Which convention would be preferred and why (include some pros and cons of one over the other)?
This:
<company>
<employees>
<employee />
<employee />
<employee />
</employees>
<buildings>
<building />
<building />
</building>
</company>
or this:
<company>
<employee />
<employee />
<employee />
<building />
<building />
</company>
There are no semantic reasons to have explicit representation of the collection through a specific element. In the end, both documents have the same meaning – they represent a company with all of its employees and buildings.
However, there are additional benefits the first example offers:
On the flip side, the second example also has some benefits of its own (though I do find these dubious at least):