Small businesses may become the employers of choice among graduates.

The happiest employees work for small businesses rather than major international firms, it has been revealed.

And while big employers are being forced to make redundancies or stop recruiting in the current economic climate, small businesses may be able to avoid similar problems during the downturn.

In the Federation of Small Businesses (FSB) survey of 2,500 UK employees, the highest job satisfaction rate was among those working for small businesses with 21 percent strongly agreeing and 41 percent tending to agree. Small business employees were also the most committed (64 percent) and loyal (58 percent) to their organisations.

Employees in small firms felt most engaged by their employer and reported the most freedom to choose their working patterns. There were also far fewer reports of bullying in small businesses, lower stress levels and less complaints about long working hours.

The news comes in the wake of emerging stories about major firms cutting back their recruitment. Employment law firm Peninsula has also reported three out of four employers are freezing their recruitment plans because of the effects of the economic downturn.

Smaller businesses may become an increasingly attractive destination for graduates in comparison to bigger businesses in this employment climate. Although they have a smaller workforce and so fewer vacancies, they may be able to be more supportive to individual needs and respond to economic changes quicker to avoid drastic cuts in recruitment or the need for redundancies.

Commenting on the FSB survey, FSB National Chairman John Wright said: “Small business owners know their greatest asset is their staff and they are far more likely to treat them as individuals and recognise their needs. By having a committed and loyal work force that has a say in how the organisation is run, the smallest business has a bigger advantage. “