posted by kizer permanente
That's true. Though, in my limited amount of job searching, I personally haven't seen people leave larger companies for smaller companies and take a pay increase. Well... not without taking a net hit after benefits are counted.
I can't speak for other people, but I know it happens a lot in the engineering market, as many smaller firms are more consulting firms and they charge out their engineering time at rather high rates to their customers kind of like lawyers.
I went from a company once that was easily 5000 employees to one that was 40 employees and got a 20% pay increase and the 401k/health care was basically the same.
That new employer knew they could bill my time out out at about $250/hour on most projects and at least $150/hr on others and I didn't make anywhere near that so it was a win/win.
Many small engineering firms are consulting/service firms like this and they can and do pay better than large companies if you negotiate.
The company I am at now, is a large company with about 11,000 employees in the US and easily 30,000 worldwide.
They were somewhat surprised by how much I was asking for to switch (I was coming from the consulting firm) and had to basically change the position they were looking for to a "senior" position to be allowed internally to hire me at the salary I was requesting. In other words they had to give me a promotion before I was even hired. Basically they were looking for a "Combustion Application Engineer" and changed the title to "Senior Combustion Application Engineer" to hire me. All because I was doing quite well at the consulting firm.
I can not speak for other industries as I honestly do not know if going to a smaller company pays better typically or not, but I do know in engineering it can if that smaller firm is in consulting/service work.