for harassment, discrimination and other workplace issues. For employees required to travel, a mid-sized company may impose more restrictions on expense reimbursement or the allowable class of transportation.


Large companies benefit from economies of scale that help reduce costs, such as volume discounts from suppliers or lower loan interest rates from the bank. Mid-sized companies may not be able to tap into these same advantages, making it hard to compete in the same market. Financing may also be difficult for a mid-sized company to obtain, which limits its ability to expand.

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